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The auto retail service experience gets a major upgrade with Industry 4.0 and 5G

The auto retail service experience gets a major upgrade with Industry 4.0 and 5G

Upgrade your dealer service experience!

Everyone is talking about 5G use cases and private wireless networks in the context of factories, supply chain and logistics in the automotive industry! But, are there other untapped automotive business opportunities using private 5G networks as an enabling technology for new business value?

In the automotive retail domain, we see opportunities for car manufacturers (OEMs), auto retailers, and innovative end-customer services. 5G and private wireless with its highly secure and pervasive high-bandwidth connectivity capabilities can open new doors and bring new business models to the evolving automotive sector. These business opportunities, for both automotive retailers and OEMs, start with a simple, secure, and automated over-the-air (OTA) software update process, enhanced with 5G private wireless networking.

Automotive maintenance and recalls in a software-driven era

The amount of software will continue to increase in cars and therefore the need for more frequent, seamless updates will increase too. Over-the-air (OTA) updates via public/commercial networks is a well-known technique that is already implemented by auto manufacturers. It is utilized in vehicle diagnostic platforms, recall-related software patches for navigation system data updates, new entertainment features, etc., essentially the non-critical software elements of a car.

Figure 1 The rising trend of software complexity and share of total value add. (Source: Gabriel Seiberth, Accenture)

Figure 1: The rising trend of software complexity and share of total value add. (Source: Gabriel Seiberth, Accenture)

But what about the software updates for the critical electronic parts (EUCs) in your car? These updates today still require a visit to your local dealer, as they have to be done manually, via a wired connection. From a security perspective, this manual update process prevents the manipulation of critical software parts, such as airbag functionally or ESP/brake systems. For this reason, in the case of a critical software update, we tolerate the effort to make an appointment with our local dealer, drop off the car, grab a rental car or rideshare, and pick up your updated car in the evening. In my mind, this is not a brand-relationship-friendly experience.

Figure 2: Rising trend in the number of vehicle software recalls.

Figure 2: Rising trend in the number of vehicle software recalls.

OEMs accept the “manual process” with high warranty costs to process these updates. Recalls with manual updates cost automakers millions – and sometimes billions of euros, not to mention the cost to their brand reputation. Statistics now show a rising trend of software-related recalls, which need to be covered by OEMs warranty budget.

Let’s think about the alternatives with a private 5G solution in place at the auto retailer. What changes or benefits would that make to the clients, to the OEM’s warranty budget, or the retailer's workshop or service department utilization? How much faster could the recall be deployed and how might this influence positive brand perception?

Bringing it all together securely – Connecting factories, dealers, and OEMs

Software installation and update processes are discussed as one of the major factory use cases in the automobile industry in the context of 5G private wireless. From a network perspective, this capability is already feasible via a built-in 5G modem and the availability of private 5G networks. Private networks can deliver on both performance and security requirements.

How can it be done? The OEM would need to modify the existing software programs or in-car architecture to provide the authorization and authentication procedures to allow a full software installation (including the critical software parts in the car) via a private 5G network. Once this is done, the software coding changes and procedures are set in place to leverage this functionality from the factory to other parts of a car manufacturer’s operation. In this case, the OEM could use this functionality to provide secure OTA updates in a private 5G environment also to the end customer via an installation at a retailer.
What does this mean for the involved parties?

Changing the game: making maintenance visits a brand-building opportunity

Instead of a very time-consuming and less-than-optimal service experience, there is now the opportunity to engage with customers personally while at the same time offering a “seamless” experience. A customer can simply stop by the dealer at their convenience for a short visit to upgrade their system. While drinking a cup of coffee in the dealership’s “coffee shop” or retail store, the car is getting updated automatically and securely over the “private” air interface. Once the update is done, the customer can simply drive off with an updated vehicle without any security risk or hassle. The customer is happy, had the opportunity to engage with the local dealer and the work of the update is done effectively and within the client’s timeframe. A client-centric benefit.

Besides the updates for critical software, the “retailer OTA service” could also be used for maps, media, or other non-critical updates, where large bandwidth is needed. The benefit would be, that the bandwidth at a retailer will be guaranteed, available, and much higher than with a public network.

Improving the retailer’s productivity, efficiency, and workshop utilization

Higher workshop/service department utilization and productivity is realized as software updates will be done, (and even in some cases billed – like add-on options and new features!) automatically without any human interaction. The retailer can use the short waiting time and new service experience to delight the end-customer (cross-/up sell opportunities).

Additionally, in the case of a normal inspection appointment, the detailed software check, which today in most cases is a wired process, can also be done immediately while a client is checking in their car. This gives the retailer the option to discuss any error messages in detail at the time the client hands over the car.

Benefits & business impact to the OEM:

In addition to the positive brand experience for the end-customer, and optimized workshop utilization, the biggest value might be for the OEM.

A fully automated and secure software OTA update process at a retailer gives the OEM the chance to reduce warranty budgets for software recall actions. Furthermore, having a secure OTA update process installed at a retail base gives the OEM the option to attract customers with a vehicle in Segment 2 and/or 3. And finally, the OEM can work on additional use cases to optimize and automate processes at the retail level.

When is this capability available?

This is not some far-off proposal for futuristic “space cars…” these capabilities can be implemented from a network perspective, today!

The network infrastructure and 5G technology solutions noted above are available now for your automotive operation, and they also apply to other retail use cases. Keeping in mind, that most use cases are already under development for factories, use case implementation could be realized with marginal costs.

Visit our website, or contact a Nokia Automotive Industry advisor to learn more.


Stephan Miller

About Stephan Miller

As the head of the Global Automotive segment for Nokia, Stephan is driven to deliver solutions fueled by 5G and private wireless as the world's leading automotive companies cruise into their Industry 4.0 future. He has broad automotive industry expertise, having served in several leadership roles in SI/Consulting and in the Automotive Industry in the last 20 years.

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