{"id":2567,"date":"2019-11-14T14:59:19","date_gmt":"2019-11-14T19:59:19","guid":{"rendered":"https:\/\/blogs.sw.siemens.com\/thought-leadership\/?p=2567"},"modified":"2026-03-26T12:04:15","modified_gmt":"2026-03-26T16:04:15","slug":"redefine-the-line-how-automotive-trends-are-changing-the-ways-we-move-from-point-a-to-b","status":"publish","type":"post","link":"https:\/\/blogs.sw.siemens.com\/thought-leadership\/redefine-the-line-how-automotive-trends-are-changing-the-ways-we-move-from-point-a-to-b\/","title":{"rendered":"Redefine the Line: How automotive trends are changing the ways we move from point A to B"},"content":{"rendered":"\n

The automotive industry has been one of the most dynamic and\nexciting incubators of technological and product innovation in the modern\nworld. A unique mix of investment, consumer interest, and industry competition\nhas driven this dynamism with a constant search for the next feature, style, or\ncapability to capture the public imagination. At the 1964 New York World\u2019s Fair,\nGeneral Motors (GM) hoped to capture such interest with the Firebird IV concept\ncar. GM explained, then, that the Firebird IV \u201canticipates the day when the\nfamily will drive to the super-highway, turn over the car’s controls to an\nautomatic, programmed guidance system and travel in comfort and absolute safety\nat more than twice the speed possible on today’s expressways.\u201d (Gao,\nHensley, & Zielke, 2014<\/a>).<\/p>\n\n\n\n

GM\u2019s vision of the future was striking and exciting, but the technology did not yet exist to make it a reality. Ford took a different approach to generating buzz in the market, focusing on the present. Instead of forecasting a future of self-driving cars and super highways, Ford launched a car for \u201cyoung America out to have a good time\u201d: the Mustang (Gao et al., 2014). It engaged the new generation by providing both transportation and personal expression in a stylish, highly configurable, and inexpensive package. Ford estimated it would sell 100,000 Mustangs, but one year after the launch it had sold over 400,000 (Gao et al., 2014).<\/p>\n\n\n\n

Vehicles are now a central feature of everyday life. Since 1964, global vehicle sales have grown by nearly 3 percent on average each year, nearly double the rate of population growth, resulting in one billion vehicles on the road today (figure 1; Gao et al., 2014).<\/p>\n\n\n\n

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Figure 1: Vehicle sales from 1964 to 2014. Image retrieved from Gao et al. (2014). <\/figcaption><\/figure><\/div>\n\n\n\n

However, large-scale\ntrends, such as a surging Chinese automotive market, electrification, and\nurbanization, are beginning to affect the form and function of vehicles and\npersonal mobility systems.<\/p>\n\n\n\n

China leads the way<\/strong><\/h3>\n\n\n\n

In the decades ahead, China\u2019s emergence as a dominant market and production center will have major implications on the future of automotive and transportation systems. China has supported the largest electric car market by far, accounting for more than 40% of electric cars sold in the world and more than double the amount sold in the United States (figure 2; International Energy Agency, 2017<\/a>).<\/p>\n\n\n\n

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Figure 2: China is the leading EV market in the world. Image retrieved from the International Energy Agency\u2019s Global EV Outlook (2017). <\/figcaption><\/figure>\n\n\n\n

China will lead the\ntransition from internal combustion engines to electric cars, with EV sales\naccounting for almost 50% of the global market from now to 2025 and 39% in 2030\n(International Energy Agency, 2017). The International Energy Agency\u2019s Global EV Outlook (2017) also cites\nChina as the global leader in electrifying other modes of transport including\nbusses, two-wheelers, and low-speed vehicles. <\/p>\n\n\n\n

Such enthusiastic adoption of EVs and multi-modal, all\nelectric mobility options has hit automakers that have yet to develop\nmeaningful electric offerings. In China, GM experienced a 17.5% drop in third\nquarter sales compared to the same period in 2018 (Essex,\n2019<\/a>). In fact, the market share of all U.S. automotive brands fell\nto 9.5% in the first eight months of 2019, down from 10.7% a year earlier\n(Essex, 2019).<\/p>\n\n\n\n

Another global\ntrend, of which China is also an epicenter, promises to continue this evolution\nin the automotive and transportation industry: urbanization. According to the\nUnited Nations\u2019 2018 World Urbanization Prospects<\/a>\nreport, 70% of people lived in rural settlements worldwide in 1950. By 2050,\nthe report projects a nearly inverse distribution, with 68% of the world\npopulation living in urban areas. <\/p>\n\n\n\n

Personal mobility\nwill continue to be a critical piece of everyday life. Therefore, governments\nare undertaking large-scale studies to examine population mobility in an\nattempt to prepare for greater urban population density. Vehicle connectivity,\nelectric and self-driving cars, as well as mobility systems will be essential\nto supporting population mobility in these dense urban centers. <\/p>\n\n\n\n

Personal mobility is\nabout to shift dramatically. Data will become the key driver of mobility\nservices and solutions, causing automotive original equipment manufacturers\n(OEMs) to change their business models completely. Connectivity, assisted\ndriving, and e-mobility are just three trends that are shaking up the world of\ntraditional automotive OEMs. Moving forward, OEM\u2019s will derive more revenue from\nthe data generated from a car than the sale of the car itself.<\/p>\n\n\n\n

Growing digitalization will generate new business models <\/strong><\/h3>\n\n\n\n

As urbanization progresses, real-time connectivity will be pervasive between vehicles and smart vehicle infrastructure, enabling a greater number of vehicles to travel safely and efficiently (figure 3). Growing automotive digitalization<\/a> also allows software updates and remote performance, emissions, and maintenance data monitoring to ensure safety and reliability.<\/p>\n\n\n\n

