Auto execs not so sure that change is necessary

X Scalper

The auto industry may be buzzing with prospects for global upheaval in technologies and business models. But not everyone is particularly worried about it.

A new survey of 1,500 top auto executives from 11 countries by IBM Automotive found that nearly half of those polled feel an urgent need to reinvent themselves and change the way they manufacture and do business to prepare for the coming changes.

That probably comes as no surprise to auto industry followers. Forecasters are warning that automotive companies are on the threshold of a different reality of electric vehicles, shared ownership, over-the-air product changes, data-driven automation, collaborative partnerships, new modes of transportation and changes in the way commuters and cities interact.

But what also emerges from IBM’s survey is how many executives do not feel a sense of urgency about all that.

“We have a group of companies out there that we refer to as ‘laggards,’ ” said Ben Stanley, automotive research leader for the IBM Institute for Business Value. “There’s no way of predicting what will happen to them.”

Half of the survey’s global C-suite executives said that “to succeed or even survive, their organizations need to digitally reinvent themselves,” according to the report. And of that 50 percent, “42 percent said we need to do it right now,” Stanley said.

But that leaves 58 percent of the industry’s leaders saying there is no need to reinvent themselves for the new landscape, or that there is no hurry to do so.

Speaking to the press Wednesday at the Frankfurt auto show, IBM CEO Ginni Rometty added that the survey also uncovered that just 18 percent of the auto companies queried are operating on what is known as a “digital data platform.”

Digital data platforms do business by separating the data and software that control a product from the hardware that uses the data. In the automotive sphere, it might be a company that controls a vehicle’s entertainment service and driving data, but not the console hardware where drivers and passengers see it.

Digital data platforms will likely become more of the core value of a driving experience in the coming decade, Rometty said.

Be the first to comment

Leave a Reply

Your email address will not be published.