The age of digital (r)evolution

We have been accompanying automotive companies on their journey to digitization for years. We support them in the implementation and integration of modern ERP systems, and thanks to our extensive experience and knowledge of the environment in which they operate – we offer advice in business transformation. Zuhri Yusof, Executive Advisor at Hicron, talked about how Industry 4.0 and the recent events changed processes in the automotive sector.

For nearly 20 years of work in the automotive industry, I have traveled the world talking to component and vehicle manufacturers, importers, and dealers. There is no denying the rapid changes that are taking place in this field. After going through the events of the past two years, especially the pandemic that no one expected, it is fair to say that the industry coped well. I am excited to see how the automotive market is recovering in the Middle East, Asia, China, and the United States. They are blooming and growing very fast.

How important was Industry 4.0 in all of this? Some say it is the fourth industrial revolution.

On the one hand, it can be considered an evolution, as development is constantly progressing, but it is important to understand that the industry has to adapt very quickly as a result of high customer expectations. From this perspective, it is a revolution that started 10 years ago. Industry 4.0 is the time of digitization. The time where everything has to be connected. I am talking about communication between autonomous vehicles, information exchange in supply chains, automation of production and all business areas. In evolution, activities are carried out step by step. These steps, however, are taken very quickly because that is what consumers expect.

Even 15 or 20 years ago many companies would be against the changes, arguing that the consumer was not ready for the new technology. With a whole new generation easily finding their way in the digital world and the adaptation to multiple solutions forced by the COVID-19 pandemic, the consumers are not only ready for the change, they are expecting it. They want to know when they will be able to buy a car online and even to communicate with a vehicle that is driving next to them.

The changes are greater than it may seem because they affect everything around us. It is not only passenger cars and their manufacturers, but also producers of single components, trucks and heavy equipment, spare parts, and many others.

Did the pandemic play a significant role in this transformation?

Disrupted supply chains made entrepreneurs look for alternatives and new management methods. They already know how to get components to the right place at the right time. This allowed the logistics to become stronger and develop its own kind of resilience. We continue to face obstacles, but we are now closer to the end of this journey.

IT solutions were implemented that were to be launched much later, like the aforementioned online vehicle purchase. The consumer can now not only configure the vehicle, but also see it in a virtual showroom. Outside and inside. Just like with everyday shopping, it will also be delivered to your door.

What about dealers then?

It seems to me that the role of dealers will change a lot. Manufacturers are currently focusing on vehicle electrification. Availability of parts and support for them is still limited. Dealers will act as intermediary partners between the customer and the producer. Right after the sale, they will take care of the buyer by providing customer experience at the highest level and assisting with any issues, such as supplying the right parts or servicing.

Trends are moving towards a sharing economy, including vehicles. Carsharing, ridesharing, and general mobility as a service. Vehicles can be shared within a country or city, you can rent your cars. And I am not just talking about the economy class here, this also applies to an entire range of luxury cars.

What do customers expect of digitization?

Expectations drive the changes we experience in our daily lives. Companies are focusing more and more attention on end users. When selling a vehicle 10 years ago, dealers did not have many options for keeping in touch with the customer. They only saw them again if they decided to return to the showroom. Now, thanks to the use of new channels, this interaction is possible. The seller may ask if the customer is satisfied, if there is anything they can do, invite them for a free check-up, and use the opportunity to offer additional benefits or perks.

But communication requires comprehensive company digitization. So that customer service employees have a full view of the situation. They need to know exactly what vehicles they have, which ones were sold and how, what additional services the customer chose, when they come for maintenance and how long it takes, and how much money they pay for repairs. All this data is crucial, so it is important not to limit the implementation of new technologies only to the point of contact with the customer, but also to ensure strong internal systems.

At Hicron we try to recognize the needs of the industry and together strive to implement future-oriented solutions in the area of business management, while keeping in mind the customer contact zone, both in B2B and B2C relations. The expectations are very high, which is a very good signal for us as suppliers of management support software. During the pandemic we had the opportunity to support automotive companies, now their numbers have grown significantly. We help them undergo complete digital transformations. Primarily in transferring data or calculations to the cloud and creating innovative solutions that help adapt to the changing environment.

What do you think the future of the automotive industry will look like?

We live in the information age, and the future is data – the aforementioned big data, its collection and processing. We use a variety of tools and safeguards to ensure the confidentiality of the information we collect and minimize the risk of disclosure. Even so, some are still reluctant to share them. However, I am fortunate enough to work with companies that understand that this exchange benefits both them and their customers.

In the near future, data processing may even affect vehicle-to-vehicle communication. They will inform each other if they get too close, something is blocking the way, or the regulations are violated. Many obstructions, traffic jams, and even accidents can be avoided.

The role of OEMs is changing, especially in terms of leveraging big data. They are turning into some kind of databases that process a lot of information per second. They know the location of all dealers, they know whether you drive like a madman and how you take care of your vehicle. In a world made up of data, it is important to figure out how to process and use it.

With the customer’s consent to further data processing, sales goals can be achieved more effectively. Having information, e.g. on the location of your vehicle or about frequent refueling on the same route, the owner of the gas station will be able to offer a discount on their services, or a free coffee, and a nearby supermarket – will send a shopping voucher.

Such an exchange enables cooperation in many areas. It increases something more than profit – it affects the quality of life. Big data and its understanding are important for the industry, but also for the entire economy.

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