The demand for technologies using IoT is increasing in the automotive industry because consumers prefer contactless and digitally connected vehicles.
FREMONT, CA: At the socio-economic and psychological level, Covid-19 has contributed to a profound damaging influence that leads to a lot of confusion and fear of the unknown in humanity. Financial losses have become viral, affecting global markets, affecting business services and manufacturing industries due to supply chain disruption, particularly in the automotive manufacturing sector.
Working from home, globally to cluster lockdowns, and social distancing has become part of the 'New Normal' as Covid-19 is infectious and transmitting by human touch. The modern age communications must be contactless and more digitally connected, driven by innovation and developments in technology.
Rise of IoT
The global effect of COVID-19 on the Internet of Things (IoT) market size is estimated to rise from USD 150 billion in 2019 to USD 243 billion by 2021, with a CAGR of 13.7 percent over the forecast period. The growing emphasis on remote monitoring of work from home, increasing adoption of smart payment technology with e-Wallets in mobile phones instead of credit cards to reduce human interaction, and the demand for wearable devices are the key factors driving the market growth.
There is even an increase in investments in digital technology by auto manufacturers during Covid-19 itself. Post Covid-19, they would be forced to invest in full automation, contributing to the rapid growth of smart factories, smart fleets, smart assets and connected staff.
New Business Models in the Auto Industry
Modern and redefined business and commercial models in the automotive industry will also emerge. During Covid-19, the ride-sharing and car rental industry were most affected. During business hours and separation of co-passenger, frequent disinfection will become an essential part of commutation business.
Technologies with vehicle assurance capabilities using IoT technology will also be incorporated by the auto finance, leasing, aftersales market, and insurance sector. Financiers and insurers may choose finance connected vehicles that can generate daily vehicle usage data, driver behavior and vehicle condition and determine EMIs and premiums.
Covid-19 has altered the magnitude of digitalization needed to operate a business. This time, IoT would disrupt the entire value chain in the automotive industry and not just the production units. It will drive advanced departmental automation, breaking silos around functions, turn manufacturing shop floors into the supply chain to an asset, and fleet management.