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Tech in the Automotive Industry

Per Mike Hawes, Chief Executive of The Society of Motor Manufacturers and Traders (SMMT), the UK automotive industry has enjoyed unprecedented success in recent years. Car manufacturing is now at its highest level since 2005, exports are stronger than ever and the UK can boast an increasingly competitive supply chain, with cars built in Britain holding over 15% more UK content than five years ago.

Indeed, the automotive industry is a vital part of the UK economy, accounting for more than £71.6 billion in revenue, with some 169,000 people employed directly in manufacturing and 814,000 across the wider automotive industry.

The sector is, however, on the cusp of dramatic change. Technology is creating a host of opportunities which allow for new innovations and the development of cleaner, more efficient and safer vehicles. The rapid development of the digital economy is changing consumer expectations and old business models are being adapted, changed and even scrapped.

Image credit: shutterstock/chombosan

To remain competitive in today’s tech phenomena, the automotive industry must adapt to growing trends. In their research, private number plate specialists, click4reg.co.uk analysed the report: ‘The Digitalisation of the UK Automotive Industry’ and found the digitalisation of manufacturing is playing a critical role in this change – and it is down to the government to assist for it to fully succeed.

 

The Benefits

Digitalisation can help manufacturers save time, reduce costs and respond more effectively to consumer demand. By fully embracing the concept, the automotive sector stands to gain £6.9 billion every year by 2035. The cumulative total benefit to the UK economy is expected to reach £74 billion.

Considered one of the most important areas for the sector, digitalisation in automation is thought to be of benefit in several ways:

  • Forecasting accuracy improvement (80%)
  • Increase in productivity of technical disciplines (30-50%)
  • Reduction in machine downtime (20-35%)

Further qualitative benefits include; greater personalisation of vehicles, the ability to design safer products and provide additional services to the customer, the improvement of health and safety of employees and the replacement of mundane tasks with more interesting work.

However, most companies are yet to implement advanced digital technologies in their manufacturing operations.

Currently, the technology most used in operational processes is real-time predictive data analytics and the least used is data from connected vehicles. The slow uptake may signify that – though advancement is happening – the UK holds a lower rate of digitalisation compared to other countries, such as Germany and the US.

 

Digital Challenges

Industry participants highlighted many challenges to the implementation of their digitalisation plans. The most cited challenge is a lack of knowledge (25%) and digital capability within their organisation (22%.) Funding (22%) was also a prime issue – alongside general concern regarding cyber-attacks and intellectual property theft, regarding the loss of crucial, sensitive data.

Elie Fakhoury, MD of Click4Reg comments:

“Though perhaps a daunting notion – the UK automotive industry cannot escape the prospect of digitalisation; in 2017, it is an unstoppable force of manmade nature. However, it can certainly stand to be supported by government and specialists in the field.

Countries such as Germany and the US already have well-established programmes between industry and government, hence delivering a shared objective of digitalisation. Perhaps, this is something we can learn from. The UK must not be left behind."

Interestingly, many industry respondents feel that the government should focus on providing financial incentives, to promote digital manufacturing technologies and innovation, above any other action (40%.) To amend health and safety regulation to allow for the effective use of technologies came as a secondary interest, at 15% and to provide incentives for the development of digital skills specifically came third (12%.)

Evidently, the digital challenges felt and acknowledged by those in the industry could be curtailed with the addition of strong support.

Backing this, John Leech – head of automotive for KPMG in the UK – notes:

“The UK is ready to capitalise on the digitalisation of manufacturing. We have the most productive automotive factories in Europe, a diverse range of manufacturers, fantastic real-time predictive analytics capability in the motorsport sector and game developers already collaborating with industry. What we lack however is a fully co-ordinated, government-led digital strategy.”

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