Lesson 6 Digital transformation in the automotive industry

Digital transformation

Digital transformation is a means for automotive OEMs and tier suppliers to modernize their processes to increase operational efficiencies, create sustainable products, and provide new experiences that consumers expect. Digital Transformation is a leading force in today’s competitive market and a key factor to innovation.

With increased use of modeling and simulation, data science, analytics and other technologies in product design, companies are now linking these technologies with product lifecycle management (PLM) and virtualization to create partial or full digital twins of products. In turn, this can lead to further digitalization of the manufacturing chain.

A digital thread creates a closed loop between digital and physical worlds to optimize products, people, processes, and places. With the technologies available today, a holistic digital thread spans the entire product lifecycle that takes place within a company and extends outward to suppliers, customers, and products and people in the field.

Benefits of digital thread

ENGINEERING EXCELLENCE: Improve quality, reduce rework, and expedite new product development and time-to-market.

MANUFACTURING EFFICIENCY Drive process effectiveness with greater insight into assets, throughput, and worker productivity.

PRODUCT & SERVICE INNOVATION Enable (and uncover) new business models and opportunities that impact top-line revenue.

SERVICE OPTIMIZATION Improve technician effectiveness and reduce asset downtime.

SALES & MARKETING EXPERIENCE Enrich the customer experience with new ways to engage and drive customer loyalty.

As digital technologies evolve all around us, manufacturers are increasingly coming to crossroads: to transform and develop or stick with the tried, tested, and true methods [[i]]. Digital transformation offers many benefits in the long term, including:

  • Streamline the supply management in automotive manufacturing and facilitate a connected supply chain
  • Innovate vehicle performance and design
  • Expand into new markets with auto parts or supply sales
  • Offer omnichannel experiences in sales and customer care
  • Provide post-sales support and monitor customer satisfaction.

Internet of Things in automotive industry

The Internet of Things (IoT) is a term used to describe a network of gadgets communicating online. This enables sophisticated automotive technology, such as electronics, actuators, and sensors, to communicate with one another and with other online-connected vehicles.

IoT applications in the automobile industry are virtually endless, thanks to Industry 4.0 and artificial intelligence. Automotive industry leaders can use IoT solutions to improve vehicle efficiency and reduce the environmental impact of their products. Incorporating IoT monitoring systems increases vehicle efficiencies and enhances precision around maintenance, driver behavior, and navigation [[i]].

With many uses to emerge as technology develops, modern WiFi capabilities, engine performance data, and temperature control systems are only the tip of what IoT solutions can provide for automobiles.

The automotive industry is developing cutting-edge solutions using IoT technologies, including connected car solutions, ADAS, in-car infotainment systems, navigation & telematics solutions, predictive maintenance solutions, and Vehicle-to-Vehicle (V2V) applications, Vehicle to Infrastructure (V2I) applications, and Vehicle to Everything (V2X) communication applications.

Ways IoT technology is aiding sustainability in the automotive sector

Monitoring Vehicle Location and Driver Behavior [[i]]

Using IoT sensors to track vehicle location and monitor driver behavior can yield insights over time along with instant alerts that let managers address problems and optimize routes, helping to minimize gas consumption and time stuck in traffic. Keeping an eye on the details is key to maximizing sustainability efforts in fleet management. Events such as high-speed turns and unexpected braking can be programmed to trigger alerts in most IoT driver behavior management systems, letting managers and drivers know when there’s a problem. The data also sheds light on gas mileage and energy consumption, helping managers understand their fleet’s footprint and informing sustainability efforts.

Enabling Predictive Maintenance

Installed in vehicles, IoT sensors can monitor the status of various parts and systems, providing data that allows fleet managers or manufacturers to anticipate mechanical problems and take a proactive approach to maintenance. The fleet operations arm of a global sales and service organization, Scania Trucks uses IoT sensors to track a range of vehicle data, allowing for remote diagnostics when a problem is detected or predicted. Fleet owners or drivers access diagnostic information through a mobile app or a web portal, where they receive alerts and review data to plan a service. Having access to this information helps minimize downtime and keep vehicles running smoothly and efficiently, reducing fuel consumption by up to 10 percent and lowering cost and emissions as a result.

Innovating Practical Electric Alternatives

Concerns over climate change are motivating vehicle manufacturers to replace gas-powered vehicles with electric ones. The growing number of electric vehicles on the market creates the need for adequate numbers of vehicle charging stations, located both in urban and rural areas. Providing IoT connectivity for these stations is essential for oversight and maintenance, but broadband connectivity is often limited in rural areas—and isn’t necessary to transmit the small amount of data these devices generate.

Germany-based IONITY is building out a network of 7,000 EV charging stations across 24 European countries, with the goal of having a station every 150-200 kilometers. Using cellular IoT connectivity, IONITY stations provide GPS location information and other details to customers via their smartphone app. IoT connectivity also allows users to process secure payments and track their vehicle’s progress as its battery charges. With reliable charging stations available, more individuals and fleet managers are likely to choose electric over gas-powered vehicles, helping to reduce CO2 emissions.

Painting a Clear Picture

IoT connectivity is an incredibly valuable tool for implementing environmental sustainability in the automotive sector, empowering efforts at every level. Connected sensors provide a spectrum of data that, combined with the power of AI and predictive analytics, provides drivers with a precise, accurate picture of a vehicle’s performance. That knowledge can maximize efficiencies and reduce emissions in fleets of traditional vehicles—and sway consumers away from gasoline-powered engines by revealing exactly what type of performance they can expect from electric alternatives.

The IoT has become a fundamental technology for next-generation vehicles.

With IoT and WiFi capabilities supported by 3G/4G/5G functionality, the automotive industry is entering a new phase and creating space for more extensive adoption.


[i] IoT.Business.News,  How IoT Can Improve Sustainability in the Automotive Sector, September 30, 2022 https://iotbusinessnews.com/2022/09/30/56503-how-iot-can-improve-sustainability-in-the-automotive-sector/

[i] How the automotive industry using internet of things (iot) technology? https://dxminds.com/how-the-automotive-industry-using-internet-of-things-technology/

[i] https://oroinc.com/b2b-ecommerce/blog/digital-transformation-in-automotive-industry/

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