Internet of Things (IoT) in Automotive Industry


On the road of digital revolution that will transform the automotive industry

With connectivity and smart devices becoming a norm in automobiles, the manufacturers in this sector are upping their game with suite of technologies such as Internet of Things (IoT), Big Data Analysis and Artificial Intelligence (AI) to tap the potential business benefits that come in with this digital revolution. As per Business Insider (BI) report, 381 million connected cars will be on the road by 2020, up from 36 million in 2015. Furthermore, BI Intelligence forecasts that connected cars will generate $8.1 trillion between 2015 and 2020. These figures indicate that IoT and related digitalization technologies will lead in a fundamental shift in the world of mobility.

Anand Bhade

A look on the trends in industrial IoT that are expected to take centre stage in the year 2017:

Connected Cars: The automotive industry is going through a disruptive change, moving into the era of all-encompassing connectivity, mobility, integration, and immersive experience. First and foremost, connectivity decisions are an important factor in determining the value proposition and the supporting business model for connected car services. There is an increasing demand for connected mobility, supported by the ongoing digital revolution. This is opening the door to new services and a wide range of customer experience intelligence. According to a 2016 Gartner report, the production of new automobiles equipped with data connectivity, either through a built-in communications module or by a tether to a mobile device, is forecast to reach 12.4 million in 2016 and increase to 61 million in 2020.

The future of connected cars will include increasing mobile data associativity and integration. Mobile devices will become control devices to operate connected car features. Autonomous driving will become the norm. Data will flow from smart mobile devices, to smart connected cars and smart cities and infrastructure. Laws and regulations will police how data is managed, who owns what is collected from the connected cars, how driving or not-driving is regulated, etc.

Connected vehicles hold immense potential to not only generate new products and innovations, but also lead to the creation of new companies and business models. It can rightfully be called the foundation for central opportunities and disruption in the automotive industry.

Telecommunications Technology: Automakers and software providers alike are pouring in R&D investments into self-driving technologies. Prototype self-driving vehicles are already on the road. As technology precludes human drivers, new interior designs for automobiles will create space and opportunity for passengers to enjoy greater productivity and personalization of experiences. This transformation is looked upon as a predecessor for enormous business benefits.  Morgan Stanley expects full automation by 2022, creating $1.3 trillion in value in the United States alone.

In terms of connectivity, smart cars can be powered by the 2G, 3G and 4G/LTE technologies. While being the most prevalent technology for couple of years, 2G is now being replaced by 4G/LTE that is to be applied in some of the most sophisticated connected cars by 2020- thanks to the continuous improvement in the speed and reliability of telecom networks. Integrated connectivity solutions are also growing increasingly popular for establishing IoT for cars, as embedded connectivity takes a backseat. Self-driving cars require multiple connected technologies to work-GPS technologies to support navigation and routing, sensors including radar, high-powered cameras, sonar, and lasers that create and communicate a continuous, three-dimensional, omnidirectional view of a vehicle’s surroundings, sophisticated software that analyses this information, including artificial intelligence that allows for self-learning capabilities, and technologies that translate the information collected and processed into action, including accelerating, braking, and steering.

Peer-to-Peer Communication: Peer-to-Peer (P2P) networking refers to the technology that enables two or more peers to collaborate spontaneously in an overlay network by using appropriate information and communication systems without the necessity for a central coordination. A P2P overlay network is a robust, distributed and fault-tolerant network architecture for sharing resources like CPU, memory and files.

Machine-to-Machine (M2M), or more accurately, vehicle-to-vehicle (V2V) communication will become an integral feature of connected cars by 2020. With navigation and speed information being broadcasted across cars, the chances of accidents should go down significantly. What’s more, notifications can be generated to intimate people about approaching cars. Timely V2V warnings can make driving a lot safer.

Building in Upgradability: With the shorter lifecycles of electronic software and hardware, consumers increasingly expect that their cars will seamlessly accommodate the latest gadgets and automatically update them whenever needed. Today, the technology exists to update a vehicle’s features by delivering a software upgrade over the air, but this system requires the vehicle to have processing and memory capabilities that can accommodate for scaling, to prevent the vehicle from becoming obsolete. Given the rate of technology development, this can pose a real challenge. With these challenges in mind, carmakers are discovering new ways to reduce overall product costs, shorten time to market, build in greater flexibility, and distinguish their vehicles in an era in which software is fast becoming as key differentiator as body design and fuel economy.

Indeed, several automakers have begun redesigning the product-development process by focusing on standard components and technology. The ratio of standard components will increase, reducing the product development process per car (for example, time to market) and decreasing production costs. Automakers are also working to increase production flexibility and more efficiently leverage production capacities. Virtual car development, integrated production planning, data integration, and extensive data analysis will also further restructure the process.

Vehicle-to-Everything Communications (V2X): For several years, players debated whether to create systems around embedded or brought-in technology and services, and that debate drove the scope of the connected-car ecosystem and the struggles over value capture. The last couple of years, however, have seen the development of a hybrid model that combines the two and opens the door to the introduction of a host of applications and opportunities for value capture. High-tech innovation from outside the automotive world is flowing into it, making the current period one of intense activity and excitement, with many new entrants, start-ups, VC investments, and M&A movements. At the heart of these hybrid solutions are multiple sensors embedded not only in the vehicle itself but in all manner of smart devices across the IoT landscape, from wearables and Dedicated Short-Range Communications devices to smart-home gadgets to infrastructure, that can communicate with and share data with the vehicle through what is being called V2X integration.

As IoT technologies and services transform the automobile, the ecosystem is witnessing a steady inflow of new players and the continued evolution of the roles of key stakeholders and the balance of power among them. Of particular interest is the evolving relationship between automakers and software providers. Each has a viable claim on the driver’s seat in the rapidly changing auto-industry ecosystem, even as each new generation of services promises to throw into question just how long whoever might have their hands on the wheel can keep them there.

By: Mr Anand Bhade- President of Asia Pacific Sales, Tata Technologies