The technology, media and telecommunications (TMT) sector is rapidly disrupting traditional ways of making and selling products across all sectors, including in the automotive industry, where technological advancement is radically influencing the way in which vehicles are manufactured and sold as well as the technology that is built-in, says advisory firm Deloitte Africa automotive leader Karthi Pillay.
In its sixteenth edition of ‘TMT Predictions’, released last month, Deloitte Africa predicts that machine-learning capabilities – currently most familiar in smartphone technology – will continue to gain prominence across all industries. This trend is apparent in the automotive sector, where extensive research and testing are being conducted into driverless or autonomous vehicles.
Pillay points out that basic driver-assist technology – such as assisted parking functions and automatic braking systems – is already a reality in many cars that are available today. “I believe that the car of the future will be shared, driverless electronic vehicles – it is only a matter of time before this becomes a common feature of society.”
He points out that regions such as the US, Europe and China are likely to be the international leaders in this trend, with other countries taking slightly longer to implement the technology. He also notes that the introduction of such vehicles will not result in traditional vehicles immediately being phased out.
However, Pillay stresses that such advancements are not “science fiction dreams”, but a soon-to-be-realised reality, with many major manufacturers in the automotive industry already investing heavily in testing driverless vehicles.
“Other automotive-related services, such as mobile applications, are also gaining momentum, for example, those that allow for parking to be prearranged and paid for or those that facilitate vehicle hiring,” says Deloitte Africa automotive senior chief of staff Adheesh Ori.
He adds that private transport provider Uber is also piloting a driverless fleet in Pittsburgh, in the US, and fuel cell technology is getting a lot of attention in the United Arab Emirates.
“These examples clearly demonstrate how the automotive market and its needs are changing as a result of the influence of technology and the Internet of Things.”
This year, Deloitte will release the results of a global consumer study conducted to investigate consumers’ responses to driverless vehicles. Pillay highlights that, while some consumers may initially be wary of this development, Generation Y consumers are educating themselves on technological advances in this area and will be likely to lead the market in the uptake of these vehicles.
He notes that the new generation of vehicle consumers prioritises ‘green’ emissions-reducing technology and is embracing the idea of sharing vehicles. Unlike previous generations, these consumers place less emphasis on owning a vehicle, but rather on convenience and value for money – a trend clearly evidenced in the global popularity of Uber, for example.
“Consumers are considering the cost of owning a vehicle – and all the ongoing maintenance, fuel and insurance costs – and its being unused in a parking lot for the majority of the average working day, and comparing it with sharing vehicles as a far more cost-effective alternative. “As technology advances, it thus has an integral effect on consumer purchasing patterns.”
South Africa’s Role
With seven of the world’s leading automotive manufacturers present in South Africa – assembling, manufacturing and selling in the region – Pillay points out that the country is potentially well positioned to take advantage of developments in the international automotive industry.
However, partnerships between government and the private sector will be instrumental in embracing these advances, with infrastructure – such as parking – and regulatory and policy changes needed to allow for the fluid integration of driverless vehicles, he notes.
Pillay suggests that a key strategy will be the creation of a “future of mobility” think-tank, comprising an advisory body like Deloitte, universities, original-equipment manufacturers and government, that works to decide whether South Africa will be a trendsetter or a trend follower when implementing driverless technology.
“With South Africa’s history in the automotive industry, the significant governmental support that the industry is garnering and its access to international automotive intelligence, owing to the presence of key manufacturers locally, the country’s role in the future of mobility is definitely worth considering.”
He stresses that because South Africa’s automotive industry is still relatively small, compared with mass producers like China and the US, it is crucial that it takes heed of developments and identifies a niche that it could potentially lead in.
“It’s a do-or-die environment and we have to look for ways to remain relevant in the automotive industry as it moves forward,” Pillay concludes.