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The alphabet soup describing the technology that is shaping the auto industry, including AI, (Artificial Intelligence) – VR/AR, (Virtual Reality/Artificial Reality) – HMI, (Human Machine Interface) – UX, (user Experience) – IoT, (Internet Of Things) and Blockchain, aren’t as confusing as they first appear.  Acronyms associated with digital marketing, such as SEO – SEM and PPC, caused a similar panic for the technology challenged just a few short sales cycles ago.  They all describe changing technology governed by human nature and are defined by the universal problems they solve.

The basic problem solved by the auto industry, and the technology that supports it, isn’t all that complicated.  People, goods and services need to be transported from A to B for a variety of reasons and the auto industry satisfies that need.  The complication is that the reasons are constantly changing and technology must predict those changes or suffer the consequences.

Employees that used to drive to work can now operate more efficiently from a home office linked to an online network of co-workers.  Driving to your local Shopping Mall has been replaced with online same day delivery from retailers that don’t have to pass on the cost of expensive real estate and utilities to display their merchandise.  Simply put, the free market place will always accommodate consumer demand to provide the least expensive and most convenient way to deliver goods and services and the auto industry must govern itself accordingly.

The retail auto industry is already changing to meet consumers online with websites that allow a consumer to purchase a vehicle and accept delivery without having to meet a salesperson or visit a dealership.  That is not to suggest that salespeople or brick and mortar dealerships won’t have a place in the auto industry.  It does however suggest that their role in the sales and service experience must change as technology provides efficiencies to better serve the consumer.

The OEM’s must also recognize that the use of personal vehicles will require radical changes in the products they provide.  More cost efficient fuels, such as electric vehicles and other power sources yet to be announced, are already in production to accommodate government regulations.  Demand for autonomous vehicles and the growing acceptance of subscription transportation services including Uber, Lyft and other forms of transportation fleets are already impacting demand for new vehicles as consumers question the need for a personal vehicle and the associated expenses.

These issues must be addressed by the auto industry before they reach critical mass.  That is where the alphabet soup of next generation technology comes in and Artificial Intelligence, (AI), is probably the best place to start.  It is an integral element powering many other next generation technologies and its true potential has yet to be realized.

AI solves a diverse variety of problems across all sectors of the auto industry centered around the need to efficiently accumulate and process data.  The evolution of AI isn’t complete.  Its’ present application is primarily in Machine Learning that is dependent on algorithms designed to replicate human interactions and decisions.  The learning curve for AI is its Achilles heel as applications require extensive data pools to accumulate enough real world experiences to define and apply a usable pattern in the decision processes that it is designed to control.

The evolution of AI into Artificial General Intelligence, (AGI), and Artificial Super Intelligence, (ASI), is inevitable as hardware and software matures exponentially to improve the efficiency of Artificial Intelligence beyond that of the human intelligence that created it.  Once AGI is achieved it will power technology in ways yet to be imagined.  It will not only shape the auto industry but society as we now know it.

Many technology vendors have prematurely added AI to their title and solutions before their data and algorithms have matured enough to be effective.  As a result they have misrepresented its’ true potential to shape the auto industry on all levels.  Vendors that have applied functional AI to their solutions already exist and their ability to disrupt the verticals that they service is apparent.

InterActiveTel is an example of an SAAS vendor that provides functional AI powered telephony software and integrated hardware that solves a universal problem for the auto industry.  The auto industry suffers with antiquated telephony technology with analytical capabilities that are not as vast as online resources.  They typically provide minimal metrics & KPI’s as dealers are overwhelmed with call volume -150 unit dealership averages 20,000 calls per month – that is time consuming to monitor and cost prohibitive to manage.

