Big Data and the Automotive Industry: The Future Is Here

What a few years ago sounded like science fiction or the whim of a few eccentrics, has now become reality. Vehicles leave the factory equipped with internet connection systems that allow their users to enjoy a safer and more efficient travel experience. The use and processing of the vast amount of data generated by that connectivity, known as big data, has now emerged as a great business opportunity for the automotive industry. According to a 2016 report by the consulting firm McKinsey, the use of data from connected cars could generate a $75 billion business by 2030.

Because of this, there are already many brands that use big data to improve their financial results. Thanks to this data they are able to get a better idea of their customers’ preferences, configuring their vehicles according to their specific requirements.

But what is big data and why is it so important?

When we talk about big data we are referring to “datasets or combinations of datasets whose size (volume), complexity (variability) and speed of growth (speed) makes it difficult to capture, manage, process or analyse using conventional technologies and tools,” as explained on Power Data. Handling such a large volume of information requires specific technology.

Big data makes it possible to create predictive models that can influence extraordinary events, such as predicting a tsunami, for example, as well as other everyday issues, such as knowing ahead of time where the biggest traffic jams will be.

Big data and the automotive industry

The automotive industry is no stranger to the use of big data. The abovementioned McKinsey study from 2016 revealed that consumers themselves were interested in activating data capabilities to make their travel experiences safer and more efficient, and that they were willing to pay for it. Hence the success of applications such as those that allow users to find parking, for example.

The most obvious use that automakers can make of big data is aimed at improving the manufacturing of their products. Knowing when a vehicle’s engine or electrical system fail helps them make the necessary changes to the assembly line to resolve the issue. According to a study by the German institute Fraunhofer IFA, it is estimated that this would allow companies to save between 10% and 20% in maintenance costs, as noted in an article published by Intelligent.

“Now the car lets us know when it is broken and what the causes of the failure are. These failures might even be prevented in the future, when the vehicle is connected to the manufacturer or the garage, with which users can make an appointment. This will be very useful to reduce accidents,” said Marcial Fernández, director of organization, systems and web environment at ICEA, a research association that collaborates with insurance companies, in an industry debate organized by El Mundo and the insurer Direct Seguros in 2017.

Thanks to big data and the feedback left by users on social networks, automotive companies will also find it easier to know what kind of finishes are the most popular, or what type of vehicle is the best-selling, so they can adapt their production on the basis of these variables.

Insurers also benefit from big data. By 2017, 44% of insurance companies had already implemented big data processes to their businesses. This information allows them to know more about how their customers drive, to better adapt their services. It also helps them reduce fraud. Lastly, it provides them with useful information to improve safety, such as data linked to natural disasters and weather conditions.

Advantages for drivers

It is not just automotive companies that can benefit from big data, but also drivers. Apps like Waze collect real-time data about traffic, accidents and other hazards that may arise on the roads thanks to massive collaboration between its users, known as crowdsourcing. Users help other users reach their destinations faster and more safely. This is also the basis of apps that help users find parking.

However, the privacy of users must be taken into account. Jaser Abdel-Kader, the Head of Business Development at Secmotic, argued, in an interview with the Concesur Group, that “the user must take into account that he/she assigns certain data in exchange for high value-added service. The really important thing is that the user is well informed of what data he or she is providing and to what purpose. In this sense, the new European Union Data Protection Regulations (GDPR) will provide citizens with a higher level of control over their personal data”.

On the way to autonomous car

If there is one thing that experts agree on, it is that big data is the mainstay of future autonomous driving. In fact, so-called smart cars are already part of our lives. Cars come equipped with the latest technology, which allows them to be connected to their environment and engage in better interactions to enjoy a more efficient and safe driving experience. “When all cars are connected to each other, no traffic lights will be needed,” said José Angel Alonso, KPMG’s senior manager, at the industry debate organised by El Mundo and Direct Seguros.

An example of this are Google’s and Tesla’s autonomous cars, although they still have a long way to go until they are fully safe and operational. In any case, European official bodies are already preparing legislation on autonomous vehicles. In Spain, the DGT is working on regulations governing the driving of this type of vehicle.

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