The digital revolution of the automotive industry is already underway. As a result, many manufacturers and suppliers are embracing the advantages of digitalisation, benefiting from increased productivity, greater flexibility, reduced costs and shorter times to market.

Customers are also likely to benefit from more personalised, higher-quality vehicles with increased product content and connectivity.

The UK automotive sector has enjoyed unprecedented success in recent years. But as the UK deals with the repercussions of Covid-19, change is creating new challenges for the automotive sector. To remain globally competitive and successfully pivot in a demanding climate, manufacturers are taking advantage of increasingly affordable technology to enable unprecedented agility in automotive.

As computers become more powerful, technologies such as Virtual Reality (VR), Augmented Reality (AR), Artificial Intelligence (AI) and social media are beginning to shape the future of the sector serving as robust marketing and communications tools for manufacturers and dealers.

 

Visualising tools

The advancement of AR/VR has already become a billion-dollar market and it's projected to grow well beyond a $120 billion market within a few years. But, what will its role be in the automotive industry?

 For dealerships, VR has the ability to transform showrooms into digital marketplaces equipped with virtual reality capabilities. Immersive showroom experiences allow car retailers to reduce the showroom size, cut costs, allow for social distancing and enhance customer experience all at the same time. Now, customers can enjoy a real-time experience of test-driving a particular vehicle that wouldn't usually be in the showroom. Moreover, combined with AR, dealers can personalise vehicles at the touch of a button demonstrating paint jobs, alloy changes, interior upgrades and customisation in seconds. Audi has already deployed more than 1,000 VR showrooms and planning to expand.

Used-car dealerships are also adopting this technology to showcase their stock remotely. VR replacement allows dealers to demonstrate unlimited vehicles to a customer - a cheaper alternative to physically transporting products.

 

Digital communication

In the age of the informed consumer, online research makes up a considerable part of the purchasing journey transforming the car-buying experience. With greater access to product information online, the digital revolution has shifted the power from salesmen and dealerships to empowered consumers.

Now, the decision is no longer solely based on the product itself, how effectively dealerships communicate their message will impact how likely consumers are to part with their hard earned cash. To remain relevant in a crowded market, dealerships and automotive brands need to have a water-tight digital marketing strategy to connect with consumers on the hunt for information. Social media and website efficiency reduces the need for physical contact making it a cost-effective and efficient tool to showcase your offering and meet customer expectations.

Digitalisation has also had profound effects on the connected supply chain by driving costs down, engaging the consumer, and collecting data to benefit the customer. Communication streamlined by social media and the internet helps the industry to collect feedback, monitor advanced algorithms and use AI to perform tasks such as schedules and workflows reducing human error and cost.

 

Conclusion

Thanks to digitalisation, the automotive sector stands to gain £6.9bn every year by 2035. The cumulative total benefit to the economy could be £74bn by 2035. New technology also helps to bridge the gap between social distancing and physical experience, but there are challenges that still need to be overcome by the sector and by the government.

Digitalisation will be fundamental to ensuring the future of dealerships during a challenging social space but the UK's digital infrastructure must be improved. Cyber security needs to be strengthened and the skills gap must be addressed before digitalisation can take shape. Covid- 19 has helped to accelerate the process but further investment is required.