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Digitalization and mobility 4.0 "disruption" the key for a new aftermarket business model

 Autopromotec Conference

Connectivity, autonomous driving, electric vehicles and shared mobility. These are some of the mega-trends currently shaping our idea of mobility, prompting the aftermarket to invest in greater digitalization and online marketing. This is what emerged from the latest Autopromotec Conference – State of the Industry -2018 recently organized by Autopromotec and held at the Unipol Arena Just outside Bologna. 

Dino Collazzo

The mobility sector as a whole is undergoing an unprecedented transformation. Connectivity, autonomous driving, electric vehicles and shared mobility are some of the mega-trends currently shaping our idea of mobility, so much so that the entire automotive sector is faced with puzzling questions as to how these changes will impact the aftermarket industry. Connected vehicles are already a reality while tests on self-driving cars are multiplying earth wide, hybrid and full-electric vehicles are quickly gaining in popularity among consumers and large corporate fleet alike, not to mention post-millennial – born after 1997 – who are increasingly leaning toward sharing rather than owning. The consequence is a paradigm shift that, for obvious reasons, will prod the automotive industry as a whole, including component manufacturers, spare parts dealers and workshops, to review their basic business strategies.  But how? This is precisely the question and Autopromotec’s management, responsible for holding an International biennial aftermarket trade show, sought to find satisfying answers during the recent Autopromotec Conference – State of the Industry -2018. Housed at the Unipol Arena, a few miles outside Bologna on June 13 and 14 2018, the venue welcomed some of the sector’s operators, exhibitors, International experts, researchers and institutional representatives who tried to give the over 500 in attendance the answers they were looking for. The goal of the conference was to highlight how the car repair and maintenance business is changing and will continue in its transformation, how Artificial Intelligence, both on vehicles and garage equipment, will impact the sector’s skills and knowhow as well as which new online marketing strategies to adopt. The conference proved also the perfect setting to advertise new products and business solutions, offered by several companies and start-ups, aimed at improving the performance of the entire supply chain. “Changes must never be underestimated - with these words Mauro Severi, President of AICA (Italian Garage Equipment Manufacturers Association), opened the proceedings -. We need to know what risks to take doing more than just looking at data, current trends must carefully be investigated. And these are telling us which is the direction the world is moving. Investments in knowhow, in expertise and in improving the services on offer is what will allow us to manage these future changes, unless we want to run the risk of being swept away”.

Disrupting Innovation driving the change

The rate at which these changes are taking place is forcing the automotive industry along with its supply chains to rethink its strategies. Disruption (or disruptive innovations), was the key word, repeated throughout the conference by all speakers, to illustrate what awaits us and how the future must be viewed. One needs to know how to disrupt. And the first element that must become the object of disruption is resistance to change. The automotive world has long since chosen a different route, one that will lead the entire industry towards self-driving technology, electric vehicles, greater connectivity and sharing. Last year alone, 1.3 million electric vehicles (the number includes hybrid, plug-in and full EVs) were sold around the world. This makes up just 1% of the global market but represents a 58% increase over 2016. According to Ev-Volumes, a Swedish market analysis company, if current trends are confirmed, by 2030 eight out of ten new vehicles will be electric. In this ever-changing scenario workshops can play a vital role if they keep up with these transformations. Repairers will be called upon to manage increasingly sophisticated vehicles. Cars that, besides being battery driven, will be equipped with a riot of smart devices and software.  For example, Adas systems (Advanced Driver Assistance Systems) require an inordinate amount of radars and sensors that, during maintenance and repair operations need specific skills and knowhow. But there is more. Workshops will be compelled to invest in greater connectivity offering customers predictive maintenance services and remote assistance. Which means analysing vehicle data in real time and producing a comprehensive chronology of a vehicle’s life. All services that will add value to the business. Furthermore, workshops will be able to acquire new customers by building a reputation online, a sort of “Automotive Tripadvisor”. Therefore, the only viable solution is to invest in equipment, knowhow and digital technology.


Innovation space

A significant new feature admired during the latest Autopromotec Conference event was an area dedicated to innovation, where several research labs, university spin-offs and start-ups, selected through a collaboration with Aster – a Consortium forinnovation and technology transfer of Emilia-Romagna – met potential industrial partners who took an interest in their projects. The fields of application of these projects ranged from 3D printing to advanced devices for connected vehicles, electric mobility patents (solar-powered car) and a series of researches and studies in advanced mechanics and composite materials. 


