The global automotive industry is going through tough times characterized by large vehicle inventories, slower growth, and plant shutdown announcements. Can the latest advancements in Generative AI technologies help the automotive industry to recover and sail through given tough time? Anil Pathak Global off-board (Cloud, AI/ML) Practice Leader at HARMAN Automotive Engineering Services shares his views.
The Global Automotive Industry is going through tough times in terms of large vehicle inventory backlog, economic slowdown, supply chain restrictions, unrest in Europe and the list goes on. To survive these challenges, there is a need to focus on innovation, cost optimization, customer delight, new revenue models, better ROI and more. There are CASE (Connected, Autonomous, Shared and Electric) mega trends and on top of this Generative AI (Gen AI) is another trend which is impacting various industries and Automotive industry is no exception. There is lot of euphoria around Gen AI, and we need to see if this can function as panacea of Automotive industry problems.
Gen AI Impact on Automotive Industry – Software Development: As per Mackensy report, majority of the value (75%) generated by Gen AI can be categorized into four areas as software development, customer support operations, product marketing and sales, and research & development (figure). No doubt, automotive Industry can take benefits in all these four areas. As the automotive industry is getting more fueled by software due to Software Defined Vehicle (SDV), latest E/E (Electrical/Electronic) architecture, IOT, Digital Twin like technologies, it makes sense to take best use of Gen AI fueled Co-Pilots for software engineering. There are number of co-pilots available in market namely as Microsoft Co-Pilot, GitHub Co-Pilot and more. These co-pilots can help in software engineering and increase productivity. As per McKinsey article software engineers can complete coding tasks up to twice as fast with generative AI. Given Productivity improvement can be categorized into four categories documenting code functionality for maintainability, writing new code, code refactoring and high-complexity tasks. These tasks have decreasing order of productivity improvement ranging from 50% to 10%, respectively. Given productivity improvements would not only help improve OEM’s EBITA but also help the automotive industry to focus on providing more valuable features to end customers. SDV trend along with Gen AI productivity improvements in software development would have resonance & synergistic effects. While the SDV approach would help increase the top line by opening additional revenue streams in terms of subscription-based features, Gen AI-based productivity improvement would help improve the bottom line.
Apart from this, a few copilots made by Tier-1 and Software houses are available in the Microsoft, and AWS marketplace. OEMs can take the help of these co-pilots or partner with Tier-1s to assist themselves in this productivity improvement journey of Gen AI.
Gen AI Impact on Automotive Industry – Customer Support Operations: Gen AI can help Automotive Industry OEMs in Automotive customer support operations by offering personalized experiences based on customer’s preferences & context, voice assistant, chatbots, multilingual support, pro-active maintenance, predictive customer behavior and more. Features like Predictive Maintenance can help increase customer satisfaction and in turn brand loyalty. Gen AI can offer tremendous productivity improvement due to the repeated nature of tasks associated with customer support operations.
Gen AI Impact on Automotive Industry – Marketing & Sales: In Automotive Marketing & Sales, Gen AI can help in targeted market campaigns, personalized recommendations, extending virtual showrooms & experiences, and offering customizable services & offerings. The sentiment analysis feature offered by Gen AI can help in accurately predicting customer sentiments. Timely & accurately working on these may help to have better insights of customer’s behavior and in turn help in increasing sales & revenue.
Gen AI Impact on Automotive Industry – Research & Development: In research & development, Gen AI can help in design explorations, virtual prototyping, material innovation, 3D printing and more. Gen AI can help leaders to focus more on innovation in R&D by saving their time, energy & focus from repeated tasks, which can be automated with the help of Gen AI.
Gen AI Impact on Automotive Industry – Consolidation: It would not be incorrect to predict that there may be consolidation in Automotive Industry by M&A (merger & acquisition) to survive in given tough times. We have already witnessed the same as recently two major OEMs (Honda and Nissan) have agreed for full scale talks for potential merger. Gen AI usage can come handy as an assistant to help given merger talks in terms of due diligence, valuation, predictive modeling, and risk assessment. This would not only help improve the productivity but increase the chances of success of given mergers.
Challenges: Apart from numerous benefits Gen AI offers, there are many challenges to be taken into consideration in terms of Data Privacy, Data Security, Ethical biases, transparency, infrastructure cost, liability, regulations, IP (Intellectual Property) ownership issues.
Increase Adoption Rate: To ensure that Automotive Industry takes benefits of Gen AI, it needs to increase the adoption of the same by fostering the required culture, focus on trainings and coaching in terms of Gen AI usage, skills, risk management & control. A structured approach needs to be followed spanning, training, coaching and risk control & management to get the best output from Gen AI adoption.
Conclusion: In summary, Gen AI has potential to help Automotive Industry to focus on its core strengths, but it cannot be just single dose panacea.
Adoption of AI needs to be done in a very balanced way after taking into consideration various challenges, risks, and ethical aspects. If this is done in a value & risk balanced approach, Automotive OEMs can capture the benefits in terms of increased revenue, reduced costs, improved time to market, better customer focus, better brand loyalty, quality, and innovation.
With this we can say Gen AI would help Automotive Industry in solving its current challenges. But would it be a panacea? Time would tell.
References:
- The economic potential of generative AI – Report by McKinsey June 2023
- Unleashing developer productivity with generative AI. June 27, 2023, | Article Mackensy
Disclaimer: The views expressed by the author are his own and do not necessarily reflect the views of FMM magazine.

Anil Pathak
Global off-board (Cloud, AI/ML) Practice Leader
HARMAN Automotive Engineering Services