The disruptive changes facing the automotive industry today, as well as many of the major innovation drivers, have digital roots. Connected cars, autonomous driving, and the Internet of Things all demand a digital proficiency that few industry players currently possess. Adding to this challenge is the fact that most automakers have not considered strategies to go digital; “making it happen” is now the major challenge for addressing the “connected life” needs of their customers, even as a range of tech-savvy newcomers encroach on car manufacturers’ traditional territory.
Capturing business opportunities in the digital space will require automakers to fundamentally change their approach. In the past, they might have pursued a solitary, self-sufficient path, rarely turning to suppliers to meet their innovation needs. To thrive in the digital world, however, innovative, interconnected business models are necessary. Companies must develop ecosystems of partners, establish multi-speed capabilities, and completely rewire their product development processes.
While none of this will be easy, there are no alternatives: Those automakers who are slow to adapt will quickly find themselves outmatched by players who are willing to make the substantial investments needed to transform their businesses.