AI is paving the road for the auto industryArtificial intelligence is transforming most industries and the automotive industry is being particularly impacted
Based on a Tractica market intelligence study, the demand for automotive artificial intelligence (AI) hardware, software, and services will surge from ~$400 million in 2016 to ~$14 billion by 2025.
AI systems blend data and advanced algorithms to mimic the cognitive functions of the human mind. These systems are already streamlining and enhancing a broad range of experiences in peoples’ everyday lives.
Given the surge in investment and the sheer size of unlocked potential, it is safe to assume that AI enhancements to buying, owning and driving cars will fundamentally transform the automotive industry in the coming months and years.
Semi-autonomous and fully autonomous vehicles rely heavily on AI systems to guide the dependability of their fail-safe navigation, ultimately earning the trust of drivers and passengers. There have been significant AI-related investments from across the design space for self-driving cars, with contributions from Google, Tesla, Mercedes-Benz and more.
In February 2017, Ford invested $1 billion – Detroit’s biggest investment yet – in the self-driving car startup Argo AI, which was founded by a partnership between two top engineers from Google and Uber.
Elon Musk, Tesla founder, predicts that AI will surpass solely human-based efforts by the year 2030. In a Twitter response to a research paper that hypothesises the human race will be overtaken by AI-equipped robots by 2060, Musk mused, “Probably closer to 2030 to 2040 in my opinion.”
Common perceptions cite but critically underestimate the speed at which machine learning helps data sets refine accuracy and displace user-based error to deliver clean and distraction-free processes safely. People are not having to wait long to experience ML driven improvements in people’s everyday lives. In fact, it’s happening faster than many continue to project.
After decades of computer intelligence development, the technology structure supporting AI development is finally realising its potential. For the first time, those approaching the creation of artificial “general” intelligence that allows machines to successfully perform intellectual-level tasks that could previously only be executed by humans. People can thank modern algorithms for implementing multi-layered intelligence, the technology can action on complex decisions based on advanced-level strategic and tactical considerations.
While self-driving cars and complex decision-making are the primary use for modern AI, the auto industry continues to search for new ways to engage customers through existing and new channels. AI is providing a unique set of tools which will not only better understand customer behavior, but also deliver an optimally personalized auto purchase and finance experience.
Companies can now understand data to discover insights and generate reliably predictive models for their customers, with the help of advanced analytics. The value of machine learning is rooted in its ability to create accurate models that can guide future actions and to rapidly identify patterns at a scale that was not achievable before.
Machine learning methods are particularly applicable to powering new insights within the auto industry because the data sets are large, diverse, and change quickly. Applying machine learning to auto industry data is a game-changer, showing us iterative new connections that were previously unknown and unknowable.
Purchasing a new car can be an emotional and lengthy process for consumers. Car buyers struggle to balance the complex car shopping journey with their need to operate within their current, fixed monthly budget.
According to Experian Automotive, more than 80% of new vehicles sold across the country are either loaned or leased. More than 70% of transacting customers found it challenging to gather financing information before visiting a dealership, which ultimately short-stopped their early purchase-driven research and forced them to change research modes from online to in-person.
Moreover, online calculators available today that offer monthly installment estimates aren’t tailored to customers based on their own highly unique credit histories, leaving both those estimated values and prospective buyers less than confident in their next steps.
The current process for vehicle financing poses challenges for dealers and financial institutions alike. The entire process can unfold over half a workday or more, because many customers who walk into dealerships are unaware of which vehicle they can truly afford; therefore, dealers end up explaining and calculating the best possible deals for multiple car models prior to a customer decision on a single vehicle.
Prospective car buyers typically choose a lender based on dealer recommendations, eliminating other lenders from such prospective buyers to whom they may potentially be able to offer a better match.
Merging a first-class car buying experience with a transparent, customer-friendly financing process is key to powering the next chapter of future-thinking auto purchases. Given the endless selection of cars and finance providers, machine learning has the aptitude to help car buyers quickly find the vehicles and financing options that are right for them, simplifying their customer journey by an order of magnitude from today’s disjointed experience.
AutoGravity’s engineering team leverages AI to offer an exceptional consumer experience while navigating the intricate business ecosystem between lenders, dealers and manufacturers.
It was built to serve car buyers, lenders, and dealerships, using cutting-edge technology to solve problems and deliver an exceptional experience. With the help of emerging technology and analytics, it was able to open new digital channels that assist lenders and dealers attract and acquire new, qualified customers.
The transformation that AI is bringing to the auto industry is exciting – in self-driving cars, but also in fundamentally changing three major blocks of the supply chain: the way people shop, the way that dealerships sell, and the way that lenders finance auto purchases.
AI has opened up the possibilities and has the potential to change many if not all aspects of the auto industry- starting with more intelligent cars and ultimately creating a shorter and frictionless transition from shopping to driving.
Sourced by Martin Prescher, CTO of AutoGravity
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