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How the automotive, mobility, and transportation industry embraced transformation in 2021 to drive resiliency and innovation into 2022 and beyond.

Now that we’ve ushered in 2022 and closed the chapter on 2021, I look back highly impressed with the resilience of the automotive, mobility, and transportation industries. Presented with unprecedented global challenges, the industry’s engine never stopped running. Companies across the value chain remained resilient, innovative, and proactive. These brands tracked everything from the ongoing pandemic and the supply chain crisis to the rapid shift to hybrid work, and the impacts of a global semiconductor shortage. In fact, innovation accelerated this year and enabled businesses across the industry to develop disruptive solutions and business models to keep pace and charge ahead.

While challenges remain, the industry’s resolve to accelerate transformation will set the stage for ongoing recovery and sustained growth in 2022. The growth and rewards for efforts the industry made in 2021 were beacons for the opportunities that lie ahead.

Empowering the ecosystem

Microsoft’s mission is to empower every individual and organization on the planet to achieve more. As an integral part of the automotive, mobility, and transportation industry, Microsoft seeks to empower, not compete with, our customers and partners to create something beyond just solutions: an aim to drive true social impact. Indeed, we are all embracing and helping to develop a more sustainable future, encouraging innovative new ways to connect, interact, and engage with people and the world around us.

We witnessed growth and innovation across the ecosystem making mobility safer, more sustainable, and productive which we will explore in the sections below.

Automotive and beyond: expanding the movement of people and goods

Given the momentum in mobility and technological transformation across the movement of both people and goods, Microsoft has expanded its automotive industry team to encompass mobility and transportation.

Travel is beginning to make a comeback. However, experts agree that we will not see pre-pandemic tourism levels for several years to come. Customers in the travel industry are looking to technology providers to address challenges and demands in a post-pandemic world. Partnering with Microsoft, Amadeus has driven innovation in its travel software development cycles, and data capabilities creating closer connections with its customers.

With a focus on sustainable transportation through electric air mobility, we partnered with Vertical Aerospace for efficient fleet management to maximize battery life through AI and big data analytics.

Transforming the workplace

The global pandemic created the need for businesses to embrace a hybrid workforce model. This meant providing efficient collaboration, productivity, and skilling solutions in a secure fashion on a global scale. The Manufacturing Institute claims up to 2.1 million United States manufacturing jobs could go unfilled by 2030 because of a lack of adequate skills1. The displacement of workers due to the impact of the pandemic has stressed this even further. Our latest Work Trend Index report highlights these trends and the impact on frontline workers.

Despite these challenges, the industry disruption was a lever to advance new, cloud-based transformative technologies to digitally empower their workforce, allowing companies to adopt more resilient, safer, and productive operations in less time. For example, operations equipped with Microsoft Dynamics 365 Remote Assist and Microsoft HoloLens allow employees to quickly learn complex tasks and collaborate from anywhere, addressing both skilling and operational effectiveness.

Mercedes-Benz USA  helped its service technicians more efficiently repair and maintain its models by providing U.S. dealerships with HoloLens 2 headsets, reducing time to resolve problems, and reducing technician travel time. Finally, ZF embraced digital and remote work for 150,000 of its global employees driving massive efficiencies in the process.

Accelerating innovation

By 2030, virtually all new cars will be connected devices, functioning as datacenters on wheels. Current trends in the automotive industry are rapidly increasing the capabilities of connected vehicles. Automakers are gaining in-house data management capabilities through partnerships with cloud platforms like Microsoft Azure which will allow them to offer a wide range of digital car-based and add-on services that will benefit business and consumer.

On this front, we announced how Cruise and General Motors partnered with Microsoft to accelerate the commercialization of self-driving vehicles—a critical milestone for the industry. Bosch also teamed up with Microsoft to develop a software platform to seamlessly connect cars to the cloud. The partnership will simplify and accelerate the development and deployment of vehicle software throughout a car’s lifetime in accordance with automotive quality standards, yet another critical requirement to help drive the global adoption of connected vehicles.

Volkswagen developed a platform for autonomous driving (AD) and advanced driver-assistance systems (ADAS) driving systems, enhancing the brand’s transformation as a software-driven mobility provider, delivering secure and reliable automated driving solutions to Volkswagen customers.

With accelerated change, we see the benefits and support innovation led through open ecosystems. We are proud to partner with The Eclipse Foundation and several industry leaders to define a working group focused on the software-defined vehicle.

And the shift to electrification

One of the dominant trends playing out this past year was the movement towards electrification. This year we saw initiatives and legislation around the world move towards the phase-out of fossil fuel vehicles. Car manufacturers responded by ramping up investments in technology and innovation to transition to EV fleets. Industry leaders like General Motors announced large-scale goals this year to accelerate production of electric vehicles, and new EV models are coming to the market from the traditional and new auto players.

