Let's start with a basic question: what is a car? Ask that a few years ago and you'd get a basic answer: the means to get from point A to point B. An opinion that still holds sway in many automotive Original Equipment Manufacturers (OEM) today.
But increasingly there is a rival viewpoint, driven by evolving customer expectations and the frenetic pace of technological innovation. Where the answer emphasises the role of the vehicle as a virtual companion, a platform for entertainment, connectivity, and an extension of a person's digital life - with the transport aspect considered the most basic of features. At least when it comes to the purchasing decision, as the concept of mobility itself faces a radical redefinition. Understanding what this means for product development is a sizeable task for any OEM, as they enter a new reality where the substance of a vehicle - its mechanical performance - is overshadowed by the style that comes with it.
A more interactive relationship
Not that any of this should come as a surprise. The industry's shift in focus from product to service was always going to have inevitable consequences. Customers have had their eyes opened to new features and possibilities. Priorities have moved on, and leading OEMs are doing their best to both keep up while anticipating future demand.
The challenge however is significant, and begins with the understanding that cars can no longer be built and sold as part of an isolated, one-off process. Instead, the emphasis is increasingly being placed on delivering connected services that evolve and adapt over the vehicle's full lifetime of operation.
Powered by software, these are services that take advantage of increased cloud connectivity to enable a more interactive relationship between customer and car maker. Technology that's also transforming the overall mobility experience. Where OEMs are being challenged to redirect their innovation resources toward delivering a constant stream of new features and functions, the proverbial 'style', or risk getting left behind.
The cutting edge of innovation
The scale of change being discussed here is analogous to the development of the smartphone. A product that over recent years has progressed from a very specific function (making calls, and SMS texting), to being a platform for software development - and a seemingly endless array of applications. Each one enabling users to personalise their experience in terms of entertainment and value-adding features, supported by constant updates and enhancements from the manufacturer.
Now compare the smartphone to the modern smart car. Two products that have seen the traditional focus on utility and cost give way to the demands of interactive mobility and entertainment. And for automotive OEMs, the implications of this shift are already being keenly felt. Where the delivery of value-adding services to complement the mobility experience is fast becoming a key battleground in the war for consumer mindshare - and therefore the cutting edge of innovation:
Where AI tools are now being deployed to recognise when a driver is tired, and make suggestions for a suitable rest stop
Where vehicle sensors can detect the driver's mood and provide appropriate lighting and music for the journey
Where navigation aids offer proactive updates in real-time, factoring in data such as congestion and EV charging needs
In other words, technical ingenuity is helping open a pandora's box of future capability. Being first to imagine new offerings will in turn become critical to OEMs, and tax their R&D teams to the maximum. Every aspect of the driver and passenger experience will be carefully assessed, and limits pushed to their logical end points. For example, can more immersive interactivity be delivered when cars are in cruise control on motorways? And what opportunities will enhanced voice control present? Answering these questions demands a clear idea of how consumers want to consume content - from social media to work presentations - in transit, and consistently innovating to meet these needs.
A two-phased approach to progress
There is however a logical 'before and after' scenario that OEMs face in the development of new capabilities, due to the future introduction of fully autonomous vehicles:
Before: where obvious limitations exist for the driver to remain free from distractions while in control of the vehicle
After: where drivers become 'just another passenger' able to direct their full attention to the complete suite of digital services available
What we can say though with a degree of confidence is that the after stage is still a few years away. Hence why current activity is largely centred on enhancing the before. And it's here that we're seeing tools like Software-Driven Transformation, Artificial Intelligence, and data connectivity being used with creative freedom to revolutionise the 'style' on offer. To imagine new ways for delighting customers, and for bringing an unmistakable wow factor to new models. All done with a view to a vehicle's entire lifecycle, and particularly the latter stages where arguably the most untapped potential for revenue generation is to be found.
So, is substance now beginning to trump style in automotive design thinking? The answer is not a certain yes, but the trend is heading in that direction. It has to, as consumers recognise what's possible when their car becomes a virtual companion, and feeding this expectation will undoubtedly become a fixation for OEMs.
Progress will be based on new business models that help introduce a more pragmatic, flexible approach to problem solving and innovation delivery. Speed to outcome will be everything. All supported by a technology infrastructure with the scope and scale needed to reboot traditional production processes. This is an inevitable development as OEMs make the disruptive move from being an engineering/hardware operation to technology-led businesses.
Now is the time for automotive OEMs to reinforce their development capabilities. To ensure the agility is in place to respond dynamically to any new opportunity, while allowing innovation to flow seamlessly across the business. This is our goal at Capgemini, helping automotive OEMs become 'fluid like water'. To find out more about how we do this, including a more in-depth analysis of challenge and opportunity, read our latest episode of Technovision 2022 - which you can download here.
Chief Technology & Innovation Officer, Global Automotive Industry