Each year brings new predictions of the future. These predictions include what to expect, what will happen, and which technologies will power the expectations.

While these predictions are always interesting to consider, they should be kept in the context of reality to have value for automotive manufacturers. With a rapidly evolving landscape, this industry is producers are under intense pressure to innovate while radically shifting business models to address new challenges meet changing requirements.

Let’s review the most relevant trends, some thoughts on how they will impact manufacturing and the use of data, and what automotive manufacturers can do to lean into these trends with technology.

A Changing Mobility Landscape

Traditional automotive production was rigid and volume-based. However, advanced technology is moving us toward a more connected society and marketplace. According to McKinsey, how people move will increasingly impact auto manufacturers.

In addition to traditional vehicle ownership, companies will need to be able to accommodate mobility expectations that have arisen with new competition from players like Google and Apple, as well as service-based companies such as Uber. With deep roots in connectivity and user experience, the only answer for traditional automakers is to embrace smart manufacturing. At the base, this means continuing to manufacture under ever-increasing pressure for greater fuel efficiency, lower costs, and more customization.

Manufacturers must leverage data to build automobiles that meet the rapidly changing demand to add in new features and services. It also means considering partnerships within the newly emerging connected ecosystem, partnerships for which data analytics is essential.

Increasing Digitization

As the decade progresses, the core capability of automotive manufacturers will need to be centered around flexibility. Gone are the days of long production runs with limited changes. Companies must be flexible and agile to address the mobility landscape, a complex regulatory environment, electric vehicle demand, and natural growth over time.

This flexibility will require shorter runs, more features, increased customization, and more. And it will demand even greater efficiency, lower material costs, and shorter lead times compared to the past. These challenges can only be resolved with a robust smart manufacturing platform and connected factories.

There is hope that industry leaders are making progress on these requirements. According to The State of Smart Manufacturing: Automotive report, minimizing costs and improving quality are cited by 43% and 42% of decision-makers as catalysts for their digital transformation. However, a significant number also recognize consumer and market pressure as key drivers, as 36% cite rapidly changing consumer behavior. Another 32% believe agility, adaptability, and the need to keep up with rapidly changing markets are crucial.

The Dual Roles of Technology and Production

As the world’s technology outside advances, customers want and expect new capabilities to be included in product offerings. This multi-layered approach means that industry leaders must look at their enterprise as much as a technology company as a manufacturing company.

The chance to participate in this new reality will mean partnerships that would not have been possible many years ago. It will also introduce opportunities for new technology-based proprietary services for products. And once again, this new blend of technology and production can only be accomplished with smart manufacturing. Real-time data and analytics, diagnostics, user experience, and user behavior will be integrated to advance and improve these products, and changes will be immediately available on the production floor.

The Smart Manufacturing Imperative

While the discussion above is centered on trends, they are reality-based and already underway. Manufacturers must dive deep into a smarter platform with the capability, functionality, and bandwidth to manage the data and analysis to understand these things and quickly translate them into agile and flexible production. It’s the only way to provide balance and stability during the high-wire act we call modern manufacturing.

Discover more industry trends relevant to your operations in this special automotive edition of The State of Smart Manufacturing report.