My last blog post built upon Uber’s wrecking ball-style entrance into the cab industry. Less obvious is Uber’s impact in the automotive sector, where the app is creating waves for car manufacturers. Ride-sharing is just one of the trends forcing the auto industry to transform. In fact, some industry observers believe automotive is about to have its most dramatic revolution since Henry Ford’s time.
State of the Auto Industry
Changing Attitudes Towards Vehicle Ownership and Declining Sales
Private car ownership is becoming less and less necessary, practical and desirable in many cities around the world thanks to the rising costs of urban living, civic measures to discourage car use, worsening traffic and lack of parking, and always-available services like Uber and Lyft.
More car ownership trends: As cars have become more reliable, people are holding onto them for longer or opting for used cars. Delayed by student debt and economic uncertainty, young professionals aren’t moving to the suburbs like their parents did; and younger Americans simply prefer ordering a car via app to owning one—all reasons why vehicle sales declined in 2017 for the first time in years. This downward trend will likely continue; for while ride-hailing makes owning a car unnecessary, in a future with self-driving vehicles people won’t even need to know how to drive.
Ride-sharing and the New Car Buyers
Uber has forever changed how we get around, but why is this problematic for automakers? It’s not like ride-hailing is making cars obsolete. The issue is Uber’s impact on consumer behavior. Automobile manufacturers have been marketing new vehicle designs and features to customer types that are pulling away from car buying (for now). Take the new driver: Learning to drive has traditionally been a rite of passage for suburban teens, but far fewer millennials have driver’s licenses today compared to older generations. So, what will the future of car ownership look like?
In the future, ride-sharing companies and contractors – less discriminatory than traditional car buyers – may very well be the auto industry’s top clientele, and vehicles may become increasingly homogenized as a result. Though still far away from fleets of robocabs, car culture is changing: Personal cars don’t have the same social status they used to, and ride-sharing vehicles are invading city streets. Automotive companies must adapt to the social change brought by new mobility services.
The Race to Get Connected and Achieve Autonomy
On top of the classic goals of reducing costs, improving fuel efficiency, increasing sales, etc.; auto companies today are competing to redefine consumers’ relationship with cars and invent the future of driving. They’re designing ever-more futuristic vehicles – battery-powered, self-configuring, able to track the driver’s health and predict maintenance – and investing in the technology to build them: Cloud infrastructure software and analytics, artificial intelligence, mapping systems, plus the talent and expertise to go with these and other bleeding-edge technologies.
Autonomous vehicles may eventually boost private car ownership; but while companies race to develop the first commercially viable self-driving car platform, today’s drivers want better, smarter dealership and driving experiences. As the level of technological convenience and control in their lives increases, consumers expect more of every product and service offered to them. And though ride-sharing and the promise of self-driving vehicles in the next five years threaten to upend the entire model of car ownership, automakers cannot afford to neglect regular drivers. They need to continue to make and sell new cars, delivering semi-autonomous and connected driving upgrades and revamping the car buying process to lure people into dealerships and keep them in the brand.
Getting Ahead with XR: Ford, Volkswagen and Porsche
Arguably more than any other industry, the automotive sector has been the most aggressive in its wearable tech adoption. Auto companies have had the most success implementing exoskeletons, and they’re exploring Augmented and Virtual Reality in multiple areas of the automotive business. Read how Ford, Volkswagen and Porsche are using XR to advance their operations, improve the customer experience and bolster their brands amidst unprecedented change in the auto industry:
In addition to providing assembly line workers with upper body exoskeletons to reduce the physical toll of repetitive overhead tasks, Ford has been working to develop VR platforms for both its customers and designers.
Last year, after an initial pilot phase at its Design Studio in Cologne, the auto giant expanded its use of Microsoft’s HoloLens. The technology enables Ford designers and engineers to more effectively work together on confidential designs and quickly model out changes to vehicles, viewing those changes on top of a real car as opposed to the time-consuming and expensive clay model approach. Ford hasn’t entirely abandoned clay models but with Mixed Reality, designers don’t have to build out a new clay prototype after every design decision; they can just augment the 3D model.
