1. Digital transformation in
the automotive industry
Chinese-German CAR Symposium
April 26th, 2016

2. Copyright © 2016 Accenture All rights reserved. 2
China has now the world’s largest netizen
population and the largest e-commerce market
Value of China’s
online shopping
market at USD 440
billion
440
Online shopping
accounts for 10.7%
of total consumer
goods sales vs. USA
6.6%
10.7%
Social media app.
WeChat has more
than 600 million
active users
600
More than 642
million internet users,
the largest netizen
population worldwide
642
More than 527
million mobile
internet users
527
China’s “Netizens”
spend 25.9 hours
online every week
25.9
440
300
52
Online market volume in 2014
China USA Germany
642
280
72
Netizen population in 2014
China USA Germany
Unit: million
Unit: billion USD
Source: World Bank, United Nations, U.S. Commerce Department, Ministry of Commerce
People’s Republic Of China, National Bureau of Statics of China, CNNIC, Tencent financial report

3. Copyright © 2016 Accenture All rights reserved. 3
With a large population of “always on” consumers,
the digital eco-system is evolving rapidly in China
Cloud solutions provide alternative
service models, e.g. platforms and
applications as a service, enabling
new levels of scalability, flexibility
and responsiveness
Social media and collaboration
technologies in Marketing, CRM or
Sales systems enable relationship
building within and beyond the
organization.
In China there are many social
media channels for different markets
(e.g. food, travel, business, music)
Analytics/
Big Data
How insight
is created
Cloud
How things
are delivered
Social
How things
are discovered
Vehicle on Cloud enables OEMs to
set up an automotive ecosystem at
lower cost of ownership
Analytics within the application
architecture enable generation of
new insights and information,
support of public opinion
monitoring and service optimization
Smart devices, innovative apps and
3G/4G mobile Internet provide
flexibility to shop, read and chat
anywhere at any time
Mobility
How things
are consumedTelematics play a vital role in
connected vehicle services and
enable bi-directional communication
between customers and OEMs
DIGITAL
BUSINESS

4. Copyright © 2016 Accenture All rights reserved. 4
Innovative digital players are reshaping customer
experience and redefining business models
Digital Behaviors New Business Models Derived newer business models

5. Copyright © 2016 Accenture All rights reserved. 5
Digitization is drastically redefining customer
experience management in all key dimensions
1
5
3
6
4
Provide personalized content
based on previous purchased
data
Customer experience,
Digital performance optimization
Convert “Branding” to Sales (Social
identity, authority authorized, group
purchase)
Marketing
platformListen and understand
“online / offline consumers”
Executive insights,
predictive analyticsVender and dealer
2
Capability
CRM – Big Data
Awareness
Browse
Visualization
Advocate
Trust
Purchase
Anonymous
Broadcast
Initiative
Pause
Measurements
Position
Digital marketing,
(SEO/ SEM/ Web pages),
social ads and community
Integration,
development,
innovation
Acquisition
Engagement
Sales
Post-Sales
Commitment

6. Copyright © 2016 Accenture All rights reserved. 6
Changing consumer behavior and competitive
dynamics pose both challenges and opportunities
• User preferences change – customers want digital
services
• Data is the future currency – consumer show willingness
to share
• Industry boundaries are shifting – service providers
establish direct client interaction
• Investment areas: Business Model Innovation and
Product Innovation
• The car as "ultimate mobile device" – new players disrupt
the market place based on service-oriented and data
driven business models

7. Copyright © 2016 Accenture All rights reserved. 7
What will be the next-generation car customers look
like and what do they want?
That kid – the one in
the back of the SUV
with the iPad – is the
automotive industry’s
worst enemy.
(Bloomberg)
“
”

8. Copyright © 2016 Accenture All rights reserved. 8
Fast development of connected car technology and
its new applications have created a new biz platform
1st Generation
2nd Generation
3rd Generation
?
 Open Platform
 USB Jack
 Multimedia Player
Interface
 Web browser
 Wi-Fi
 Text Reader
 Third party partnerships
 Location-based services
 Intelligent POI, family
tracking
 Voice enabled social
networking
 Real time traffic & weather
 On-demand in-vehicle
entertainment
 Mobile app integration
Future
Innovations of
Connected Cars
 Full internet capability
 On-demand in-vehicle
entertainment
 Advanced Driver Assistance
Systems
 Augmented reality
Today…
Tomorrow…
 Safety & Security
 Voice Navigation
 Remote Unlock
 Concierge Services
 Vehicle Diagnostic
 Stolen Vehicle Recovery
 Bluetooth

9. Copyright © 2016 Accenture All rights reserved. 9
Auto companies should consider two strategic
dimensions that unlock value via Digitization
Strategic Options
1) Business as Usual: Manage risks
arising to existing business model(s)
from digital activities of competitors
2) Partial Digitization: Realize EBITDA
opportunities through digitization of
existing value chain
3) New Business Models: Realize
EBITDA opportunities through
development of new revenue streams
enabled by a new value chain
Value Areas
Digital Customer: Apply digital
technology to address customers in a
more sophisticated way to increase
revenues and profitability
Digital Enterprise: Decrease costs of
the existing value chain’s primary
functions (e.g. R&D) as well as support
functions (e.g. HR)
Digital Business: Digitize your current
business model or develop new
business models generating profits
based on digital technology
Digital
Enterprise
Internal Focus
ExternalFocus
Digitize
Operations
Digitize
Customer
Experience
Digital
Customer
Digital
Business
Disrupt
(Sub-)Market(s)
Partial
Digitization
New Business
Models
Business
as Usual
1
2
3

