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The challenges facing the Aftermarket’s future


Representatives from the aftermarket met in Bologna for a two-day conference, with top international experts taking the stand, to take stock of new automotive technologies, from connected cars to self-driving vehicles, as well as  outlining all possible future mobility scenarios and discuss the challenges facing the aftermarket

Guido Gambassi

Technological developments are taking place at an alarming rate,  connected cars are already a reality and self-driving or autonomous vehicles are just around the corner: how will these developments affect the whole supply chain and aftermarket service? This was the question that prompted the organizers of Autopromotec, the international biennial exhibition of automotive equipment and aftermarket products, to organize in June,  9-10, a two-day conference, Autopromotec Conference – State of the Industry, to take stock of the rapid and complex revolution that is affecting the sector, thus responding to the needs and doubts expressed by partners, operators and exhibitors a like.

The Opificio Golinelli,  a foundation with the goal of promoting education and training, spreading culture, and encouraging intellectual and ethical growth, pride and joy of Bologna, was the perfect location for an event created to explore and debate new scenarios and aftermarket business models: a time to reflect and to update, on all current developments, the entire sector made up of equipment manufacturers, spare parts dealers and garage representatives, because, as stated by AICA President, Mauro Severi, in the opening talk of the conference: "the technological revolution has already been widely acknowledged and analyzed by car makers both in terms of product and infrastructure. Now it is high time that the aftermarket becomes aware of these changes".

The conference was organized, considering its great industrial relevance, under the patronage of the Emilia-Romagna region and with the support of the Ministry of Economic Development and ICE - ItalianTrade Agency, and has therefore involved some of the sector’s best international experts, university researchers, representatives of Italian and European institutions as well as business executives and managers who took turns in speaking, to an audience of 350 participants, about the experiences of major international industrial groups and some possible scenarios in a not too distant future.


What about tomorrow’s mobility?                                                                

The theme chosen for this first edition of the General Aftermarket Assembly  was "Workshop 4.0: connectivity and service revolution", with “the internet of things” being the key sentence driving the evolution of the industry; after the initial greetings nothing would have been more appropriate than a talk by Carlo Ratti, director of MIT Senseable City Lab at the Massachusetts Institute of technology in Boston, who turned the spotlight on the new technologies that are changing, and will continue to change, urban mobility forever. For example, an MIT study involving new mathematical models applied to urban mobility revealed that,  in the US, cars are not used for 95% of the time, and estimated that with self-driving vehicles, 8 cars out of 10 could be eliminated, even though the total mileage will remain unchanged;  in fact, one of the benefits of autonomous vehicles is that, after dropping off a passenger  they can independently move to collect a new one and so on.

Connectivity will also be a key element of tomorrow’s road safety, one that might even lead us to do away with traffic lights! What is at stake here is a transport scenario that will eliminate the distinction between public and private transport, calling into play mobility on demand systems (like Uber): a market that will become increasingly relevant in the future, one not to be cut off from, so much so that all vehicle manufacturers are resorting to venture capital funding to do research in this field. And while the automotive industry is looking at these development more in terms of driving experience (connectivity, interaction, infotainment) than performance, the aftermarket and the world of garages will necessarily have to adapt to what the car is becoming : “a computer on four wheels”. Therefore, also assistance and maintenance will be more and more computerized.

The second public address was entrusted to Dipak R. Pant, Head of Interdisciplinary Unit for Sustainable Economy at the Carlo Cattaneo University, who illustrated how some great underlying trends should be taken into account not so much to predict the future, since nobody is able to do so, but rather to determine it, which is much more useful. A first important fact to consider is the aging of the population, which will progressively reduce the demand for private vehicles and increase the need for new mobility systems and services, with on-demand transport systems receiving great consideration in view also of the growing urbanization in many regions of the world. Furthermore, environmental issues, will attach greater importance to ethical evaluation as a criterion or standard of choice by consumers along with the ever more widespread development of rechargeable batteries from renewable sources, which will favour the demand for more and more multifunctional vehicles. The world is moving towards "intermodal mobility systems", with current infrastructures having to be redesigned and production systems, sales, spare parts and maintenance services having to be rearranged and reprogrammed.

