Understanding the automotive industry. Key trends and challenges

Explore how these developments shape the future of automotive manufacturing and how MakoLab adds value to the automotive industry and management systems.

The history of the automotive industry began in the 1860s with the development of self-propelled vehicles. The turning point came in 1886 when Karl Benz created the first true car powered by an internal combustion engine, one of the most important inventions in modern history.

In 1908, Henry Ford revolutionised motor vehicle production by introducing the assembly line. This innovation significantly reduced production costs and made cars more affordable to the general public. The assembly line not only sped up the production process but also laid the foundation for mass production techniques that are still used today.

As the industry evolved, so did vehicle technology. In 1912, Cadillac introduced electric ignition starters to its vehicles, replacing hand cranks, and improving both safety and driver convenience. The 1950s brought further innovations, such as power steering and air conditioning, transforming the driving experience into a more comfortable one.

The combination of technological progress and consumer demands has driven the continuous evolution of vehicles. Today, the automotive industry is focused on the development of connected car technology. MakoLab has created a PoC for a German OEM, which involved the use of IoT technology to integrate a car with a home.

In the automotive industry, safety — including protection against accidents, road hazards, vehicle damage, or accident-related bodily injury — has always been a priority. The concept of safety is a critical aspect of motor vehicle manufacturing. Over the years, numerous standards and regulations have been established to ensure that vehicles meet stringent safety requirements.

One of the most important safety standards is ISO 26262 which is considered a best practice in automotive safety. This standard helps car manufacturers comply with various regulations by ensuring that vehicles are designed with safety in mind. Today, modern cars are equipped with advanced safety features such as autonomous emergency braking and driver monitoring systems – these are essential to meet updated regulatory requirements.

Despite significant progress, the automotive industry still faces challenges related to product recalls. For example, in non-compliance with safety regulations. This situation makes designing and implementing services in the automotive industry extremely risky and can be associated with significant consequences.

The automotive industry is a major sector that influences countless business decisions and drives the development of digital solutions. In recent years, one of the biggest developments has been the transition to electric vehicles (EVs). In 2023, approximately 14 million electric vehicles were sold globally, with a significant portion of this number being electric cars. This shift towards zero-emission technology is not only a response to concerns about the environment and climate change but also a reflection of changing consumer preferences and regulations.

The EV market is expected to grow exponentially, reaching an estimated $8.8 trillion by 2030, with passenger EVs accounting for 80% of the market share. However, despite growing EV sales, EV adoption faces two challenges: high production costs and insufficient charging infrastructure.

Technological advancements are at the heart of the automotive industry’s transformation. The shift towards electric vehicles is projected to create numerous job opportunities in manufacturing, infrastructure, and digital solutions related to vehicle energy integration. Self-driving vehicles, although still in the early stages of development, are expected to see rapid advancements in the coming years.

The integration of original equipment manufacturer (OEM)-based AI chips will enhance vehicle features like cruise control and autonomous driving. The advanced driver assistance systems (ADAS) market is anticipated to grow significantly, reaching a valuation of $131 billion. Additionally, the automotive AI market is projected to grow at a compound annual growth rate (CAGR) of 39.8% since 2019, potentially reaching $15.9 billion by 2027.

The development of connected cars by General Motors in 1996 marked the beginning of integrating technology into vehicle communication. These innovations are not only improving vehicle performance and safety but also reshaping the future of transportation.

Effective data management is crucial in the automotive industry, minimising potential errors and creating a foundation of relevant data for important business decisions. Companies must invest in data management solutions to meet regulatory compliance requirements such as GDPR and CCPA and to protect organizational data security from losses and thefts.

Data management systems, including databases, data lakes, data management platforms, and data warehouses, accommodate both structured and unstructured data, allowing for comprehensive data capture handling. Ensuring data quality involves good governance and proper data management processes, with techniques like data models enhancing automation and insights. Additionally, data management technologies play a crucial role in optimizing these systems.

Improved data visibility enhances productivity and allows for comprehensive monitoring of raw data health. In today’s digital economy, effective data management is not just an operational necessity but a strategic advantage that enables organizations to analyze data efficiently and access data efficiently.

