Challenges of the Traditional Automobile Industry and Digital Transformation: What Georgian Consumers Need to Know

The automobile industry is undergoing significant changes, which directly affect not only global markets but also local ones, such as Georgia. Traditional car manufacturers like Toyota and Volkswagen are now competing with companies such as Chinese startups, which are emerging as leaders in digital transformation. Against this backdrop, the future of the automobile industry largely depends on the development of digital services and software, which represents a significant challenge for traditional manufacturers.

Today, software is one of the most critical components of a car, determining both safety and user experience. Top global automakers, including Toyota and Volkswagen, are working to develop digital services, but compared to new startups, they are lagging behind. Tesla and Chinese companies such as BYD and Nio are leaders in digital innovation, giving them a significant advantage in this regard.

According to a study by Gartner, Chinese startups and Tesla are leading in the digital transformation index, demonstrating that they are not only evolving rapidly but also better engaging with consumers. Traditional manufacturers like Toyota and Volkswagen are trying to maintain their positions, but the software gap they face presents a major challenge.

For car manufacturers, digital services and software are a crucial future revenue source. It is forecast that by 2040, more than half of automakers’ revenue will come from digital services and software. These services include things like automatic updates, insurance management, service scheduling, and many others that will simplify consumers’ lives.

One of Volvo Cars’ technology leaders notes that manufacturers must quickly learn how to manage and develop software. Otherwise, they risk falling behind technological progress and losing their competitive edge in the market.

Traditional car manufacturers like Volkswagen and Toyota face many difficulties in the path of digital transformation. For years, they have relied on the development of mechanical and electronic components, but they lack sufficient experience in the software domain, which directly affects the competitiveness of their new products.

However, this process also creates significant opportunities. Traditional manufacturers are realizing that digital transformation is essential, and they have already started hiring software specialists and increasing their technological potential. For them, it is important not only to develop the physical components of the vehicle but also to offer the best digital experience to the customer.

For Georgian consumers, it is important to understand that digital services and software are already a significant factor in choosing a car, and they will continue to play an important role in the future. New models equipped with digital services and software updates will offer consumers a safer, more comfortable, and personalized experience. Therefore, for those who want a modern and technologically advanced car, it is important to pay attention not only to the car’s technical specifications but also to its digital capabilities.

Digital transformation and software also affect the price of the vehicle. Manufacturers are offering digital services to provide higher-quality services, which, in turn, increases the price of the car. However, these additional services provide consumers with a much more tailored and flexible experience, enhancing their daily use of the vehicle.

The automobile industry is on the path of digital transformation, and this process could change the face of the entire industry. Traditional car manufacturers are trying to overcome technological lag, but they need to adapt quickly to remain competitive. For Georgian consumers, it is essential to pay attention to a car’s digital services, as they determine not only the vehicle’s quality but also the overall customer experience. Digital transformation is the future, and only those companies that are ready for it will succeed in the modern market.

Source: ft.com