By Henry Manzano, CEO for Latin America at Tata Consultancy Services (TCS)
Forget that dream of having a Herbie, the turbocharged beetle, as the auto industry is undergoing a new revolution with the development of smart cars. In the not too distant future, the Internet of Things (IoT) will change the model of vehicles that we know today. It is already possible to find such innovative features in car panels that cars are more than means of transportation and become true wheeled computers. A recent study by the Tata Consultancy Service (TCS) shows that only in 2015 will each company in the automotive sector invest an average of US $ 93.5 million in IoT projects worldwide and this number could rise to US $ 102 million by 2018.
That old difficulty of parking in a tight spot is becoming outdated because, nowadays, the car can do it alone. This was an idea, unimaginable a few years ago, but it is already a reality and it is the first step towards the development of fully autonomous vehicles.
Major technology companies develop prototypes and test fully autonomous cars, which are capable of driving alone, without the need for a driver. These automobiles offer total security and work with detection camera technologies that allow the car to identify what is happening around it, and with installed technologies and programs that help it assess the situation and act correctly.
There is much expectation that by 2030, vehicles will already be circulating on the streets and guiding passengers with full technological functioning. A survey by Automotive Industry Solutions (IHS) predicts that the number of 'connected cars' will jump from 23 million in 2014 to more than 150 million in 2020.
The automotive industry is basically investing in three main sources of IoT revenue: infotainment (information and entertainment) inside cars such as streaming services, interaction and real personal assistants who know their agenda, monitoring vehicle performance (cars capable of doing the diagnosis itself in the event of a defect) and driver safety assistants (such as vehicle monitoring and driving cameras). Increasingly, many of these features will be available on the market and countless projects are currently being tested and developed.
In the midst of all this change, automotive companies have not yet reaped huge revenue gains. The companies recorded an average revenue increase of 9.9% from their Internet of Things initiatives in 2014 over 2013, and project a relatively modest increase of 12.3% between 2015 and 2018, according to a study by TCS.
There is still a long way to go and auto companies need to invest in factors that will bring success to IoT projects. An important bias to be taken into account in the industry is that companies need to stop thinking just like car factories and start seeing themselves as software companies.
In the current scenario, many technology companies intend to invest and grab a big slice of this cake that used to have few names. If major players in the automotive sector do not invest in integrated and revolutionary projects with new designs, they will lose a lot of space. For it is innovation that will generate new business and revenue opportunities.
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