Speeding Down The Highway Of The Future: Trends To Watch For

Speeding Down The Highway Of The Future: Trends To Watch For


Things that were once considered impossible are becoming a reality today. Though flying cars are not exactly here yet, we already have cars that can drive themselves. Cars with seatbelts that can detect if the driver is falling asleep, while the vehicle is in motion by monitoring cardiac and respiratory rhythms are almost here. While it may take another decade for these technologies to become ubiquitous, the fact is they are here to stay.

A report in Automotive World projects that the demand for autonomous cars will increase and that they will account for 15 % of the sales by 2030. While there are some security issues surrounding autonomous and connected cars, it is only a matter of time before these issues are resolved, and consumers see the benefit of these vehicles and adopt them to accentuate their modern lifestyles.

Today, we live and function in a highly connected world and it is projected to only become increasingly so, as more segments of the world's population embrace digitalisation and connectivity. This compelling variable is pushing the automotive industry to the brink of making strategic changes in order to survive and sustain growth in the digital world. Up until recently, connectivity and digitisation ranked lower on the list of important changes to watch for. But for 2016 and beyond, the agreement is unanimous in the industry – connectivity and intelligence leads the way.

The industry is moving towards connected cars that are fully digitised with advanced infotainment systems, Wi-Fi, vehicle to vehicle communication, real time location and routing services, and automatic diagnostics and repairs. Similarly, intelligent cars with self-steering, braking, parking and accident avoidance features are moving quickly from the design stage to the streets. In essence, consumer demands for ultimate convenience, safety and comfort are driving the automotive market, replacing the traditional approach of releasing technology driven products.


2015 revealed mixed results for the global automotive market. While the US and Europe as a whole saw a boost, emerging markets like China and India remained relatively flat [1]. Automotive manufacturers primarily focused on dealing with the growth in the emerging markets and downsizing internal combustion engines to make more energy efficient vehicles. However, in 2016 these priorities are being swiftly replaced by connectivity and alternative powertrain technologies, which are becoming the top focus areas [2].

Mckinsey's predictions for the automotive industry indicate that by the year 2030 there will be a change in traditional revenue models of car sales with customers preferring upgradability of their existing cars and shared rides. This would mean that similar to an app on the phone, which is upgraded with newer and better features, software in cars will also need to be upgraded due to the growing customer awareness of technological advances.

With space at a premium in cities, consumers will increasingly adopt transportation methods other than their own private cars. The demand for shared mobility is expected to result in a decrease in private car sales and an increase in purchase of shared vehicles. It is expected that one out of three cars by the year 2050 will be a shared vehicle. What is also important to note is that customers are beginning to use transportation that suits their specific needs and rely on multiple platforms to achieve their goals. Take for instance a ride to the shopping mall. Already, customers are using apps on their phones to hail a cab – perhaps a shared one at that – for a price sensitive customer. From a service provider's perspective, this means they have to ensure that their fleet of vehicles can accommodate the number of people and withstand the usage, while providing value added services such as Wi-Fi connectivity.

It is safe to state that people will not completely stop buying cars even though shared mobility services will become popular [3]. Those that are on the market for purchasing cars may choose greener and smarter cars. Electric or hybrid vehicles will become more common on the roads given the regulations around emissions aimed at battling environmental concerns. Despite dropping fuel prices, these vehicles may become popular with consumers if the government encourages adoption of these vehicles through customer incentives such as tax benefits and lower electricity rates, etc.


Big data is expected to take centre stage with automakers as analytics provides innumerable possibilities to help deal with the changes. It takes multidimensional user information and filters through it to help launch the right product or services at the right time. Car purchase decisions typically depend on factors such as lifestyle, need, attitude, value, etc [4]. While these are qualitative factors, analytics provides quantitative support to such data by looking at a cross section of information.

For example, the next generation of car buyers will comprise the millennials – people currently between the ages of 16-36 years. The younger millennials will almost certainly seek features such as navigation system, Bluetooth player, mobile integration, etc [5]. With a long list to cater to, automakers should start planning to anticipate and deliver vehicles that meet the requirements of the young millennials, who are keenly aware of evolving trends and are a highly tech savvy segment. For instance, Toyota and Ford have signed up with Microsoft to deliver value to customers, who need access to data on the go.

The role of software in vehicles is complex, covering a vast range of products and functions. As vehicles become more intelligent, the dependence on software will only grow. It has been reported that the Chevrolet Volt hybrid runs on 10 mn lines of code, which is two million more than a F-35 fighter jet [6]. This growing reliance on software further increases the complexity. Therefore, it is imperative for car manufacturers to ensure that there are no errors in the code that could cause failures. Given the critical role of software in delivering to customer expectations, automakers rely extensively on simulation engineering, which plays a pivotal role in determining if the integration of the software and the hardware will work optimally and seamlessly in the real world.

Car companies are also rethinking their previous engineering models and finding alternative powertrains that rely on software in the aftermath of the 2015 'emission gate' and stricter regulations. A redesign involves increase in costs and time. Here again, simulation engineering solutions fill the gap in testing by keeping costs low and improving time to market.


As connected and intelligent cars make inroads into the auto industry, software companies will need to work hand in hand with vehicle manufacturers to deliver the vehicle of the future. Every time a technological advancement takes place and consumers begin to adopt it, automakers should be ready to connect the dots and leverage it for competitive advantage. For example, Volvo and Ericsson are collaborating to develop a sentient car [7].

The auto industry is at an exciting inflection point. It is going to bring in not only innovations but also newer and creative ways of doing business. What is important is that automakers have an ear to the ground and stay in tune with changing customer expectations in order to sustain growth and market leadership.

[1] 2016 Auto Industry Trends, http://www.strategyand.pwc.com/perspectives/2016-auto-industry-trends
[2] Disruption ahead?, January 2016, https://home.kpmg.com/xx/en/home/insights/2015/12/disruption-ahead.html
[3] Disruptive trends that will transform the auto industry, January 2016, http://www.mckinsey.com/industries/high-tech/our-insights/disruptive-trends-that-will-transform-the-auto-industry
[4] Big data and analytics in the automotive industry, 2015, http://www2.deloitte.com/us/en/pages/manufacturing/articles/big-data-and-analytics-in-the-automotive-industry.html
[5] THE NEXT GENERATION CAR BUYER MILLENNIALS, http://oemsolutions.agameautotrader.com/wp-content/uploads/2013/05/Millennials-Next-Gen-Car-Buyer.pdf
[6] Software Takes On More Tasks in Today's Cars, April 2011, http://www.wired.com/2011/04/the-growing-role-of-software-in-our-cars/
[7] Volvo and Ericsson dreaming of a sentient car?, February 2014, http://www.techradar.com/news/car-tech/volvo-and-ericsson-dreaming-of-a-sentient-car--1227947