Since the 1800s, the automotive industry has undergone many waves of transformation - gasoline replaced steam-powered engines, mass production accelerated manufacturing, and digital transformation is making waves. In the digital transformation era, data is one of the most powerful assets. Data analytics is changing how automakers, dealers, and related businesses operate, from vehicle design and manufacturing to sales and customer service.
This guide examines the role of data analytics in the automotive industry - how it is used, its benefits, and trends.
How is Data Analytics Used in the Automotive Industry?
Data analytics is the foundation for transformation in the automotive industry. It leverages artificial intelligence (AI), machine learning (ML), and other advanced technologies to enhance vehicle performance, quality, safety, efficiency, and more. It encapsulates an immense amount of data ranging from customer behavior and preferences, driving patterns and locations, to equipment performance and beyond. As a whole, data analytics drives innovation. It allows designers and engineers to find ways to make better quality vehicles at lower costs, improve vehicle safety, and make advanced technology more cost-effective. Here are some of the many ways data analytics is transforming all aspects of the automotive business:
Vehicle Design and Testing
AI-driven computer modeling helps identify problems and play out scenarios for every aspect of a vehicle's design and performance. Designers and engineers can detect issues early in development and make proactive corrections. They can also test the vehicle under realistic scenarios before it is built, which saves resources, builds in additional layers of protection, and speeds up the design and testing process. With more safety checks along the way, the end product is safer.
Partially and Fully Autonomous Vehicles
Data analytics opens up opportunities to create more connected, autonomous vehicles. Partially autonomous technology is already at work in features such as lane assist, self-parking, Subaru's EyeSight and LiDAR, and Tesla's Autopilot. Car makers continually research and develop solutions to expand autonomous capabilities that improve safety and enhance the driving experience.
Low Emission and Electric Vehicles
A widespread push for sustainability is underway, and data analytics is in the driver's seat. Thanks to big data and predictive analytics, engineers can develop next-generation electric and low-emission vehicles faster than they would be able to otherwise. For instance, ML models can predict how batteries respond under different conditions and with traditional testing methods.
Benefits of Data Analytics in the Automotive Industry
The adoption of data analytics offers many benefits to the automotive industry, including the following:
- Improves Sustainability - With data analytics, car makers can optimize fuel efficiency, supply chain management, and more. With progress towards sustainability, car manufacturers can gain a competitive advantage, deliver more value to customers, and improve their bottom line.
- Helps Manage the Supply Chain - Data from many sources provides valuable insights into many facets of supply and demand. Real-time insights can help businesses stay on top of market influences, monitor trends, and outpace the competition. Predictive modeling can help businesses understand the supply chain solutions that have worked in the past and apply them to the situations in the present.
- Enhance Quality Management - Data analytics help suppliers identify defective parts in the early manufacturing stages, which is invaluable when developing and testing prototypes. These capabilities can enhance quality management throughout the lifecycle of any automotive product.
- Increases Productivity - Data analytics is instrumental in increasing productivity, particularly when manufacturing parts and vehicles. Data insights and models increase visibility into the manufacturing floor, detecting issues before they escalate and identifying opportunities for optimization.
- Improves Quality of Vehicles - Data analytics helps manufacturers make cars that consumers actually want and need. Data can be used to identify in-demand features and assess the viability of various price points in the market.
- Improves Marketing - With the help of data analytics, car companies can improve their understanding of customers and create more relevant and timely marketing strategies. Data analytics is crucial for personalizing marketing content to be meaningful for consumers. It is also essential for creating highly targeted marketing campaigns that increase brand awareness and lead to more sales.
- Better Dealership Placement - Data analytics can be used to determine the best possible location for auto dealerships to improve visibility and maximize sales.
Trends in Data Analytics and Automotives
When it comes to data analytics and automotives, there are countless developments underway. The most widely discussed are typically innovations in autonomous, low-emission, and electric vehicles, which were touched on here already. Now, let's turn our attention to two trends that have not yet been discussed:
- Technology Upgrades - To unleash the full potential of data analytics, car manufacturers and dealers need to upgrade their technology and enable IT systems to collect and analyze data. Those who have not already, need to undergo digital transformation so that their systems, employees, and customers are equipped to integrate ML and AI into operations and outcomes.
- More Jobs - While many may fear AI taking their jobs, digital transformation actually opens up many new job opportunities. Employees need to upskill, and businesses need to hire people with industry knowledge who are also experts in data analytics, predictive analytics, AI, and ML.
Learn More
As the automotive landscape evolves rapidly towards connected, electric, and autonomous vehicles, Encora's meticulously tailored digital engineering services are reshaping the next generation of automobiles. From crafting captivating infotainment systems that seamlessly integrate entertainment and functionality to spearheading Advanced Driver Assistance Systems (ADAS) that redefine safety and convenience, our solutions set new benchmarks for automotive excellence.
Fast-growing tech companies partner with Encora to outsource product development and drive growth. We are deeply expert in the various disciplines, tools, and technologies that power the emerging economy, and this is one of the primary reasons that clients choose Encora over the many strategic alternatives that they have.
Contact us to learn more about automotive industry solutions.
