How Changing Consumer Habits and Digital Innovations are Shaping the Automotive Industry

August 2, 2018 Frank Khoshnoud

 

Frank Khoshnoud is Vice President & General Manager, Automotive, Aerospace & Defense.

At first, everything will seem like it always was: You’ll have your usual coffee and your same breakfast, and then you’ll leave for work. But instead of pulling your vehicle out of the driveway, you’ll be greeted at the curb by a self-driving car that takes you where you need to go. You’ll have reserved and paid for your ride via your smartphone — and the payment method may be via blockchain. This isn’t science fiction, and the way you’ll move will change everything about how we live in our cities, travel on our roadways, and live our lives.

Since OnStar came out in 1996, automotive manufacturers have been developing connected vehicles. The technology is getting better. Connected cars will soon allow managers to administer fleets, conduct payments and gain better insight into their vehicle usage. And when we develop the safe and feasible autonomous vehicle, our cities will transform even more.

Right now, cars — no matter how sophisticated they are — remain parked 95% of the time. An autonomous vehicle, however, could be in use continuously, rarely needing a place to park. A city without parked cars is a city transformed. Individuals aren’t likely to own that car roving the town on its own as it ferries passengers about — instead, it will be a part of a fleet managed by manufacturers and service providers. Payments will be via smartphone and the private car will then go the way of the Conestoga wagon.

 

There are few universals for mobility

This vision for the future is no pipe dream. Automotive manufacturers are innovating, avoiding disruption from tech companies. And planners are building the foundations for the cities to come — with the car not necessarily at the center, but as part of the whole mobility fabric that is “end-to-end multi-modal.” With the right technology and the proper infrastructure, we could all become mobility-agnostic, wherein we choose among a variety of options, such as the bus, train or the car and even flying taxis — depending upon convenience, speed and our immediate needs.

From Bogota to New York City, leaders are already using better technology, improved public transportation and innovative infrastructure to improve their cities. However, change happens when the public demands it — and when technology can meet those goals. Conduent, therefore, conducted an online survey among 18 to 65-year-olds who hold a driver’s license in 23 cities across 15 countries. The goal was to gather information on driver habits and expectations of travel — and we focused on their customer experience.

We discovered that there are few universals for mobility. In some cities, like Singapore, they already don’t drive as much — only 52% of respondents said they drive a car in and around their town at least once a month. In the U.S.; however, 84% still drive around their cities at least once a month.

The personal car is still king — at least in the U.S. Americans are driving, because for them it’s still the best choice. The traffic delays and the snarls are getting these drivers upset, though — seven out of 10 said they experience delays at least one day per month and 10% said they experience delays six to seven days a week.

This study found that we’re choosing our mode of travel because we’re going by comfort and habit — not by loyalty to the car itself. Seventy percent of the respondents to this survey said they’d take public transportation if it were faster. Other, lesser deciding factors included better service and price.

 

The future of automotive is more than just self-driving cars

For the immediate future, most of us will remain at our car’s steering wheel — not having the car drive itself. But as time moves on, this fundamental shift in how we move (and how we interact with automobiles) will continue.

From the consumer standpoint, the mobile phone will still take center stage — not only for navigation from point A to point B — but also as part of every rideshare option that comes to market. Everyone’s heard about Uber, but other rideshare innovations and payment options abound.

Some startups, such as Kango, specialize in taking children on pre-scheduled trips to ballet class. Companies such as Maven allow drivers to rent cars only when they need them. Further, there are now apps that help people find parking spaces in busy cities or apps that allow people to pay for parking. So far, according to our study, only 4% of respondents are using such apps but we expect to see continued momentum in this consumer-driven arena.

When it comes to making an auto purchase, car buyers today have access to so much information online they can select a car before ever setting foot into a dealership! Conduent studied the buying habits of present-day auto buyers — especially millennials — as they consult digital resources during research, testing, deal structuring, pricing, financing and even servicing of their vehicles. This infographic has more information on how and why they buy.

In addition to innovations in the consumer segment, manufacturers are making huge advances in the way they interact with consumers and manage backend processes and transactions.  

From a consumer standpoint, auto dealers are catering more to their digital shopping preferences — delivering online tools that, in effect, keep people out of the dealerships until they’re ready to buy. Though these types of tools give auto manufacturers less leverage over consumers and price negotiation, they help dealers gain competitive advantage through greater customer satisfaction. It’s about taking a process that many view as confrontational and intimidating — and putting more control in the hands of their customers.

From a backoffice standpoint, automotive companies are innovating through data-driven fleet management and blockchain-based payment processing, to name a few. It’s easy to find examples all around in which the automotive industry is transforming in lockstep with its customers (and that’s good for business).

As the digital future of the automotive industry unfolds, there’s one thing we all can count on: data will reign supreme. From buyer habits to real-time purchase data on vehicles to IoT-based vehicle maintenance and omni-channel customer experience. Everyone will continue to rely on vast amounts of real-time data to make the decisions that matter to them:

  • Allowing for individualization of every interaction throughout the lifecycle
  • Delivering immediate responses to customers’ needs
  • Embedding more intelligence into every interaction

The transformation from car ownership to mobility services is much more than a pipe dream—it’s happening right now, in front of us. So hold onto your steering wheel! We’re in for a wild ride, with technology and innovation at every signpost along the way.

 

For more insights, check out Conduent’s solutions for the automotive industry.

No Previous Articles

Next Flipbook
Training Program: Hertz
Training Program: Hertz