How can AI based solution help the growth of the automotive market?
Today the automotive Middle East market is facing 2 big challenges. If we look at the dynamics of recent years in the automotive market, the consulting agencies agree that the hard times, from the point of view of sales, is still ongoing, but nearing completion. Frost & Sullivan notes, 2016 was difficult for sellers across virtually all countries in the Gulf Cooperation Council as double-digit declines in new vehicle sales, overstocking of parts by distributors and a lack of clarity for the near future all weighed on the market. And this feeling only continued into the first half of 2017 when many hoped the worst was over.
Another challenge for the market is changing consumer behavior. Today, people increasingly prefer the rent of the car and car-sharing, without the buying a car. The Car Rental Market in the Middle East will continue to grow at a considerable rate in the coming years. Due to the market research report by Ken Research, over the past five years from 2010–2015, the car rental industry in the Middle East has posted an average annual growth rate of 2.8% in revenues. And the fleet size of car rental market in the region is expected to reach around 400K by 2020.
All of those challenges enforce the market players to change. OEMs, NSC, and dealerships reduce the cost of traditional marketing for the redistributing investments in online marketing. At the same time, they begin to look at new technologies like connected car solutions and test more innovative solutions with machine learning and artificial intelligence features, because this solutions give them opportunity to tackle 2 main points: OEM’s challenge in the use of date and the need to become stronger in customer retention and the dilemma of resources inside the dealership.
Traditionally automotive industry manually collects telematics data about their customers and process it in an offline state. But processing this data is time and resource consuming and actioning it is even harder and sometimes biased. Today with even more and more data being collected from Connected and Autonomous vehicles, Car brands are changing drastically the way they serve their customers. Where the focus of offering services, parts, accessories and even re-purchasing a new car based are based on driver’s behavior. And AI connected car solution is just the best solution to handle all this data in real time. AI Service automates “The best fit” goods and services suggestion to every specific customer through car usage analytics. It helps to avoid human error and increase the sales conversion.
Research of our customers (Bright Box) using the solution based on Artificial Intelligence gives us the following results.
Connected Car platform with remote car control can increase the sales of connected vehicles by 14%. Connected Car services without remote car control can increase the sales of vehicles by 4%. Using the ai services and telematics data Increase the average check for the service by 10%.
Today on the Middle East market, much attention is paid to investments in new telematics technologies, artificial intelligence, and machine learning. We see AI and Machine learning being in the center of many governmental and corporate discussion, but Automotive companies still seem to be bound to the traditional practices and this is defiantly creating more of a challenge to them to tackle today’s market. According to the PWC research, parts of the region have already embraced AI and the new digital age. Analysis conducted by the International Data Corporation (IDC)4 estimates that spending on cognitive and artificial intelligence (AI) systems in the Middle East and Africa (MEA) region will grow from $37.5 million in 2017 to over $100 million by 2021, representing a growth rate of 32% a year. We think that the attendees of the automotive market should start to be active in using of AI features.
