Poised to be one of the largest automotive industries in the world, the Indian auto sector is increasingly facing the pressure to ‘change’. The speed of this change is amplified by the cyclical and value-conscious demands of the Indian consumers. In such a scenario, companies need to include a rapidly growing number of software, mechanical and electronic technologies. The largest challenge crops up in the form of managing and tracking these technologies and their output without any scope for an error. It is in such areas that IBM’s automotive solutions come into play and to understand these offerings we met Eric Leveugle, Vice President, Industrial Sector, IBM.
The growing IT requirements of modern technologies demand a specialised approach by all companies. And that’s where IBM comes in. Leveugle explained that IBM’s role for any industry, including automotive, is to generate more and more data and then to make this data usable. This data is used by various end-services of the companies to ensure their offerings are efficient and productive. Talking of a recent collaboration between Continental and IBM in the area of connected vehicles, Leveugle said that such applications require immense amount of data and also high performance storage applications, which are a stronghold for IBM.
The Indian industry still isn’t as demanding as markets like China, for instance, when it comes to future mobility technologies despite high volumes. That said, he mentioned that newer technologies will certainly make their way into India, albeit at a slower pace than the western countries and China. The present need is to extensively test the upcoming technologies and make their architecture scalable so that billions aren’t lost before a worthy solution is derived. It is in such critical areas that automotive companies can make good use of data services and analytics. Talking of a traffic management system for India, Leveugle said that it’s hard to design an effective solution presently but with time, as more stakeholders start participating, such initiatives will find their way into the Indian mainstream. In all of these, IBM’s role would be more of a partner to OEMs or suppliers, so as to enable the development and effective deployment of such services.
PLM has been an important business area for IBM through the past years and will continue to be so. The PLM solutions used by IBM were jointly developed by IBM and Dassault Systèmes in Paris under a partnership that dates back to about 25 years. As automotive companies look endlessly at optimisation in the area of manufacturing, IBM plans to maintain its strength in the domain through constant evolution of its offerings.
A new growth area, where IBM is spending its resources presently is sales & marketing. In terms of money spent, sales & marketing comes right after technology development and manufacturing for any automotive company, said Leveugle. Automotive companies presently hire thousands of employees in the sales channel directly or indirectly. The key to growth in markets such as India and China is to expand the sales reach beyond Tier I cities into smaller areas. Also, this expansion needs to be rapid for a company if it is to grow sustainably in these markets. IBM will help leverage digitalisation and IT, and also assist in finding newer ways of making the sales & marketing chain more efficient.
An opportunity mentioned by him was the proper use of analytics to gather data for people entering the car showrooms and using it further to market products. Leveugle also mentioned that the automotive industry despite offering emotional products doesn’t fare as good as the retail sector in this area. Citing Europe as an example, he said that B2B buying (leasing, rental, company cars) are increasing consistently. Owing to this increase, although the number of car buyers has reduced, the number of cars hasn’t. The implications of these could be huge for the automotive industry, he added. With the contract of a company car nearing expiration, not all users get information pertaining to their next possible vehicle. If only the companies had all the data for their consumers in a structured manner, they could reach out to the right customer at the right time with the right product. Such sales activities could not only enhance the brand perception but also improve sales significantly.
Such opportunities are what IBM is presently focusing on and will continue to work with automotive companies towards improving conventional methods and processes, concluded Leveugle.
Text: Arpit Mahendra