CIO Talk MEA News

Digital Transformation in the Automotive Industry

Ebrahim Kamalzadeh, Head of Information Technology, Al Nabooda Automobiles Dubai – UAE

According to a new United Nations dataset launched on 16/May/2018, 55% of the current world’s population lives in urban areas. The projection shows a 68% shift from rural to urban areas by 2050. The overall growth of the world’s population could add another 2.5 billion people to urban areas by 2050, with close to 90% of this increase taking place in Asia and Africa.  Rapid population growth and density of the urban areas make the development of public and private transportation critically important.

The modern cities foster new technologies to a great extent. The current noise level, air pollution produced by fossil fuel, the limited amount of parking space in the populated cities, and inevitable human driving errors, demand reshaping the current business model of the automotive industry. To align with new technologies and population density of the urban areas, smart cities desperately pursuing alternate ways of organizing private and public transportations. There are several opportunities available for tailoring private and public transportations.

Perhaps healthcare and automotive are two of the major sectors undergoing rapid changes in recent years. They achieve the highest impact as a result of digital transformation.

After all, vehicles are a great means of transportation and people spend a considerable amount of their time in vehicles. Digital transformation provides the industry with a new business model. This model is consumer-centric and demands integrating new technologies into all areas of the business. The brand owners embrace continues product adaptations and provide additional values to consumers. 

The digital transformation helps the automotive industry to evolve further and offer consumers with innovative digital services driven by software applications. The digital services bring a new life to the automotive business and position the vehicles to an extended level referred to as the Mobility Unit.  Mobility is a new thinking stage, primarily in the life of millennials and Gen Z generation cohorts. Achieving the mobility in the automotive industry necessitates a new platform where mechanical, technological, and biological knowledge converges to create this new concept. 

The new age-groups anticipate the vehicles to be an integrated unit embedded with digital products and services. To empower the Mobility Unit, fostering new technologies is an unconditional part of the journey. World witnesses how current technologies undergo rapid changes and supersede with the new and advanced platforms. The technology life cycle becomes shorten and consumers don’t prefer owning vehicles any more since it is not a cost-effective effort.

The consumers require accessing the Mobility Unit 24/7.  They do not restrict themselves with a specific vehicle model and prefer to have flexibility in selecting their vehicle brands and models fulfilling their driving desires. Reserving the vehicles in advance and detailing the specific features of the vehicles to become an obvious pre-requisite.  The vehicles are considered not only a means of transportation but it would be part of an experiential and emotional journey. The consumers expect to have embedded an advanced technology empowering the consumer to access data during the onboarding stage and augmented with a range of social media and entertainment services. The automotive industry focuses on providing a pleasant experience and reward with a high level of customer satisfaction and loyalty. Video conferencing would be an inevitable part of this journey and used to perform job-related, social, and private activities.

Tesla has taken leadership and pioneering in building Electric Vehicles (EVs). The EVs are the potential opportunity for lowering CO2 emissions. However, carbon debt associated with EVs or battery manufacturing is still high. The life cycle and disposal of the batteries is a problem associated with the EVs. EVs use the power grid to recharge. Having more EVs on-road and further empowering EVs demand an increase in the consummation of the national grid. Looking for other sources of energy to recharge the batteries is the focus of the industry.

Autonomousor self-driving is the result of applying digital transformation and remains one of the prime focus of the automotive industryThe concept of driving autonomously brings revolutionary changes to the industry. In the autonomous concept, 6 stages are categorizing the automation levels of the vehicles starting from Level 0 (fully manual) to Level 5 (fully automated). The present technology yet to mature providing the consumer with a Leave 5 autonomy. The technology-based companies, such as Google, are already stepped into this path and are way ahead testing their Waymo for Level 5 autonomy. 

Over-speed, road safety ignorance, driver’s distraction, and symptoms of serious health conditions such as heart attack are some of the known examples of human driving limitations. Autonomous driving is a promising technology to safeguard people for impractical human driving behavior that may cause accidents, road unsafe, and take the lives of many people annually.

