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2015 Automotive News World Congress

Karen Newman @newmank99America's Automotive Industry Leader IBM Global Business ServicesAutomotive 2025: Industry without BordersEngage with consumers, embrace mobility, exploit the ecosystem

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About the study250+ hours of meaningful discussion about the future of the industry

China

Japan

Europe

North America

Rest of world

By region

OEMs

Analysts

New entrants

Distribution chain

Suppliers

By industry segment

175 executives

21 countries

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Industry without bordersFuture requirements are shattering historically rigid boundaries

of OEM executives rated mobility services as a significant area for co-creation with consumers

of all executives rated collaboration with other industries as the best opportunity for industry growth as we progress toward 2025

of all executives rated expect non-traditional industry participants to have a key role in the automotive ecosystem by 2025

73%

73%

75%

The enterprises that welcome this open and collaborative approach to transforming the business will set the stage for success

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External influencersForces shaping the auto industry will radically shift by 2025

Auto 2020 Study: 2008 & 2020Auto 2025 Study: 2014 & 2025Green – increaseBlue – decrease

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Three primary disruptors are causing industry boundaries to blur and even disappear

External Factors

Expect digital engagement and experiences

Can be compelled to co-create products and strategy

Taps into intelligent vehicle capabilities

Creates new offerings via consumer-driven requirements

Enables new paths to enterprise growth

Creates new opportunities to collaborate within and outside traditional industry borders

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Greater expectations of co-creationIndustry executives expect more collaboration with the consumer

Power of the crowd

•Desire of consumers to influence

•The power of many

•Thinking out of the box

•Encourages innovation and new ideas

•Not constrained by corporate culture

Mobility Services

Product Design

Marketing Campaigns

Service/Aftersales

Sales programs

Vehicle Assembly

To a large extent

Consumers

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There will be different crowds for different situationsMultiple systems of engagement will be required to support the different groups

Mobility services

Marketingcampaigns

Sales

Other areas

Sales/ Aftersales

ProductDevelopment

AutomotiveEnterprises

Systems of engagement must be easy, intuitive and provide a great experience to the consumer

Consumers

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Self-enabling vehicles will provide a greater personalized experienceIntelligent and Intuitive enough to take care occupants and itself

8

Self-configuringPersonalization and

customization to environment

Self-learningCognitively adapting performance

to occupants and environment

Self-healingAnalytics and prognostics for service and maintenance

Self-socializingVehicle social networks to assist others, utilizing the vehicle for ancillary tasks

Self-integratingSeamless digital integration

Self-drivingAutomated and eventually autonomous mobility

Mobility

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What vehicle innovations will become commonplace by 2025?

In-vehicle cognitive learning

Vehicle digital persona interchange

Within a brand – 78%

Within an automaker – 62%

Between automakers –

26%

Partially – 84%

Highly – 55%

Fully – 19%

Limited – 38%

Fully – 8%

Automated Autonomous

74%

Social networks for vehicles

57%

Mobility

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SignificantCollaborating with

other industriesCreating new services-

based offerings

Leveraging disruptive technologies outside the vehicle

Investing in new business models

Creating new product categories

Forming new JV/alliances/partnerships

Entering new markets

Targeting new customer segments

Percentage change from Auto 2020

34%

13%

20%

-12%

-6%

-37%

7%

-13%

A significant shift in where industry growth will come fromBringing more value by extending beyond traditional boundaries

Eco-system

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Significant

Retail channels

Marketing & sales

Product development

Research

Aftermarket

Supply chain

Manufacturing

OEMs Suppliers

73% 65%

65% 55%

44% 63%

61% 47%

40% 59%

38% 60%

16% 44%

Ecosystem disruptionOEMs and suppliers disagree on where the significant disruption will occur

Eco-system

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While one third of the companies overall feel they will adapt to the challenges of 2025, only one in five feel they are prepared now

Companies who feel they are prepared for 2025

Companies who feel they will be able to adapt

Prepared

Adaptable

Suppliers (13%)

OEMs (23%)

OEMs (30%)

Suppliers (33%)

The pace of change is no longer controlled by this industry

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