The third talk on the second conference day, delivered by Angie Cucco from Google, focused on new business channels highlighting the need to use online tools more than ever before in order to reach consumers. Manufacturers are still investing huge amounts of financial resources in traditional media, but this process is progressively changing as clients increasingly search online before choosing a car (and this is happening in Italy more than in other countries), so that we are now becoming quite familiar with videos posted online as a new form of test drive. But the real challenge will see mobile devices receiving most of the attention: statistics tell us that almost everyone is never more than one meter away from his or her  mobile phone. In a society increasingly connected but short on time, "beating the competition online before meeting the client offline", shortening the selection and purchasing processes thanks to new technologies, will become paramount.



“Robocars” change the aftermarket’s value chain

In addition, during both sessions of the conference, a number of high-profile talks and interventions were dedicated to "Remote diagnostics and connectivity services. Opportunities and challenges for garage service, assistance and spare parts " as well as " Market size and competitive dynamics. The aftermarket world: how the supply chain is evolving ", besides panel discussions with leading representatives of government institutions and industry associations. Many speakers tackled, from very different perspectives, the key factors that are defining the present and future scenario of the automotive aftermarket, starting from technological development currently redefining the role of the automobile as a digital hub. High connectivity was the hot topic of the  two-day conference, one that is bound to attract a number of new players in the industry: telecommunication providers, hardware, software and service suppliers, will all become new specialized partner, as cars continue to rapidly evolve into highly digitized entities, which could, in time, promote also the creation of small highly specialized and innovative start-ups.  Logistics too, as a field of application, has brought great benefits to both the industry and its commercial channels. Furthermore, the topic of Autonomous driving has, in recent years, witnessed a strong growth in patent filings with hefty investments being made by just about all the most important manufacturers, to the point that they are quite confident in stating that the technologies are ready, what is still lacking, though, is an adequate industrial production capacity, and, above all,  clear government policies on this issue, as these will greatly determine future mobility scenarios.  The way we think about cars will also inevitably change, no longer an item of possession but a new commodity: “sharing economy”, will be the keyword for mobility services in the near future (by 2020 one out of ten people will be registered as a car sharing user). Not to mention the changes that will take place in vehicle development cycles. Nowadays it takes between 4-5 years for a technical update to go from the drawing board to the actual car: increasingly connected and digitized vehicles, on the other hand, will soon allow for a continuous upgrade thanks to dedicated software.

The entire automotive industry continues to evolve so deeply and quickly that this will inevitably affect the aftermarket’s value chain too, imposing many changes for all the operators involved, as well as creating many new business opportunities . Already, the aftermarket’s supply chain is witnessing the birth of new international aggregations, with platforms designed to increase the purchasing power, while e-commerce is emerging as a central factor also in this field. In strictly technological terms, remote diagnosis is a theme that will greatly affect workshops in the future, which means that many operations that were once confined to the garage will now be possible from a distance. Nevertheless, when a connected car will contact a workshop to report the need for an intervention, obviously a specialist will have to be available. Therefore, ongoing personnel training remains necessary, if you want to stay in business!


Intelligent tires: when?!                                                         

Obviously, the tire sector could not be missing from this event:  Alessandro De Martino, CEO of Continental Italy, pointed out how the industry is no longer developing components, but systems and solutions, with the development of several integrated elements increasing their effectiveness , and further stating that, even though “intelligent tires” are currently being developed, "a true intelligent tire is a well maintained tire " with a great sigh of relief from all the tire specialists. Roberto Righi, Chief Commercial Officer Europe and CEO of Pirelli Italia added, among other things, how in the transport sector, sensors integrated in the tires made the transition from the simple delivery of the product to creating a complete assistance package for commercial fleets possible,  starting from data transmission, an evidence of how the workshop 4.0 can create new business models.

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