How Data is Powering New Business Models in the Auto Sector

Leading technology companies, ride-hailing companies, and startups are investing in autonomous vehicles prompting established automobile manufacturers to also do so

By Mahesh Shetkar


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Satya Nadella is right in saying data is the oxygen for new products and services. Human beings have mastered agriculture and manufacturing. Consider that a single farmer today produces enough food for hundreds if not more people and manufacturing are so robust and potent that unimaginably sophisticated devices including smartphone are available at affordable prices. Advances in manufacturing have been so rapid that even the highest quality products sold by leading brands can be copied perfectly. To add value and grow in a competitive market, companies must find ways to use data because it can grant insights into consumers' preferences. By understanding consumer preferences products and services that are likely to be successful can be designed.

Self Driving Cards are Arriving

The auto sector is one of the biggest and most innovative in the world. To remain successful in the future, auto companies are imagining how people will live and travel in the future. One of the most visible trends is that in the future self-driving cars will be very popular. Leading technology companies, ride-hailing companies, and startups are investing in autonomous vehicles prompting established automobile manufacturers to also do so.

Data will be the key to the success of autonomous vehicles. Only by using massive amounts of data can successful autonomous vehicles can be designed. An autonomous vehicle will be controlled by AI that will continuously send and receive information over a 5G network. Only by allowing fast data transfer will autonomous vehicles become successful. The AI controlling an autonomous vehicle will be programmed by human beings to respond to circumstances. Hence data will decide how autonomous vehicles make crucial decisions. For instance, human programmers will have to decide that if a child comes into the path of an autonomous vehicle, should the vehicle swerve and potentially harm or kill other human beings or continue on its way injuring or killing the child. Such decisions will be made rapidly using data. Different auto manufacturers will have to decide how they want their autonomous vehicle to react in challenging circumstances. When such decisions are sanguine they may be advertised and attract buyers of autonomous vehicles.

Auto Ownership in Shared Economy

Companies in the automobile sector realise that advances in technology and changing human preferences make self-driving cars an eventuality. However, companies are using data to decipher what kind of business model will emerge when self-driving cars grow in numbers. Today a car advertised as having a powerful engine that makes it possible to go from 0 to 100 kilometre per hours in seconds will attract buyers. Many buy a car based on its performance. Yet will buyers be willing to pay a premium for a car with a powerful engine if they will not be driving it? Such questions can be answered using data because data will reveal how often autonomous cars are self-driven and how often they are driven by AI. Using such data, auto companies will decide what kind of autonomous car people are willing to own or whether the introduction of autonomous vehicles will mean very few are willing to own cars.

Using Data to Ease Servicing

A new model relevant to India has emerged already. Serving the auto sector are companies that make it easy for car owners to have their car serviced. Through an app, users can have their vehicle picked up from home and driven to a service station for servicing. This service offers convenience, usually saving car owners an entire day that otherwise would be spent at a service centre, and they are also affordable as vehicles are serviced at a significantly lower cost than during a traditional servicing. The quality of service provided is exceptional as well.

Data will shape car ownership in a few decades. The autonomous vehicle trend begun by technology companies in North America has caught on globally and incumbent auto manufacturers in Europe and Asia have joined the bandwagon. Using data automobile companies understand how they can succeed in the decades ahead and, using data, clever startups in India are already eliminating hassles of car ownership.

Mahesh Shetkar

Business Develoment head, Doers

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