Meetings these objectives necessitate incorporating new technologies in tomorrow’s vehicles. Traditionally, the automotive supply-chain consists of OEMs, the brand regional offices, and car dealers.  Digital transformation brings a new shape to the supply-chain model and extends further by having new joiners onboard which are technology and software vendors. The new players having an important role in bringing disruptive innovation to the automotive sectors. The giant OEMs such as VW already have the tipping point behind and reshape their role in the industry. It is interesting to know how technology-based companies having a game-changing contribution to flourishing innovation in the industry. 

Digital transformation depends highly on the availability of data and hence Big Data is an essential part of the transformation journey. The Mobility Unit would be furnished with a mechanism enabling continuous data exchange to outside’s world using sensors and cameras embedded in the vehicles. Cloud services communicate with the Mobility Unit and the surrounding environment where the unit operates. 

5G is the new mobile network connectivity allows exchanging massive amount of data between the cloud services and the vehicle or vehicle-to-vehicle. 

With a bandwidth of 10Gbps and a low latency, the new mobile technology empowers the Mobility Unit with capabilities such as understanding surrounding environment real-time and on-the-fly update of software applications driven by cloud services. 

The IoT elements incorporated in the vehicles are embedded with sensors collecting data and delivering to the cloud or to the build-in intelligence agent of the vehicle. 

Autonomouswon’t be feasible without AI and Machine Learning. These technologies are critical in providing the Mobility Unit with features to safeguard the vehicle in the environment where the vehicle operates. Environment Awareness is critical important empowering the Mobility Unit to monitor the position of nearby vehicles, reading road signs, tracking other vehicles, looking for pedestrians, maintaining distance with other objects, detecting road edges, identifying lane markings, weather forecasting, and understanding traffic around/ahead of the vehicle.

The development in modern technology and the online connected vehicles provide hackers a perfect playground. The autonomous vehicles are prone to cybercrime and Information Security became a challenging effort for future vehicles. The amount of data inflow/outflow of the Mobility Unit would be enormous. Encryption protocols and Blockchain technology should protect the privacy and confidentiality of data. Threats of penetrating the intelligent agent of the Mobility Unit may have disastrous consequences. The threat vectors for the Mobility Units are more as it is a moving object and continuously connects to different networks. Penetrating and hacking the networks where vehicle connects to, might cause disabling the vehicle sensors which leads to major crashes. The Mobility Units are more vulnerable to threats and attackers then many other devices.   

The strategic business model for the Mobility Units is planned to operate base on a sharing model and used by different consumers. Using and accessing digital services during onboarding and driving events will cause many data to exchange specific to the user. When Mobility Unit is handover and stations for the forthcoming consumer, the datasets used by predecessor users should reset entirely. The security architecture of Mobility Unit will be complicated as it connected to many devices and networks. The Mobility Units might be used to travel in different states or countries. Hence the local privacy law and legislation are debatable subjects and concerns of human acts such as GDPR. Sealing the vehicles with a security shield and protecting the vehicles against penetration attempts, phishing, ransomware or any type of malware attack is tough and challenging for the security providers.

The OEMs, Car Dealers, Governments, local authorities, fleet companies, insurance, and fuel providers are some of the major stakeholders impacted by the outcome of applying digital transformation in the automotive industry. Technology is fast-moving and benefiting the development of the industry rapidly. However, the industry encounters technological, infrastructural, environmental, and legislative challenges reaching the maturity of its ultimate goals.

About the Author:
Ebrahim Kamalzadeh is a professional IT leader with 27+ years proven track of implementing and managing complex IT projects in various industries majorly automotive, manufacturing, general trading and hospitality. Working for system integrators and being part of enterprise ecosystem facilitated me in gaining knowledge for integrating and utilizing technology in-line with business ambitions.
Worked with executive management of the enterprises to establish business transformation vision and lead the technological development.

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