10. Copyright © 2016 Accenture All rights reserved. 10
Digitization of customer experience in the whole
journey of lifecycle management is just taking place
Specific
use
cases
Physical
experience
Targeted
research
(actual
purchase
interest)
Consideration
Purchase
Configuration/
price
negotiation car
& downstream
Waiting
phase
Purchase/sale
Hand-
over
Use and After
Sales process
Sale/new
purchase &
FS retention
General info
gathering
(no immediate
purchasing
interest)
Awareness
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
Usage Repurchase
Cross-Market Sales
Funnel KPIs
Data Quality Reporting
Customer Service Operational Reporting
Customer Service Agent Performance Reporting
Marketing Campaign
Efficiency Reporting
Channel Reporting (Customer Activity)
Lead and Prospect Qualification
Sales Talent Analytics
Customer Service Capacity Planning
Contact Routing Optimization
Statistics about vehicle and driving behavior
Expected Re-Purchase Date
Service Recommendation
Crisis Detection
Social Network Analysis
Segment-based Contact Strategy
Churn Analytics
Test Drive Model Forecast
Configuration
Recommendations
Website Personalization
Next Best Offer
Marketing Optimization
1
2
3
4
5
6
7
8
9
10
12
13
14
15
16
17
18
11
19
20
21
22
23
Cross- and Up-Sell Analytics
Overall
use
cases

11. Copyright © 2016 Accenture All rights reserved. 11
Integrated content mgmt. and multi-channel mgmt.
are key to effective digital sales & digital marketing
WeChat
Mobile APP
Pop-up store
location
Multi-channelexperienceinteraction
My CAR
Call Center
E-commerce
Improved sales
3rd party data
Inventory Management.
Task plan
Activities execution
Connectivity
Service
data
Online
behavior
data
3rd party
data
Sales data
Online & offline
data integration
Marketing
activity
data
Parts data
Data warehouse
Service data
Policy Process Marketing
activities
Sales strategy
Customer
Better experience
Dealer
Efficient operation
OEM
Flexible policy

12. Copyright © 2016 Accenture All rights reserved. 12
Data becomes ever more powerful only if being
connected – data connectivity to be improved
External data Internal data
Available external
data
Unionpay
payment
data
Website
browsing
records
WeChat
payment
data
Ali-pay
payment
data
Mobile App
using
records
Transportation
records
(airline, rail,
etc.)
Accommodati
on records
(hotels
booking, etc.)…
Data links:
Mobile
phone, MAC
address, etc.
DMS
CRM
POS
…

13. Copyright © 2016 Accenture All rights reserved. 13
Business model innovation towards a more service-
orientation becomes increasingly important
1
CAR SHARING SERVICE
• Alternative service for private
transportation
• A new fashionable lifestyle for
younger generations
2
VEHICLE SERVICE
• Vehicle related items
incl. parking, fuel
charge, repair service
etc.
• Exclusive discount or
resource availability
3
CHARGING SERVICE
• Charging facility
location
• Charging meter
package and high
usage discount
4
NEV add-on
• NEW add-on mobility service
(combustion engine vehicle rental)
• Short term substitution for NEV
with other conventional models
6
ONE-APP for CITY LIFE
• Everything needed in
your city: travel guide,
ATM location or even
restaurant tips (covers all
daily needs in city life)
5
CONNECTED VEHICLE &
PERSON
• Connected vehicle – OBD,
digital content, CRM etc.
• Connected person –
location based service (part
of social media)
MOBILITY
SERVICE
P

14. Copyright © 2016 Accenture All rights reserved. 14
• What will be the future customer needs?
• What type of business models can be realized beyond
traditional “hardware” in the context of service
transformation?
• What is my partnership strategy to bring together the
right set of competencies?
• How to achieve shorter innovation cycles, higher agility?
• How to build up the right competencies?
To cope with the challenges, car manufacturers
need to address a few key questions proactively

15. Copyright © 2016 Accenture All rights reserved. 15
To successfully digitize customer experience, six
key areas need to be taken into consideration
Integrate
d
Journey
Design
Personalized
Digital
Experience
Continuous
Customer
Access
Digital
Interaction
Management
Social
Engagement
Digital
Intelligence
16
5 2
34
Ensure a seamless
customer journey!
Make it relevant.
Make it personal!
Maximize availability
and convenience for
24/7-Customers!
Listen, learn and
use social media
activities!
Move beyond
transactions
to digital relationships!
Digital
Business
Define and
continuously use
predictive analytics!

16. Copyright © 2016 Accenture All rights reserved. 16
A well thought-through digital strategy and organization
transformation is needed to win in future game
Digital Trends
& Visioning
Business
Model
Customer
Experience
Digital
Enterprise
People &
Innovation
• Explore
• Educate
• Engage
“Engage me
with the art of
the probable”
• Reinvent my
business
• Disrupt or be
disrupted
“Disrupt my
industry”
• Customer
engagement
• Products as
Services
“Excite my
customers”
• Do more with
less
• Increase
collaboration
“Redraw my
operations”
• Build a Digital
culture
• Adopt Digital
ways of
working
“Build a Digitally
native
organisation”
How I can use Digital to…
Motive

17. 17
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