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Figure 3: Connectivity between vehicles and smart infrastructure will be pervasive. <\/figcaption><\/figure>\n\n\n\n

The shift from mechanical to digital systems<\/a> will benefit OEM\u2019s with new business models. Sensors on cars will record everything happening, both in the car and in the external environment. OEMs will be able to leverage this data to create new opportunities for revenue generation. Recording a car\u2019s route, its speed, the wear and tear on its components, and even road conditions can be used to enhance customer service or provide predictive maintenance suggestions. Sensors collect telematics and driver behavior data. That data can be analyzed in real-time to keep the vehicle\u2019s performance, efficiency, and safety in check. It also provides vital feedback for cities and states about traffic volume and roadway design.<\/p>\n\n\n\n

Researchers at\nMcKinsey and Company estimate that the market for vehicle-gathered data will be\nworth $750 billion a year by 2030 (Bertoncello,\nCamplone, Husain, & M\u00f6ller, 2018<\/a>). The merging of the physical and\ndigital worlds through digitalization will open up new revenue opportunities to\nthose companies that experiment and adopt change faster. It is critical for\nautomotive OEMs around the world to invest in digitalization technology to capitalize\non the immense opportunity available in the future of mobility. The automotive\nindustry has learned quickly that consumers demand digitally enhanced\nexperiences as they are researching, purchasing, and operating their vehicles. In\naddition to these new customer demands, the industry is under constant influx\nof new technologies and new players. The automotive industry is changing, and\ndoing so quickly. <\/p>\n\n\n\n

Industry giants are moving away from the traditional role of\nhardware provider and embracing the role of connected mobility and\ntransportation solutions providers, ranging from new digitally enabled services\nto the software-driven, battery-operated, artificially intelligent, autonomous\nvehicles of the future. As they undergo this transition, digitalization in the\nautomotive industry will synergize with other industries, leading to more\nrevenue opportunity. For instance, the merging of the physical and digital\nworlds through the Internet of Things (IoT) could generate up to $11.1 trillion\na year in economic value by 2025 (Manyika\net al., 2015<\/a>). <\/p>\n\n\n\n

The concept of the autonomous freedom machine will transform over the coming years. The change has already begun as electronics and software overtake critical systems in the automobiles of today. In particular, automotive embedded software is one of the most important systems in modern vehicles. Embedded software controls everything from infotainment and passenger comfort to vehicle essentials, like engine control, braking and steering, to more advanced driver assistance, safety and security features. The realization of higher levels of autonomy will only cement the importance of software, as it will form the decision engine for self-driving systems.<\/p>\n\n\n\n

This is part one of a seven-part series on the growing importance of automotive software. Continue reading at the links below, <\/em>or visit siemens.com\/aes<\/a> to learn more.<\/h5>\n\n\n\n
Part 2: The Data Deluge: What do we do with the data generated by AVs?<\/a><\/em><\/h6>\n\n\n\n
Part 3: From Mechanical Marvels to Software Suites: The growing role of automotive embedded software<\/a><\/em><\/h6>\n\n\n\n
Part 4:<\/em> Automotive Embedded Software Takes Center Stage<\/em><\/a><\/h6>\n\n\n\n
Part 5: Application Definition and Planning<\/a><\/em><\/h6>\n\n\n\n
Part 6: Application Development and Quality Assurance<\/a><\/em><\/h6>\n\n\n\n
Part 7: Application Delivery and Monitoring<\/a><\/h6>\n\n\n\n

References<\/strong><\/h2>\n\n\n\n

Bertoncello, M.,\nCamplone, G., Husain, A. & M\u00f6ller, T. (2018, March). Accelerating the car\ndata monetization journey. McKinsey\nCenter for Future Mobility<\/em>. Retrieved from https:\/\/www.mckinsey.com\/industries\/automotive-and-assembly\/our-insights\/accelerating-the-car-data-monetization-journey<\/a>\n<\/p>\n\n\n\n

Essex, R. (2019, October 10). GM’s China sales continue to\nslump in third quarter as US automakers lose market share. Detroit Free Press<\/em>. Retrieved from https:\/\/www.freep.com\/story\/money\/cars\/general-motors\/2019\/10\/10\/gm-china-sales-stock-baojun-buick\/3929650002\/<\/a>\n<\/p>\n\n\n\n

Gao, P., Hensley, R. & Zielke, A. (2014, October). A\nroad map to the future for the auto industry. McKinsey Quarterly<\/em>. Retrieved from https:\/\/www.mckinsey.com\/industries\/automotive-and-assembly\/our-insights\/a-road-map-to-the-future-for-the-auto-industry<\/a>\n<\/p>\n\n\n\n

International\nEnergy Agency (2017). Global EV outlook 2017: Two million and\ncounting. IEA Publications.<\/em> Retrieved\nfrom https:\/\/www.iea.org\/publications\/freepublications\/publication\/GlobalEVOutlook2017.pdf<\/a>  <\/p>\n\n\n\n

Manyika, J., Chui, M., Bisson, P., Woetzel, J., Dobbs, R.,\nBughin, J. & Aharon, D. (2015, June). Unlocking the potential of the\nInternet of Things. McKinsey Global\nInstitute<\/em>. Retrieved from https:\/\/www.mckinsey.com\/business-functions\/mckinsey-digital\/our-insights\/the-internet-of-things-the-value-of-digitizing-the-physical-world<\/a>\n<\/p>\n\n\n\n

United Nations\nDepartment of Economic and Social Affairs. (2018). World Urbanization Prospects\n2018 Highlights. Retrieved from https:\/\/population.un.org\/wup\/<\/a>\n<\/p>\n","protected":false},"excerpt":{"rendered":"

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