The following statistics support the need for more efficient ways to process inbound phone calls:

  • 32% of incoming calls never connect with an associate
  • 7% hang up when placed on hold – 8% leave voicemail
  • 8% hang up when transferred to voicemail
  • 10% hang up because nobody was available to help
  • Only 10% of calls are captured
  • Only 15% of sales calls are tracked

All of these missed opportunities evidence that there is no understanding of interactions and they indicate limited accountability to solve the problems they represent. InterActiveTel’s AI powered software addresses all of these issues:

  • Track every call in and out of the dealership
  • Convert a conversation to text and then analyze the data
  • Track and confirm Sales appointments
  • Monitor and manage missed opportunities
  • Track make and model trends
  • Determine customer sentiment
  • Quantify advertising effectiveness
  • Analyze service opportunities & trends
  • Evaluate employee performance
  • Monitor all phone conversations in real-time
  • Alert managers on key interactions in near real-time
  • Store collected data for trend analysis

Their solution is even more disruptive since their software incorporates the ability to:

  • Understand the content of the conversation
  • Respond to the intent of the customer
  • Evaluate and improve the skills of the sales associate
  • Positively impact the outcome of an interaction
  • Provide insights from the consumer’s perspective
  • Map the consumers desired experience
  • Shed light on sales performance
  • Accumulate prospective sales
  • Measure conversion

AI powered SAAS providers like InterActiveTel will accelerate competition in Telephony and other vendor offerings to solve similar deficiencies in the telephone dependent sales and service processes of the retail auto industry.  VR/AR is another next generation technology that will impact both the retail and manufacturing sector.

Brick and Mortar Auto Dealerships are competing with their own online showrooms.  Online shoppers have access to information in more detail than any salesperson can hope to deliver. VR/AR solutions positioned on the showroom floor and service lane can even the playing field between the real world auto dealership sales and service process and virtual online experience.

Flowfound is a technology vendor that offers custom 360 / VR videos for websites, social, e-mail and mobile devices that deliver stunning test drives focused on safety, performance and features that entice customers to take physical test drives and further engage with auto dealer’s online showrooms.  They also bring their VR magic to the brick and mortar dealership with custom kiosks that can be placed in either the sales showroom or service lane.  They are designed to enhance the information intensive portion of sales and service presentations while providing the “Wow” factor that will differentiate them from the competition.

The Flowfound kiosks are equally at home at Sports Arenas, Shopping Malls and anyplace people gather where auto dealerships might want to reach out and share the driving experience of their vehicles through Virtual Reality vs. a sales presentation.  In addition, collecting data through VR devices is a science of its’ own as heat maps track eye movements throughout the experience and monitored interactions by the user build a profile of consumer preferences.

The OEMs are focused on many new technologies that are changing their product offerings including – Human Machine Interface, (HMI), User Experience, (UX) and Internet of Things, (IoT).  Luxoft is an example of a leading independent software service provider for automotive OEMs and suppliers.  They develop high-end automotive software solutions across user experience design, human-machine interface, advanced driver assistance systems (ADAS), autonomous driving, connectivity, Internet of Things, telematics and navigation.

Digitalization is changing mobility and transforming the car experience. In particular, the cockpit provides entirely new ways to differentiate and physically interact with the car brand. Their solutions and services bridge the gap between designers and developers, enable new technologies and leverage Open Source Software in a unique way that represents the vehicles of tomorrow.

There are more cars on the road than ever before, more regulations for carmakers to work to and greater expectations from owners for innovations in their vehicles. To meet these demands, automotive manufacturers find themselves in a constant race to equip their cars with the most advanced technologies – to make motorists safer, keep them always online, and make them better informed and more comfortable in their driving and in their stay on board.

In September 2016, Luxoft launched the second generation of AllView, an advanced automotive technology demonstrator, which can be experienced at a variety of exhibitions, conferences and sales events.  AllView is a UX Design concept demonstrator that showcases new technologies that are shaping the user experience for in-vehicle HMI systems and connected services.

AllView is powered amongst others by Luxoft’s Populus HMI engine, which offers advanced HMI design opportunities and supports all available operating systems and automotive HMI architectures for target hardware implementations.  The Digital Cluster puts the focus on driving information and can detect the driver’s visual attention through eye tracking to put emphasis on whatever is most important or relevant. This system can display important vehicle or traffic information alongside or over current music selection, or social media message previews.

