Deloitte CIO Roundtable discusses how automotive companies should navigate digital disruption

Published: 18 April 2016

Innovation and technology advancement are brining disruptions to the automotive industry, changing the way how companies should reassemble their products and services and compete with one another in the new digital environment. To study the impact from digitization, Deloitte China hosted the inaugural APAC Automotive CIO Roundtable in Beijing on 8 April, gathering chief information officers (CIOs) from internationally recognized automotive brands in China and industry experts from Deloitte Global network (including Asia Pacific, the U.S. and China) to discuss how companies should address both challenges and opportunities from digital disruption.

Digital services which have increasingly empowered consumers will bring disruptions to the automotive industry. China is emerging as the world’s largest automotive market, where the sales volume of vehicles is expected to surpass 30 million units by 2020. Digital disruption will have a significant impact on Chinese automotive companies, as well as the ecosystem for the production and sales services of automobiles.

"Nowadays, mobile vehicle does not only perform the transportation function. Customers are looking for new features and the purchase of automobile is a unique experience for customers and this can be improved by leveraging digital technologies,” said Marco Hecker, Automotive Industry Consulting Managing Partner, Deloitte China. "When it comes to providing customer-centric services, data shows that 600 million Chinese are regular online users while over 60 percent of consumption is conducted through mobile devices. Digital tools and channels will become important weapon for recruiting customers and elevate customers’ loyalty. In the process, the capabilities for companies to devise proper digital strategy and build a shrewd sales plan become even more important.”

Deloitte China Tech Strategy and Architecture Partner Pascal Hua explained that “digital technology are pushing many automobile manufacturers to improve their information technology capabilities. For instance, some automobile manufacturers have leverage new technologies to make their vehicles even smarter. For example, where there are technical problems and issues, there will be an alert from the sold vehicles to the car manufacturer, along with appointment with customers to arrange for maintenance. This will not only improve the level of customers’ satisfaction, but will also help accumulate customer and vehicle information, which can be used for expanding aftersales services in the future.”

At the event, Deloitte global industry experts also introduced the latest digital applications in auto industry in different markets. "The advent of the rapidly advancing digital world has transformed consumer behaviour, catalysing a necessary shift in priorities for marketers. Car makers in the United States have invested huge amount of time and resources to innovate their products with more driver-assist technologies, such as adaptive cruise control, active park assist, and driver alert system. Another key focus is the development of connectivity technology which gives drivers a remote access to their vehicles through their mobile device," said Andrew Dinsdale, Deloitte Digital Director, Deloitte Global. In creating this future, Deloitte's digital marketing conceptual architecture draws its power from end-to-end integration throughout the organization, he added.

The APAC Automotive CIO Roundtable 2016 was concluded by a roundtable discussion, in which many CIOs have shared their first-hand experience on how they adjust their business models in response to the emergence of new digital technologies. In addition to sharing their observations on global and local industry trends, our Deloitte automotive industry experts also provided their insights on how CIOs can better leverage digital technologies to address some hot button issues.