DIGITALIZATION IN THE AUTOMOTIVE INDUSTRY

Abstract

Digitalization is disrupting the automotive industry and in particular the established business models of well-known OEMs (Original Equipment Manufacturer). New legislations, technological trends, the omnipresence of digital devices like smartphones and changing customer preferences towards sustainability and mobility on demand have stimulated the digital transformation in the automotive industry. This process affects the entire value chain, from product design and manufacturing to supply chain, marketing and sales. New market players like Tesla, Uber and Blablacar have identified the huge potential of digitalization to create new revenue pools and have already entered the market with their interconnected solutions. Other tech. giants like Apple and Google but also smaller start-ups have started investigations around new mobility solutions. Those new competitors with their high innovation power have one strategic advantage. They do not have to carry the burden of an analogue set-up with its high fix cost structure compared to traditional car manufacturers. Therefore, established car manufacturers are forced to transform their analogue business models to the digital age. This research paper will analyze the prerequisites of a successful digital transformation. Furthermore, it will describe the potential to create business model innovations.