The Road Ahead: The Role of Technology in a Fast- Evolving Automotive Industry Why embracing technology is the only way to stay ahead of the pace of change.
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The automotive industry is undergoing a seismic shift; and this is no more notable than in Saudi Arabia where the rapid evolution of digital platforms, changing consumer behaviors and technological advancements have converged to entirely reshape the way in which vehicles are bought, sold and owned. Saudi Arabia has made impressive strides in its digital transformation. In 2024, the Kingdom ranked second amongst G20 countries on the UN International Telecommunication Union's ICT Development Index which underscored its progress in areas such as digital policies, smart cities and eGovernment services. This commitment to technological innovation is equally reflected in the private sector. Increasingly, companies are recognizing the significant role that responsive, intuitive platforms and real-time engagement play in the user experience.
Previously, buying a car was viewed as an overwhelming and laborious process – with price negotiation and overzealous salesmen being particular bugbears. According to Arthur D. Little's Future of Automotive Mobility 2024 report, which is grounded in extensive primary customer research, 53% of respondents in the Middle East expressed willingness to complete their car purchases entirely online – the highest percentage globally. These figures demonstrate that there is an immense appetite to go fully digitally when it comes to car ownership – however, it is clear that more needs to be done to bridge the gap between ambition and reality. The onus must be on the automotive industry to build trust and drive understanding of the immense benefits that exist for consumers that are ready to take the plunge.
The journey to purchasing or selling a car can be complex – but it does not have to be. From researching a car to aftercare – there are a myriad of new technologies that can ensure a more efficient, transparent and convenient user experience. For instance, offering digital car comparison tools that allow consumers to compare specifications such as price, engine size, horsepower, fuel economy, safety features, and design – help buyers make more informed decisions, all from the comfort of their homes. Beyond that, digital tools such as car valuation services are helping to streamline the selling and trade-in process, using real-time data and industry benchmarks to offer users reliable market estimates. The introduction of digital directories – such as the Motory Guide, the Kingdom's first online automotive business directory – has further enhanced user access to aftermarket services, ranging from service centres to tire shops and body and paint workshops.
Artificial Intelligence (AI) can further enhance the user experience and address many of the pain-points associated with buying from a car dealership. By analysing vast amounts of data, AI can successfully predict which models a customer might be interested in and those best suited to their unique needs and preferences. This can considerably reduce the decision-making process, whilst also providing reassurance to those that are intimidated by the volume of vehicles on offer. AI-powered chatbots and virtual assistants are available 24 hours a day to answer queries, provide recommendations and guide customers through the purchasing process. These technologies not only enhance customer satisfaction by providing always-on support but can also streamline operations for automotive companies to enable them to provide better in-person assistance.
The financing of a new vehicle has been frequently identified as a pain-point for consumers, in addition to tedious paperwork, insurance, and related negotiations. Digital platforms will allow for online document verification, credit checks, and loan approvals. For instance, Motory.com connects users with trusted partners who offer various payment methods and flexible purchasing solutions, enhancing flexibility and convenience for a wide range of users. Meanwhile, the integration of advanced technologies like blockchain can further enhance transparency and security in online transactions. Blockchain can provide a tamper-proof record of vehicle histories, ensuring buyers have access to accurate information.
Whilst the opportunities are plentiful, challenges do still exist. And even though the number of people relying on automative digital platforms to purchase of their car is increasing, it is clear that there is still work to be done to drive understanding of, and build trust around, the new technologies that are transforming the automotive industry. The sophistication of the technology at play requires deep collaboration – between manufacturers, wholesalers and distributors. Consumers can only experience the full potential of these technologies if strong synergies are formed. In addition, it is unlikely that customers will ever abandon visits to the dealership entirely. Whilst technologies are revolutionizing the way in which cars are bought, sold and owned, there will always be a need for physical interaction with a vehicle that plays such an important role in everyday life. "Phygital" – physical plus digital – will come to represent the gold standard in the purchase of automotive vehicles – empowering customers to tailor an approach that truly works for them.
