Business Intelligence in the Automotive Industry
Business intelligence has played a critical role in the evolution of the automotive industry. Insight and data are crucial in any industry, but when it comes to the manufacturing and selling of cars, having accurate, real-time data can be the difference between success and failure.
The stakes are high, especially in auto manufacturing, where one mistake can have major repercussions, from retooling factories and recalling entire fleets of vehicles to changing distributor agreements. For this reason, business intelligence is far from a luxury or “bonus” in the automotive industry. As we see it, it’s a necessity.
Business intelligence in the automotive industry can benefit all aspects of the supply chain. From car manufacturers to component suppliers to dealers, business intelligence allows all parties to leverage key data about their customers, vehicles, and parts, resulting in a more efficient experience for all involved.
What Is Business Intelligence?
Business intelligence in the automotive industry involves the harnessing of key data to benefit all aspects of the supply chain. In fact, some say that business intelligence is facilitating the growth of the automotive industry owing to the improvements and efficiencies it provides. Such improvements range from decreasing vehicle repair costs and improving vehicle safety to boosting car sales and streamlining the online shopping process.
Data analytics has the power to reshape the auto industry, owing to the invaluable information it provides. For example, business intelligence can help automakers manage production lines and help car dealerships build customer trust and loyalty. Using real-time data, the sales agents at a dealership can identify sales priorities, improve customer engagement and satisfaction, and ultimately, increase sales. Other examples of invaluable data include tracking team performance and the lead sources that generate the most sales and mining portfolio data for new sales opportunities at a dealership. Real-time customer data can also help dealerships and auto manufacturers determine sales and inventory priorities.
Why Data is Important in the Automotive Industry
Data offers invaluable insights to everyone in the automotive industry, from auto manufacturers to car dealerships. Using these insights can help transform the way vehicles are made and sold, making the assembly line more efficient and vehicles safer to drive. On the flip side, leveraging such data can allow car dealerships to expand their customer base and boost sales. In fact, business intelligence has the power to profoundly change the retail sector by allowing both dealerships and manufacturers to connect with customers 24/7.
How is Data Analytics Used in the Automotive Industry
Customers, dealers, and auto manufacturers have much to gain from the collection and analysis of data in the automotive industry. For example, data use can result in serious cost savings for vehicle manufacturers. In the past, when automakers discovered a systemic issue in one of their fleets, such as a component failing more often than it should, they were forced to issue a recall. However, without clear data, the automaker typically ended up recalling far more vehicles than were affected by the issue and is therefore necessary. What data companies and business intelligence platforms offer is the ability to leverage individual vehicle data to predict component failure risk. Thus, for the first time, auto manufacturers can only recall the vehicles that are at an actual increased risk of failure. Some estimate that this number could end up being as little as 10 or 20 percent of the fleet that was initially suspected of needing to be recalled. Through the use of data analytics, car manufacturers have the potential to save billions of dollars each year.
Another example of how data analytics can be used in the automotive industry relates to early anomaly detection and root cause analysis taken from vehicle sensor data. In the past, it has taken years for manufacturers to detect systemic issues like component failures, as mentioned above. This is due to a lack of aggregated data, which prevents automakers from identifying quality concerns until it’s too late. However, now that vehicles are equipped with sensors and these sensors regularly send updates to manufacturers (updates about everything from fuel consumption and emissions to speed, resource consumption, and safety information), it’s possible to detect anomalies quicker and more accurately. The result? Making changes to the assembly line right away. This invaluable data also provides key insights to auto engineers and manufacturers as to why certain components or systems fail. Even more, the uses for data analytics extend beyond the automotive industry. Vehicle sensor data can even be used to solve urban issues like traffic congestion or to address environmental problems relating to emissions.
Overall, data analytics has the power to change the automotive industry as we know it. By collecting and analyzing data on millions of vehicles, failures can be predicted, saving automakers millions of dollars in recalls, helping to make vehicles safer for consumers, and ultimately transforming the fields of product development and quality assurance. Further, if harnessed correctly, business intelligence can benefit car dealerships by providing invaluable insights into customer bases, team performance, and sales leads.