Within the In-Vehicle Infotainment (IVI) system the user can seamlessly move between different functions through a concise and user-friendly interface that lets drivers access the functions they want with minimal distraction from the road. Comprehensive and multi-faceted, the IVI includes:

  • The Driver Monitoring and Eye-Tracking system uses an advanced HMI operation principle based on the very latest in eye-tracking technology, processing the direction of the driver’s sight to determine which information is most important to them. On driver observation, content can be operated as well as enlarged to bring it into clearer view.
  • Their Natural Language Voice system is fully integrated, with advanced understanding capabilities of natural language to pick up a wide range of voice tones and accents.
  • Agile Messaging Co-Pilot: an award winning concept featuring voice output of messages, a privacy mode to block incoming messages from the view of everyone in the car, and message management that withholds messages during demanding driving situations.
  • Navigation: an up-to-date 3D layout displayed on a screen for enhanced visibility
  • Autonomous Driving Mode: demonstrates how the transition between manual and autonomous driving mode might be implemented in the future.
  • Climate control: independent temperature and airflow control that’s zoned for each passenger and for different parts of the body.

Last but not least in the technology revolution changing the auto industry is the introduction of blockchain with many yet to be discovered applications.  A blockchain, originally block chain, is a continuously growing list of records, called blocks, which are linked and secured using cryptography. … It is “an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way”.

To understand how Blockchain is used in real world applications it must be differentiated from its’ most recognized application – Crypto Currency.  In the language of cryptocurrency, a block is a record of new transactions (that could mean the location of cryptocurrency, or medical data, or even voting records). Once each block is completed it’s added to the chain, creating a chain of blocks: a blockchain.

Because cryptocurrencies are encrypted, processing any transactions means solving complicated math problems (these problems become more difficult as the blockchain grows). People who solve these equations are rewarded with cryptocurrency in a process called “mining.”

If you own any cryptocurrency, what you really have is the private key (basically just a long password) to its address on the blockchain. With this key you can withdraw currency to spend, but if you lose the key there’s no way to get your money back. Each account also has a public key, which lets other people send cryptocurrency to your account.  It’s decentralized, meaning it doesn’t rely on a single computer or server to function.

It would also help to know that Blockchain exists in three separate categories – Public, Private and Consortium.

Public blockchains:

A public blockchain has absolutely no access restrictions. Anyone with an internet connection can send transactions to it as well as become a validator (i.e., participate in the execution of a consensus protocol).   Usually, such networks offer economic incentives for those who secure them and utilize some type of a Proof of Stake or Proof of Work algorithm. Some of the largest, most known public blockchains are Bitcoin and Ethereum.

Private blockchains

A private blockchain is permissioned.   One cannot join it unless invited by the network administrators. Participant and validator access is restricted.  This type of blockchain can be considered a middle-ground for companies that are interested in the blockchain technology in general but are not comfortable with a level of control offered by public networks. Typically, they seek to incorporate blockchain into their accounting and record-keeping procedures without sacrificing autonomy and running the risk of exposing sensitive data to the public internet.

Consortium blockchains

A consortium blockchain is often said to be semi-decentralized. It, too, is permissioned but instead of a single organization controlling it, a number of companies might each operate a node on such a network. The administrators of a consortium chain restrict users’ reading rights as they see fit and only allow a limited set of trusted nodes to execute a consensus protocol.

VinChain is a perfect example of how blockchain is being applied to the auto industry.  The problem addressed by VINchain exists in any open marketplace where one party (the sellers) know significantly more about the product than the other party (the buyers). This is also known as “markets with asymmetric information”.

The used car market is an example of this. When selling a car, the seller typically knows significantly more about the vehicle than the buyer. This is a problem for the buyer as it opens them up to potential fraud. To hedge against the risk of buying a so-called ‘bad’ car, they reduce the price they’re willing to pay for the vehicle. This could lead to the entire used car market to disappear.

A survey conducted among market participants indicated a need for access to reliable, secure, and transparent historic operational vehicle data.  The VINchain project fills this need and solves the problem of asymmetrical information in the used car market by creating a decentralized, immutable, transparent, secure, and reliable vehicle lifecycle repository.

VINchain is a decentralized blockchain database that records all relevant information pertaining to vehicles. For each vehicle, a blockchain passport is issued which will be stored in a distributed registry. VINchain is also capable of producing reports that can be ordered immediately by buyers, sellers, and other market participants. Information about the vehicle is accumulated in the databases of all system participants (manufacturers, insurance companies, service stations, banks and leasing companies, dealers, etc.) during the entire period of its use.

