Artificial Intelligence: The Future of the Automotive Sector

The fourth industrial revolution is here. While it has yet to fully permeate the automotive sector, it has already forced an evolution, agreed panelists at the Mexico Automotive Summit 2018 on Wednesday at Hotel Sheraton María Isabel in Mexico City. Participants discussing the “Technology Trends Impacting Vehicle Development” looked to determine the most disruptive trends coming to the automotive sector, while addressing the main challenges Mexico is facing to ensure the full penetration of these technologies.

“The main trends concerning the automotive sector are self-driving, connectivity between systems internal and external to the car, electrification and shared mobility,” said Ricardo Haneine, Partner at A.T. Kearney. “These four trends are also changing mobility and urban markets.”

During the panel, speakers said these trends were already a reality in many manufacturing sectors and agreed they have become key to company strategies. Marcos Pérez, Director of Product Development at Ford de México, added that “Ford is investing US$11 billion in electrification and by 2019-2020, 90 percent of our vehicles will be connected to the cloud.” Scania too is betting on the revolution. It has about 3,500 connected vehicles in Mexico collecting 550,000km of information per hour to develop new products and optimize existing ones, explained Enrique Enrich, Managing Director of Scania Mexico.

Industry 4.0 technologies are influencing much more than car manufacturing; they also have a significant influence on market and mobility trends. “In the automotive sector it is necessary to think about mobility systems as disruptors such as Uber and Apple are gaining strength as competitors. Individuals are becoming less willing to buy a car and instead prefer to hire a service such as Uber to take them to their destination,” said Mónica Aceves, Strategy and Innovation Manager, R&D Center Mexico of Continental Automotive.

Manufacturing companies are increasingly investing in what comes next. “In the automotive industry, manufacturing plants have been automated for many years. The question now is what to do with all this data, which is where artificial intelligence comes in,” said Luis Geraldo Eboli, Director General of CIMATIC de México.

Pérez agreed, explaining that Ford already has many groups working on artificial intelligence with surprising results. He illustrated this with a problem regarding a change in gear shifts that the company had been working on for a long time but that a young group of programmers managed to solve in 30 minutes using artificial intelligence.

Another way in which artificial intelligence can influence all of Mexico is road safety, added Enrich. “Another important trend that is disrupting the market is autonomy, which will lead to fewer accidents and much safer roads,” he said.

The main challenge, however, is the proper introduction of these technologies. Mexico has strong manufacturing capabilities, explained Haneine, but the country has a weak institutional framework and not enough human capital to properly adopt these new technologies. All panelists agreed that the key to fully permit the penetration of industry 4.0 into the country is to have sufficient human capital.

Pérez explained that there is not enough human capital in Mexico to implement these technologies and as a result it is an area that is increasingly valued by OEMs. “The capability to learn is the most important characteristic we look for in our new hires,” he said. Moreover, time is a concern. “It took Mexico about 100 years to fully adapt to the mechanical motor but we do not have 100 years to make the subsequent shift. The industry is increasingly demanding these technologies,” said Aceves. Her solution was for the industry to invest in talent by allying with academia.

Panel members agreed that investing in the development of human capital for the incorporation of advanced technology, such as artificial intelligence, will be key to the development of the country and of individual companies. Pérez urged the audience to invest in this area, saying: “If you have engineering areas and you have not incorporated artificial intelligence into them you are late to the party.”