Artificial intelligence can be incredibly useful in data management and improving vehicle performance – this has to do with real-time insight into various aspects of a vehicle’s performance. By constantly monitoring and analyzing sensor data, AI can detect inefficiencies and suggest changes to improve fuel economy, engine performance, and overall vehicle response.

We know that driving safety is important – you can learn about the app we created to support drivers at every journey stage.

For example, machine learning algorithms can analyze driving patterns and environmental conditions. In addition, AI can predict component wear, enabling timely maintenance that keeps the vehicle in top condition.

AI-based predictive maintenance solutions are significantly changing the automotive industry, thanks to early analysis of the vehicle condition to see if the machine needs repair earlier. This allows to detect faults at an earlier stage, before they lead to serious problems. AI algorithms analyze data from various vehicle sensors and can predict the probability of failure. This allows timely intervention, which can prevent failures and reduce maintenance costs.

In addition, predictive maintenance supports more efficient use of resources – vehicles can signal when repairs or maintenance are needed. This improves driver safety.

Improving the customer experience is a key benefit of AI applications in automotive data management. AI-based insights enable automotive companies to offer customers personalized and optimized experiences. For example, AI can analyze driving habits and preferences to adjust in-car settings such as seating position, climate control, and entertainment options, creating a more comfortable and enjoyable ride.

In addition, AI can make customer service faster and more efficient by automating routine queries and providing immediate responses via chatbots and virtual assistants.

The future of the automotive industry is and will continue to be shaped by emerging technologies such as artificial intelligence and machine learning. In 2020, Google’s self-driving car, Waymo, made its first driverless run on public roads, demonstrating a significant advancement in autonomous driving technology.

Certainly, the issue of security and the update of the ISO/SAE 21434 standard, which deals with cybersecurity in automotive systems, will be particularly strongly developed. This action will certainly be necessary to ensure that the integration of new technologies does not affect vehicle safety.

The automotive industry is a dynamic and rapidly evolving sector, characterised by continuous innovation and adaptation. From its humble beginnings with self-powered vehicles to the current advancements in electric and autonomous vehicles, the industry has come a long way. Key trends such as the shift towards electric vehicles, the implementation of stringent safety standards, and the adoption of advanced data management practices are shaping the future of the industry.

What are the major changes in the evolution of the automotive industry?

Some of the most important events in the automotive world include Karl Benz's automobile in 1886, Ford's introduction of the assembly line in 1908, the introduction of electric ignition starters in 1912, and innovations in power steering and air conditioning in the 1950s. These events have significantly shaped modern automotive production and technology.

Why are safety standards and regulations important in the automotive industry?

Safety standards and regulations are essential in the automotive industry as they protect consumers from potential risks and enhance vehicle safety. By ensuring compliance with legal requirements, these standards also reduce the likelihood of product recalls.

How is the shift towards electric vehicles impacting the automotive industry?

The shift towards electric vehicles is profoundly reshaping the automotive industry by fostering market growth, developing new infrastructure, and accelerating the adoption of zero-emission technologies. This transformation aligns with evolving consumer preferences and increasing regulatory demands for sustainability.

What environmental challenges does the automotive industry face?

The automotive industry is challenged by high water consumption, contamination risks, and the urgent need to reduce carbon emissions. To address these issues, companies are focusing on recycling water, adopting alternative fuels, and transitioning to electric vehicles.

What are the future trends in the automotive industry?

The future of the automotive industry is set to revolutionize with advancements in autonomous driving, the integration of artificial intelligence, and new safety standards like ISO/SAE 21434. These innovations will significantly improve vehicle performance, safety, and efficiency.

1. IEA. International Energy Agency, Global EV Outlook 2024. Moving towards increased affordability
2. ISO, Road vehicles — Cybersecurity engineering, ISO/SAE 21434:2021
3. ISO, Road vehicles — Functional safety. Part 1: Vocabulary, ISO 26262-1:2018
4. Wikipedia, Driver monitoring system