How the internet of things will shape the automotive industry in the future

19 Apr 2018 | Guest blog - Caroline Gorski, Digital Catapult

There are three approaches that really help explain what the Internet of Things (IoT) really is.

The first is a network-led definition of the internet about how you move data around increasingly interconnected networks. What this approach is interested in doing is gaining greater efficiencies for existing processes by expanding the capabilities of those processes to be driven across – and between – new networks. For example, in industrial IoT, putting sensors into manufacturing plants and sharing data that comes from them would be a very network-led process.

Adopting this approach would make the process more visible, efficient or effective. You tend to end up with business models based on efficiency gains – classic examples are producing goods more rapidly or with more customisation.

“The second approach is based on a device-led definition of the IoT that focusses on the ‘Things’ part, rather than the ‘Internet’. It’s inspired by the technological advances that mean you can do new things with the devices.”

The second approach is based on a device-led definition of the IoT that focusses on the ‘Things’ part, rather than the ‘Internet’. It’s inspired by the technological advances that mean you can do new things with the devices. Examples here include sensors operating in new environments to record a broader range of temperatures or humidities, or a greater depth or miniaturisation that allows sensors to be developed for much smaller applications. Those advances create an opportunity for new processes to be dreamt up that wouldn’t have been feasible before.

The third category is the user-experience-led definition of the IoT. It is less interested in trying to make existing processes more efficient, but more interested in the impact that users get from a service and about how IoT services can change the way users experience those services.

From the auto industry, the biggest example is going to be autonomous vehicles, because it makes a huge difference to the experience of vehicle users because it’s a radical change in how people think about how they are transported or how goods are transported.


In device-led definitions, the business models can often talk about new ‘services’ – generally new categories of revenue generation. A classic example is the evolution of the voice-activated home assistant. Who thought 10 years ago that we would have these systems in our homes? That is a whole new category of consumer device, but it is possible thanks to a combination of the processing power that reduces development and then the AI that sits in the back end.

Implications of interconnected networks will mainly impact on the physical environment in which any number of vehicles interact with street furniture, buildings or sensor signals from intelligent traffic management systems. There is such an enormous scope of data interaction and relevance in the IoT world for autonomous vehicles. That is not a challenge that most car manufacturers are going to be well placed to try and address on their own, or even within their industry.

An automotive industrial player operating in an IoT context is going to have to form partnerships across an ecosystem. Regardless of the complex supply chains they run now, they are going to need to form new partnerships with those who are far outside the world in which they currently operate.

Servitization might be a challenge to the automotive industry in the near future because instead of buying a car, consumers might just want access to a car. For that to happen realistically, there has to be the same kind of capabilities to allow car manufacturers – or another service providers in the value chain – to make that ‘power by the hour’ option viable.


The user experience is all about data. The devices, network and sensors are all important, but what makes a difference from a user experience is how well, contextually, data about the experience is understood. Whether the customers are those who would previously have been driving a vehicle, or just people who experience vehicles being driven around them, it is a whole new category of thinking for automotive manufacturers.

Looking at the network-led process improvement applications there clearly are potential bene ts in increasing the number of connections within the automotive manufacturing supply chain. With a more connected set of suppliers, OEMs can o set risk or increase speed in the supply chain.

There are manufacturers well placed to make these changes – one good example being MINI, which has a high degree of exibility and adaptability at the factory. Elsewhere McLaren has used IoT sensors to radically improve the performance of its race vehicles – all of that massive scale data about how a racecar performs is essential, but even for regular vehicle design or wind tunnel work, those are all elements that can help to greatly improve the development of products.

For others IoT o ers the potential to change all aspects of their business from design through manufacturing to sales and then from the use phase into recycling and re- use. Understanding how best to apply both the technologies and the new business models that it brings will be a key
to success in delivering the transport solutions of the future.