Adapting Automotive Distributor Networks for the Electric and Autonomous Future
Prabu Kaliyaperumal, Asst. Manager – Supply Chain, Galadari Automotive Group
In conversation with Prisila, Correspondent, Asia Business Outlook Magazine. Prabu discusses his perspective on how industry frontrunners intend to adjust their distribution strategies in response to the surge of electric vehicles and advancements in autonomous driving technology.
Adapting Distributor Strategies for the Electric Vehicle and Autonomous Driving Revolution
Around five years ago, the introduction of electric vehicles (EVs) marked a significant shift in the automotive industry. The initial skepticism and concerns about their capabilities, particularly in Middle Eastern markets with extreme temperatures and varying road conditions, gradually gave way to optimism. Government initiatives aimed at electrification bolstered this trend, resulting in a remarkable 30% surge in EV sales last year. The public's attitude transformed from cautious to hopeful, with many now considering hybrid or electric options for their next vehicle purchase.
This transition was not limited to personal vehicles alone; the commercial sector witnessed notable strides too. Giants like Amazon announced plans to deploy 100,000 electric vehicles globally by 2030, signaling a growing trend in commercial EV adoption. In the UAE, Unilever's adoption of electric delivery Vehicle which is first of kind in UAE and In Aug'2023 Dubai RTA introduced free ride on electric bus in selected routes boosts the sustainability initiative by the government . Furthermore, the development of autonomous vehicles, reaching level three autonomy, promises to revolutionize transportation, although road infrastructure remains a key challenge.
However, this evolution poses challenges for distributors. The traditional after-sales revenue stream is threatened in an EV-dominated landscape, where minimal repairs and replacements are needed. Despite these challenges, distributors must embrace technological advancements. This entails investment in upskilling teams to comprehend technologies like machine learning, artificial intelligence, and cloud-based ERP tools. Distributors, especially medium and small-scale ones, may need to consider 3PL or 4PL options instead of massive infrastructure investments. Developing a roadmap towards 2040, aligning with the net-zero vision, can guide distributors' strategies.
The pace of technological change is rapid, altering vehicle models annually with advanced features such as ADAS, advanced sensors, IoT, cloud computing softwares, digital electronics, ALNS and so on. Such changes shift the focus from spare parts to upskilling teams in predictive analysis and deep learning. As technology continues to reshape the automotive landscape, distributors must remain adaptable and prepared for the challenges and opportunities that lie ahead.
The automotive landscape is swiftly moving towards autonomy, currently at level three where driver attention is required, but level four and five pose challenges to traditional Distribution networks, on the others hand with upcoming online showrooms and sales
Anticipating Game-Changing Innovations for Automotive Distributors: Navigating Future Tech Impact and Preparedness
In the past, vehicle launches mainly focused on Exterior body changes, with limited powertrain updates. However, there's been a recent surge in electronic components in vehicles. This poses challenges for planners and inventory controllers when customers report problems, as identifying complex electronic issues causes delays, impacting customer service. The rise of electronics isn't limited to luxury models; mid-range cars now feature lane assistance, radars, and navigation systems, raising repair costs when glitches occur. The future holds even more advanced technology, like BMW's I Vision Dee with augmented reality displays replacing windshields and customizable exteriors.
The automotive landscape is swiftly moving towards autonomy, currently at level three where driver attention is required, but level four and five pose challenges to traditional distributors. These changes create uncertainty for distributors who must adapt to EVs, advanced tech, and sustainability concerns. Adapting to evolving consumer preferences and technology is vital for distributors to succeed in this transforming industry.
Revolutionizing Inventory Management and Supply Chain Efficiency through AI and Data Analytics Integration
In the rapidly evolving landscape, AI is poised to revolutionize supply chain operations. Predictive analytics, fueled by big data from sensor-equipped vehicles, will optimize inventory, enhance forecasting accuracy, and streamline logistics. Automated ordering patterns and AI-driven maintenance schedules in electric vehicles will reshape traditional paradigms. Integration of GPS and 5G technologies promises efficient tracking and planning, augmenting customer satisfaction. However, this transformation demands vigilant data privacy measures to safeguard sensitive information shared among customers, fleet operators, and governments. Embracing this data-driven culture, professionals must adapt their skills to the AI era, as the supply chain embraces a new frontier marked by unparalleled efficiency and innovation.
Approaches to Integrating EV Charging Infrastructure in Distributor Networks
Navigating infrastructure challenges remains a complex endeavor for distributors in the evolving EV landscape. While not OEMs themselves, distributors must approach infrastructure cautiously. The scarcity of proprietary charging stations had been evident, with only Tesla offering such facilities. However, a notable shift occurred in January 2023 when major OEMs including Mercedes-Benz, GM, Stellantis, Honda, Hyundai, Kia, and BMW collectively invested $1 billion in building 30,000 EV chargers across North America. Mercedes aims to unveil its first EV stations by Q4 2023, with plans to access over 12,000 Tesla Superchargers in North America from early 2024. This convergence towards common charging standards is promising, yet maintaining brand identity and quality remains pivotal. Distributors contemplate establishing their charging points, albeit at a cost, catering to showroom visitors and service clients, integrated into third-party applications for accessibility. Despite the investment challenges, customer demand and strategic support fuel these distributor-led initiatives.
"The pace of technological change is rapid, altering vehicle models annually with advanced Features driving towards Industry 4.0 such as ADAS, advanced sensors, IoT, cloud computing Softwares, digital electronics and so on"
Revamping Distributor Network to Match Growing Electric Vehicle and Autonomous Technology Trends
The drive towards autonomous vehicles and enhanced safety measures, while crucial for humanity, has led to an unfortunate business decline, with a reported 10% drop due to safety initiatives. As the landscape shifts towards electrification and autonomy, spare parts categorization needs an overhaul. While mechanical powertrain parts diminish, electronic and electrical components surge, demanding warehouse restructuring and specialized storage for miniature sensor-laden parts. The transition also brings sustainability challenges, as e-waste replaces conventional scrap, necessitating investment in proper waste management. This technological revolution demands skilled personnel proficient in AI, machine learning, and deep learning algorithms. Despite the complexities, the evolution toward electric vehicles with extended ranges promises progress, urging us to embrace the changes ahead.