Shifting Trends in Auto Industry Point to High Tech Solutions

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While many are excited about the future of the automotive industry owing to the massive media attention that self-driving car technology has received, dynamics within the industry has begun to shift in preparation for the arrival of driverless cars, due to changes brought about by the sharing economy, and due to automakers’ renewed focus on sustainable mobility.

This year, the automotive industry is seeing the trend shift from traditional car ownership to private lease and flexible subscription models. The University of Michigan Transportation Research Institute has confirmed that “car ownership and kilometers driven in America have declined since 2006.” The change was brought about partly due to the popularity and availability of ride-sharing services such as Uber, Lyft, and Grab.

BMW has launched its own luxury ridesharing program called ReachNow in Seattle, through which users can hail a professional driver and ride in either a BMW X1 or BMW 3 Series. The program initially began as a car sharing program, where users can reserve and rent a car through the ReachNow app. It allows users to enjoy the BMW experience without having to own one or to visit a dealer.

In 2016, General Motors also launched its own car sharing service called Maven. Similarly, the choices of vehicles listed in the app all fall under the GM brand. Other automakers are following suit. Volkswagen announced in mid-2018 that it will launch an electric car-share service in 2019, first in Germany and then across cities in Europe, North America, and Asia. French auto makers Renault SA and Peugeot SA have also made similar announcements.

GoCar, Car2Go and Zipcar are some of the most well-known car sharing service providers, but they also compete with more established car rental companies like Hertz and Enterprise, both of which have launched their own on-demand car rental service. Car sharing has been an integral part of Enterprise’s growth strategy since 2012, the year it acquired other small car sharing and hourly rental firms like PhillyCarShare.

Using designated parking space availability as a competitive advantage, New York City has recently repurposed 230 curbside spaces for the exclusive use of Zipcar and Enterprise CarShare, much to the ire of residents who already find parking space availability an issue. This pilot program, which is hoped to ease traffic congestion and cut pollution in the city, sees Zipcar and Enterprise “paying a one-time $765 fee for the curbside spots and $1,000 to $1,200 per year for each space in the city-owned lots.” Both car sharing services are also offering discounts for residents of city-owned public housing.

At the present IoT (Internet of Things) solutions are also quietly building a positive trajectory in the automotive industry, particularly in fleet management. In July 2018, Ooredoo – a renowned international telecommunications company headquartered in Qatar – announced the launch of its fleet management service, which is based on Canadian firm Geotab’s digital platform. Geotab itself specializes in fleet management software and GPS vehicle tracking.

Ooredoo’s new service utilizes sensors on vehicles, connected to Ooredoo’s network to data collection and analysis to aid in decision making for business operations in which fleet management is critical. It’s reported that Ooredoo’s fleet management web-based reporting platform can support an unlimited number of vehicles and users.

Fleet management proves crucial in large companies’ operations, as evident in French multinational company Total Gas & Power’s acquisition of smart fleet management service WayKonnect. This led to Total’s launch of its own fleet management software in 2017, providing automated vehicle connection and a driver dialogue app to a new market segment in Europe.

Although Ooredoo lists transportation, logistics and delivery, construction and heavy equipment, healthcare and waste management as some of the key sectors that could benefit from its fleet management platform, the technology has the potential to reach beyond business or enterprise utility. Data that is collected can be used to design custom maps and optimize routes to reduce vehicle mileage and fuel consumption, even to alert users when a vehicle is in need of repair. If adopted on a mass market level, this would help drive down costs while boosting up customer satisfaction, safety, efficiency and productivity.

Evolving hand in hand with the rise of car sharing, ride sharing, and the advancement of autonomous vehicle technology, automotive IoT will only become more relevant in the near future. The UAE is leading the race now, as Dubai calls for 25 percent of total transportation in the city to be autonomous by 2030, yielding an estimated savings of AED 22 billion annually.

One of the world’s largest information technology company, Huawei, is in talks with German automaker Audi to develop intelligent connected cars for the Chinese market. “We are entering a new era of intelligent vehicles that will see the emergence of new technological synergies between information and communications technology and the automotive industries,” said Veni Shone, President of LTE Solution, Huawei.

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