Box 1

Four rules for the digital market

Metamorphosis. This is the word used by Francesco Morace, sociologist and essayist, to describe the mutations currently taking place. The profound social and cultural changes we have witnessed over the last ten years or so are shaping our daily life creating new social forms, new families, working habits and forms of consumption. According to the Professor of Social Innovation at the Milan Polytechnic, though, the consequences of such mutations are rather complex and difficult to forecast, hence the need for constant, day to day monitoring. However, one thing is certain: “this transformation is a clear evidence that the future is here, and that making the most of it depends largely on how prepared we are”. And this is especially true for those determined to start a business having to cope with new technologies and innovations. “Rather than online – highlights Morace – we should start thinking in terms of “onlife”. This is no longer an alternative world: a sort of “second life” as we have always considered it. Quite the contrary. Nowadays we have to talk about “totalife” in which everything is integrated and only if we fully understand its scope and importance we might be in the position to use it to the full. We need a new approach”. Morace identified what he calls the “Paradigms of the Future”. Four trends responsible for shaping tomorrow’s human society and market which affect also how services will be managed: quick and deep, trust and sharing, unique and universal, crucial and sustainable. The first element, quick and deep, is linked to the quality of daily living and working where qualities such as promptness and innovation emerge. “Quick reactions and the ability to go deeper are key aspects for those who run a business – says Morace -. But this alone is not sufficient, one must be credible”. Credibility is the second paradigm, the driving force behind what has been called the “Reputation Economy”. A business model based on a relationship with the consumer built on loyalty and sharing. “This must prompt us to be open and attractive for the outside world – points out Morace – being careful to protect and globally enhance our uniqueness”. However, no future can be possible without paying attention to our economic, environmental, social and cultural heritage. “Our future depends on being unexpectedly innovative, being able to imagine what others desire – concludes Morace – in other words credibility is more important than visibility!”


Box 2

Smart city and smart mobility, italy must keep pace!

The challenges surrounding mobility’s future cannot neglect taking smart cities into account. Listening to Andrea Marinoni, Roland Berger’s Senior partner, large metropolitan areas will become the crossroads of global mega-trends: electric vehicles, autonomous driving and shared mobility. But if this scenario is to become a reality a precise route must be drawn. The first step, in this case, is to provide our cities with cutting edge digital technology. Which cannot rule out a business community able to invest in technological innovations and specifically in Artificial Intelligence. A sector where the US and China enjoy a global leadership leaving EU countries lagging way behind: with Italy still filling a rather marginal role. According to Roland Berger’s last report, Automotive disruption radar, after studying the evolution and inclination towards “future cars and mobility trends” within a number of countries, what emerged was a marked difference in the path taken by different countries, in the choice of the type of alternative mobility, in the use of self-driving vehicles and electric vehicles. In this rather diverse scenario, Italy ranks second to last behind Belgium, China, South Korea, France, Germany, Japan, India, Holland, United Kingdom, Singapore, United States and Sweden, mostly due to delays in regulatory, technological and infrastructural fields. And yet, as Marinoni points out, our country manifests a growing interest in alternative mobility, as well as curiosity towards self-driving technology. A positive sign that the industrial system along with the institutions must translate into a new model of development.


Box 3

Assistance, automation and augmented reality: the keys to do business online

As online consumers keep multiplying companies are changing their strategies. And now, having a website can no longer be considered enough to remain competitive. Assistance, automation and augmented reality are now the keys to doing business successfully. All of this according to Angie Cucco, Google Automotive account manager, who explained how to attract and satisfy customers. The first element is to provide personalized assistance, making the experience of finding information and purchasing online easier for the consumers. "Each month, 1 billion Google searches are made, just for spare parts and assistance," explains Cucco. Being able to offer customers what they need means knowing how to do business". The second point relates to automation, that is, the ability to quickly access information and help customers perform actions in a short time. In a CapGemini survey of car buyers, 75 percent admitted that they would buy a car online. While Hedges and Co expect online spare parts sales to exceed $ 10 billion this year alone. Speeding up website operations and facilitating online transactions is the key to open a door of greater profits. The third essential element is the ability, on the part of those who manage an online business, to offer their customers new and engaging experiences through augmented reality, which allows people to realistically view and experience the desired product. "All these technological innovations are crucial but  should not be implemented all at once - Cucco specifies -. What is necessary is to have an open mind and improve your company step by step".

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