The automotive industry in transformation – business model disruption

The automotive industry is facing some of the biggest changes ever. Mobility services, autonomous driving, electrification and the shift from a product to a product and service business requires automotive companies to rethink major aspects of how they operate today.

The automotive industry in transformation – business model disruption

Automotive business model disruption

Traditionally automotive original equipment manufacturers (OEMs) generate the majority of their revenue and profits by selling hardware (vehicles) and services that are directly related to the automotive business such as maintenance services. Now most analysts and executives in the automotive industry are convinced that this is going to change and increasing value will be generated in the surrounding ecosystem, and that the traditional business model on hardware has reached its peak.

Read now: Everything you need to know about connected vehicle technology in 2018

The connected ecosystem

So connecting the car is pivotal to enabling the industry’s transformation. It will enable vehicle-to-everything (V2X) communication, intelligent transportation systems (ITS)  and enhanced autonomous use cases, and it unlocks a wealth of new business models around the car like usage based insurance (UBI), in car delivery services, car sharing and many more. The majority of the business innovation will happen outside the OEM, and independent companies will run their business on top of the car platforms that OEMs will operate. Therefore it becomes important for any OEM to develop a strategy to open the car platform in a controlled way and to participate in the business that will happen outside.

Ericsson Connected Vehicle Marketplace

The Connected Vehicle Marketplace, which Ericsson launched at Mobile World Congress in 2017, helps OEMs to pave their way into the connected ecosystem. It allows them to expose data in a controlled way, automate partner onboarding, monetize it and manage consent between the parties.

Here are some reflections on TU-Automotive Europe 2017, the Telematics Update now taking place in Munich…

Telematics Update is always a great platform to meet the industry and to discuss and build alliances towards the future of the connected ecosystem. We are on the second day of the event, and all the presentations and discussions have been inspiring so far. Looking forward to the rest of the event and to seeing you all at my keynote speech at 14.45-15.05 CET, which is entitled “Gear up for the Connected Vehicle Ecosystem”.

To find out more about the Connected Vehicle Ecosystem, click here.

Watch this film for a brief an outline of the Connected Vehicle Marketplace.

The Ericsson Blog

Like what you’re reading? Please sign up for email updates on your favorite topics.

Subscribe now

At the Ericsson Blog, we provide insight to make complex ideas on technology, innovation and business simple.