Automotive industry in slow lane for implementing AI: Capgemini study

Only 10% of major automotive companies globally are implementing artificial intelligence (AI) projects at scale despite the technology’s potential to boost profit, according to a study from Capgemini Research Institute.

The number of automotive companies that have successfully scaled AI implementation projects has increased only marginally (from 7% to 10%) in 2018-19 compared to the previous year, it stated. However, more significant was the increase in companies not using AI at all (from 26% to 39%).

The study called “Accelerating Automotive’s AI Transformation: How driving AI enterprise-wide can turbo-charge organisational value” surveyed 500 executives from large automotive companies in eight countries. It built on a comparable study from 2017 to establish recent trends in AI investment and deployment.

According to the report, just 26% of companies are now piloting AI projects (down from 41% in 2017). This could be on account of companies finding it harder to realise a desired return on investment. The results also reveal a significant regional disparity, with 25% of US firms delivering AI at scale, compared to 9% in China, 8% in France, 5% in Italy and 2% in India.

The research said that the roadblocks to technology transformation are still significant. These include legacy IT systems, accuracy and data concerns, and lack of skills resulting in the modest progress in AI implementation.

The slow growth of AI in these sectors, according to the study, could also be owing to the hype and high expectations that initially came with AI. It may have turned into a more measured and pragmatic view as companies are confronted with the reality of implementation, the report added.

“These findings show that the progress of AI in the automotive industry has hit a speedbump,” said Markus Winkler, executive vice president and global head of automotive at Capgemini. “Some companies are enjoying considerable success, but others have struggled to focus on the most effective use cases. Vehicle manufacturers need to start seeing AI not as a standalone opportunity, but as a strategic capability required to shape the future which they must organise investment, talent and governance around,”

The survey, however, found a consistent trend in terms of AI creating jobs and delivering benefits across every automotive business function. On average, it delivered a 16% increase in productivity across Research and Development (R&D), operational efficiency improvements of 15% in the supply chain and 16% in manufacturing/operations.