In support of this transition, our traditional grid infrastructure cannot be overlooked and is critical to supporting this growth. Clever partnered with Microsoft earlier this year to optimize and balance the consumption of energy against the grid more efficiently.

Data-driven resilient operations and monetization opportunities

To successfully execute this innovation strategy, the industry must become more operationally resilient and efficient. Data is enabling a reduction of time-intensive and error-prone manual workflows, improving decision support, and enhancing visibility amongst trading partners throughout the value chain, creating more proactive and resilient operations and supply chains. In addition, data is providing new monetization opportunities enabling differentiated service offerings to customers for improved lifetime value.

With more than 6.5 million packages handled every day, FedEx uses advanced data analytics and machine learning operations (MLops) to reduce manual data processing, improve package handling accuracy, and reduce customer support calls. In similar fashion, Daimler Trucks North America uses Microsoft Dynamics 365 Supply Chain Insights to predict supply chain issues before they happen allowing them to meet commitments more consistently to dealerships and customers.

As one of the largest suppliers to the industry, we’ve helped ZF create the ZF Cloud, digitalizing all industrial and operational production and business processes. Through the comprehensive set of cloud, AI, IoT, and data technologies, ZF is transforming into a cloud-centric mobility service provider that delivers sustainable, safe, convenient, and affordable mobility solutions to its customers.

In addition to operational and supply chain improvements, data gathered from vehicles also creates new opportunities for driving sales, enhancing product design for newer vehicles, and the monetization of new revenue streams. Wejo is partnering with Microsoft to build its cloud infrastructure to deliver near real-time vehicle data and significantly enhance predictive analytics to provide value-added services for customers.

Using the power of machine learning and AI, Arrival is creating an open data platform to extract insights from vehicle data and edge computing to streamline vehicle-to-cloud data flow. This unified, canonical data standard and transparent data sharing policy will enable insights to improve vehicle designs, advance fleet logistics, and help spur advancements in mobility ecosystems and business models.

Data security and trust

No conversation about data would be complete without addressing security. With the proliferation of data across the industry, an important foundation must be security and trust. With our focus on ecosystem empowerment, we provide industry-leading “Zero Trust” security capabilities for our customers and partners through automated threat protection, robust cloud security, and governance and protection of sensitive data.

Enhancing the customer experience

The pandemic, labor impacts, supply chain, and semiconductor shortages had a profound impact on the industry and the customers it serves. For consumers, lower inventories of new cars made the used car market a prime target, creating new opportunities for dealers to engage with their customers and build long-term customer value.

Working with Annata, Microsoft is enabling a new approach to digital sales and services which enables dealers to provide more personalized customer experiences, building long-term customer loyalty. Tekion is simplifying the traditional dealer and consumer relationship journey with the Automotive Retail Cloud (ARC), utilizing Microsoft’s cloud-native tools to modernize the end-to-end retail journey. Another example is XPENG Motors, who is building on Microsoft’s Neural text-to-speech technology to enhance the in-car customer experience.  

Building a sustainable future

In 2020, Microsoft emphasized its commitment to helping our world work towards a more sustainable future by presenting a plan towards becoming carbon negative by 2030. By 2050, we aim to remove all the carbon dioxide emissions that the company has produced either directly or by energy consumption since the company was founded in 1975.

As we commit to reaching our own sustainability goals, we are also committed to enabling other companies and organizations to reach theirs. In 2021, we announced the Microsoft Cloud for Sustainability to help companies and organizations record, report, and reduce their environmental impact through automated data connections and actionable insights. Etihad is already leveraging the cloud to measure and benchmark its environmental footprint, allowing the brand to implement and assess carbon efficiency savings across its business operations. We will continue to drive relationships with key players like the World Business Council for Sustainable Development to help advance our global sustainability goals for Microsoft and our customers.

A look ahead: 2022 and beyond

Our industry continues to drive innovation rapidly and at scale. We are seeing established players pivot and rise to challenges that create new opportunities for growth. At the same time, new players are disrupting the established ecosystem with innovations that are pushing boundaries and re-writing the playbook. Looking back at 2021, it amazes me to see everything the industry has accomplished in these uncertain times, and I am excited for what we will do together in 2022.

While Microsoft and others had to pivot from in-person engagement at this year’s CES 2022 in Las Vegas due to concerns over COVID-19, we created a digital experience to demonstrate our unique industry capabilities around accelerated innovation, mobility services, customer experiences, and resilient operations.

You can learn more about our digital presence at CES 2022 and the exciting press announcements made in our Microsoft Automotive and Mobility press kit. I also encourage you to learn more about how Microsoft is joining with customers, partners, and the automotive, mobility, and transportation industry to create a culture of collaboration through Microsoft Cloud for Automotive, Mobility, and Transportation.

With ever-exciting times ahead of us, I wish you a safe, healthy, and prosperous New Year!


Sources:

12.1 Million Manufacturing Jobs Could Go Unfilled by 2030—National Association of Manufacturers.