The blockchain-passport of the vehicle is connected to the vehicle identification number (VIN) and placed in the VINchain blockchain system. This information is transparent and accessible to everyone with access to the system. To protect the accuracy of information, the blockchain technology and data hashing through the SHA-256 cryptographic algorithm (sha 2 family) is used. This guarantees reliability and security of data.

Every day hundreds of thousands of used cars are sold around the world, and each buyer wants reliable information about the technical condition of the car. This is an important safety, security, and financial issue. Unfortunately, there is no single database of vehicles. Though there are commercial databases, they do not solve this problem as their information is stored centrally and there is a risk of inaccuracy. Commercial databases are closed and do not exchange information. As a result, the buyer of the car risks their own safety and financial loss. The VINchain project plans to attract international consulting agencies to the system audit, which will produce a detailed report of the reliability of the information provided by VINchain

The mechanics of the VINchain system work as follows: -A request for data is received -The entire chain is searched for relevant data -Reports are created and provided in a structured form -Members of the relevant registry receives a fee for providing information – Buyers and sellers of used vehicles will both benefit from the removal of information asymmetry on the used car market.

Knowing all of the information available on a given vehicle will create trust in the process and the buyer will potentially be willing to pay more. For the seller, disclosing the complete history of the vehicle may increase the value of the car at the time of sale. If buyers know the full operational history of the vehicle, they have a guarantee that the vehicle retains a certain level of value. The same cannot be said about a vehicle with no report.

This concept can be demonstrated with the following example: A buyer has to choose between two identical vehicles: one with a full operational history report, and one without. In this scenario, the buyer is likely to choose the vehicle with the full operational report over the other even in cases that the report indicates past damage and/or repairs. This is due to the report providing an accurate reflection of the vehicle’s history

Every market participant has the right to know the true history of a vehicle being sold. The VINchain project will fill this niche to the benefit of all. In the future, this technology can be scaled to segments of the fixed asset market such as yachts, construction machinery and real estate.

The process can be simply described as follows:

1 Create a block with different levels of access and information protection. Data security access level should meet the needs of government agencies.

2 Unite participants in the automotive industry, such as manufacturers, insurance companies, dealers, service stations, and developers of navigation systems into a single ecosystem for data exchange purposes.

3 Create an infrastructure and provide direct access to the database for each market participant.

VinChain is creating a worldwide decentralized database of vehicle information that is 100% transparent, reliable, and accessible by everyone. This database is blockchain based, which will guarantee that the information in it has not been faked, changed, or deleted.

The blockchain guarantees full transparency and builds trust in the system. Information is captured from country registries, insurance and leasing companies, different partnered services, private registers, paid APIs, and certified members. Information is also captured directly from the vehicle, so the data is live and updated in real time.  Their platform is an open system and anyone can join and benefit from their network. VinChain will provide you with 100% reliable and accurate information about the car you’re going to buy, so you can be absolutely sure that it’s safe to drive!

These next generation technologies are designed to accommodate the demands of consumers to provide efficient market driven solutions to satisfy their transportation needs.  As those needs evolve based on changing demands for employment, shopping and economic pressures to reduce costs these technologies become even more central to providing solutions for each problem.

OEM’s will soon be tasked to design vehicles to accommodate fleet operators offering subscription transportation models to replace private ownership.  These vehicles will likely be modular designs with interchangeable components that can be upgraded wirelessly as new software is developed to improve vehicle performance.  Individual manufacturer branding and designs may have to be sacrificed to support universal inventories with trim levels reduced to basic and luxury and/or private and commercial applications.

All of these anticipated changes will provide opportunities for some and insurmountable challenges for others.  OEMs that recognize the need to change and embrace the role that the alphabet soup of new technology will play in developing new vehicles to satisfy changing consumer demands will flourish.  Those that choose to preserve their “brand” and maintain the status quo of their business model – including the retail auto dealership franchisees that they support – will go the way of many manufacturers before them who didn’t recognize the obvious.  Consumers always have and always will determine the winners and losers in the auto industry.

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