Software-driven transformation is expected to help leading original equipment manufacturers (OEMs) in the automotive industry gain 9 per cent higher market share over their peers by differentiating themselves with unique software-based features and services, according to a new report from the Capgemini Research Institute.
The research highlights how software-driven transformation is expected to deliver significant benefits for automotive OEMs in the next five years like improving productivity up to 40 per cent, reducing costs by 37 per cent and improving customer satisfaction by 23 per cent.
Despite this, nearly half (45 per cent) of OEMs currently do not offer any connected services and only 13 per cent are monetising connected services to their benefit. The report titled ‘Next Destination: Software — How automotive OEMs can harness the potential of software-driven transformation’ states that half of OEMs (51 per cent) expect to be known for providing software features like advanced driver-assistance systems (ADAS), self-driving, connectivity and services as much as their automotive engineering excellence in the next five to ten years.
In addition, on average, the share of new vehicles per OEM to operate on a unified, common software platform is expected to rise from 7 per cent in 2021 to 35 per cent in 2031. But, according to the report, maturity in key areas remains low. Most OEMs (71 per cent) are at the initial stages of their software-driven transformation, having only identified application areas.
Just 28 per cent have implemented a pilot or proof of concept based on use cases for advancing transformation in specific areas. The research finds that only 15 per cent of OEMs are considered ‘frontrunners’ in successfully transforming themselves by exhibiting the maturity to implement software-driven transformation.
The report said success requires a special set of skills and capabilities backed with the vision to deliver the transformation and the command on operational areas to deliver strong outcomes. Frontrunner OEMs believe that software-based revenue will account for 28 per cent of their overall revenue by 2031.
Capgemini conducted a primary online survey of 572 senior executives working for automotive OEMs across the globe as well as a series of in-depth interviews with 17 industry experts covering various aspects of the software-driven transformation. (ANI)