At Ford, Mixed Reality is proving to be a boon to innovation, collaboration, and time to market—improvements that will aid the American auto brand’s efforts to reimagine vehicles, deliver a better in-vehicle experience, and differentiate itself through design. Beyond vehicle design, Ford envisions consumers using AR/VR headsets at home to customize cars and create their own virtual test drive experiences; and Ford dealers using state-of-the-art hologram display cars to more effectively utilize showroom space.
(^Elizabeth Baron, Technical Specialist in VR and Advanced Visualization at Ford, will speak at EWTS 2018.)
In Fall 2017, Volkswagen established a Digital Realities team encompassing 12 of its brands across 120 sites around the world and a Digital Reality Hub to enable long-distance collaboration among team members. The German automaker had been experimenting with HoloLens at its Virtual Engineering Lab in Wolfsburg, to project designs onto a scale model of a VW Golf; and exploring how to apply the technology to technical development.
From these efforts came the Digital Reality Hub, which combines multiple group VR applications and tools into one platform allowing designers and engineers all over to work on the same project simultaneously, exchange and test ideas, and even participate in virtual workshops. In addition to new vehicle models, real locations like factory production lines can be modeled in the virtual environment to trial optimization measures without the need for site visits.
It cannot be overstated how much XR impacts productivity or how critical an efficient network among Volkswagen’s global brands will be to the company’s success in the next phase of the auto industry. Most recently, VW teamed up with VR studio Innoactive to create more than 30 VR training scenarios for the HTC Vive Pro. The automaker plans to train 10,000 employees in production and logistics this year using Virtual Reality.
In November, Porsche introduced the “Tech Live Look” Augmented Reality solution for dealerships, which consists of Atheer’s AiR Enterprise software platform running on smart glasses. Wearing the glasses, an L.A.-based service technician can connect with Porsche’s technical support team over 2,000 miles away in Atlanta and receive remote expert help in identifying and resolving technical issues. The remote expert can take screen shots of the tech’s view or project instructions into her field of view while she works—far more efficient than an email or phone call.
In a July 2017 pilot program across eight dealerships, the “see-what-I-see” technology helped decrease service resolution time by up to 40%. Not only is this the kind of quick turnaround service consumers are coming to expect, but when the solution launches this year it will be a real differentiator for the luxury car brand. Again, as the technology inside vehicles gets more advanced and as companies like Porsche transition from the mentality of car as a product to vehicle as an experience; the capabilities offered by XR – better communication, productivity, visualization, decision making, problem solving and customer experience – become more significant.
(^Heather Turney, Culture and Innovation Manager at Porsche, will speak at EWTS 2018.)
With all the disruption caused by new alternatives to vehicle ownership, new energy options, 3D printing of auto parts, AI, self-driving tech, etc.; it’s more important than ever for automakers to optimize operations, automate assembly lines, engage consumers, and prepare the workforce for more complex manufacturing and IT-heavy jobs. One major step is to adopt XR as a standard tool for design, training, production and customer service. After all, how can you expect to build the future if your factory and workforce are still in the past? How can you invent the future if it takes days and weeks to collaborate and review designs? And how can you sell the future if consumers aren’t excited about it?
The 5th Annual Enterprise Wearable Technology Summit 2018, the leading event for enterprise wearables, will take place October 9-10, 2018 at The Fairmont in Austin, TX. EWTS is where enterprises go to innovate with the latest in wearable tech, including heads-up displays, AR/VR/MR, body- and wrist-worn devices, and even exoskeletons. For details, early confirmed speakers and preliminary agenda, please stay tuned to the conference website.
Augmented World Expo (AWE,) the world’s largest conference and expo dedicated to Augmented and Virtual Reality, is taking place May 30-June 1, 2018 in Santa Clara, CA. Now in its 9th year, AWE USA is the destination for CXOs, designers, developers, creative agencies, futurists, analysts, investors and top press to learn, inspire, partner and experience first-hand the most exciting industry of our times.
photo credit: Pittou2 Salon de L’auto Tesla Model S via photopin (license)