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Be in pole position to drive digitization in the auto industry

By leveraging digital across all dimensions, OEMs could boost profitability exponentially.

Overview

Car making isn’t only about the product any longer. It’s becoming a digital service game. Most OEMs recognize digitization’s power to transform their brands. But although many are partially digitizing key areas of their value chain, few are going far—or fast—enough. To unlock digitization’s full value potential—a total profitability boost of close to 43 percent by 2020—OEMs also need to build new digital business models.

DOWNLOAD ARE YOU READY FOR POLE POSITION? DRIVING DIGITIZATION IN THE AUTO INDUSTRY [PDF]

Key Findings

Any automotive brand could be preparing for pole position in the auto markets of the future:

  • Accelerate now. Digital disruptors are already eating into all areas of the auto value chain. If they fail to digitize, OEMs could lose up to 15 percent of current profitability, and significantly more in missed future opportunities.

  • Partially digitize to pick up pace. By 2020, partial digitization of the existing value chain could increase an OEM’s profitability by 36 percent.

  • Build new business models for long-term success. By moving at speed to create new digital platforms and ecosystems that leverage customer data and monetize it, any automotive brand could boost its profitability by 6.5 percent by 2020—and by 2025 could be generating as much as US$2.8 billion in new value.

Recommendations

Every player can accelerate the process:

  1. Set a destination.
    Define the value of digital for your brand, align with a digital vision, and provide compelling leadership from the tope.

  2. Chart the roadmap.
    Identify your required initiatives, timeline and approach, and ensure you can be flexible while remaining targeted.

  3. Build digital IQ.
    Make digital integral to your brand’s DNA, training to upskill, hiring to boost analytics capabilities, and partnering with the disruptors and others to enhance them.

  4. Foster agile decision-making.
    Establish a governance and organizational structure that helps your people respond fast and flexibly in uncertain markets.

Learn more about Accenture Strategy

The business model for car makers is becoming about much more than just cars. Original Equipment Manufacturers, or OEMs, are getting into the digital service game.

DOWNLOAD THE "ARE YOU READY FOR POLE POSITION?" INFOGRAPHIC (PDF)


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