Automotive

capgemini research institute

The road to softwarization

Measuring the digital value shift in automotive

The rise of smart vehicles, autonomous cars, and generative AI has put software in the driver’s seat for the automotive industry – shifting how automotive companies view the entire value chain, and what connected mobility means for the customer experience.

Our report, The art of software: The new route to value creation across industries, explores how organizations are adapting their businesses for software-driven transformation, and how companies can overcome challenges to take advantage of new revenue streams, more efficient operations, and better customer experiences.

What does that mean for the automotive industry?

1. The future of automotive will be driven by software

Nearly one-in-four automotive companies believe they already operate as a software company today. Close to fifty percent believe they will be a software company in the next three-to-five years. Automotive leaders anticipate that generative AI will play a growing role in how code is created within their organizations.

76%

of auto organizations believe software is critical to their future product and service strategies.

Automotive leaders predict that

37%

of code will be created with assistance from generative AI in the next three years.

Percent of organizations agreeing with the statements below

2. Early investment in software gives companies a head start

As the focus on software grows, so does anticipated share of revenue. Automotive companies are already seeing benefits from early investments in software products and services. These benefits come in the form of new revenue streams, faster R&D, and the ability to provide improved customer experiences – all important ways to maintain a competitive edge in the market.

...with companies seeing benefits across the value chain

90%
New revenue streams based on software-defined products
74%
Faster R&D for existing products and services
61%
Competitive advantages (ex. increase in market share)
61%
Improved customer experiences

3. Accelerating software transformation starts with strategy

These early wins are promising but, according to our research, a majority of auto companies are only in the early stages of software-driven transformation. Sixty-nine percent of automotive companies fall into the “experimentation” stage – meaning they have identified specific use cases or have implemented a pilot program for one product or service to start. Only 43 percent of automotive companies say they have a comprehensive software-driven transformation strategy currently in place.

Maturity of software-driven transformation in products/services

Experimentation phase

Identifying roadblocks

When it comes to transformation initiatives, automotive companies face common challenges across the enterprise.

Data-driven
processes

39%

say they continuously collect customer data throughout the customer lifecycle.

Leadership
support

56%

say leadership challenges are a barrier to software transformation.

Fostering
collaboration

51%

see a lack of collaborative culture across product and service teams.

Planning for a sustainable future

26%

measure the environmental impact of their software development.

Addressing talent
gaps

63%

cite talent gaps in AI, ML, and deep learning.

Becoming a software-driven organization

Software-driven transformation requires automotive companies to redesign their business models, software organization,
and engineering processes.

At Capgemini, we’ve identified six key pillars organizations should follow to achieve a successful software transformation – combining strategy, design, operations, sustainability, and technology to drive the automotive industry forward.

Download The art of software: The new route to value creation across industries to learn more about our approach,
and how organizations can achieve software-driven transformation.

Download report