Nearshore Americas

Automakers No Longer Excited About Artificial Intelligence: Study

Automakers are in the slow lane when it comes applying artificial intelligence (AI) to their operations, with a study from Capgemini finding a fewer number of AI deployments in the global automotive industry.

The French IT consultancy found AI deployment increase by barely 3% in 2018, a sharp slowdown compared to 7% increase in the previous year.

More than anything else, there was an increase in the number of companies not using AI at all, from 26% to 39%.

Considering the report, just 26% of companies are now piloting AI projects, while only 10% of major automakers are pushing ahead with plans to deploy the technology at scale.

They are no longer excited about the technology, despite Capgemini saying that AI has the ability to increase automakers’ operating profit by up to 16%.

“I am very confident that if we can deploy AI to its fullest potential it would have an impact on performance equivalent to almost doubling our capacity today,” the consultancy quoted Demetrio Aiello, head of the AI & Robotics Labs at Continental, as saying.

The IT consultancy, which claims to have surveyed 500 executives from large automotive companies in eight countries, says “high expectations” that initially came with AI are now “confronting with the reality of implementations”.

In other words, some companies could be finding it harder to realize a desired return on investment.

AI deployments, however, vary from region to region, with 25% of US firms delivering AI at scale, compared to 9% in China, 8% in France, 5% in Italy and 2% in India.

AI can deliver a significant dividend only if it is implemented at scale. To implement at scale, companies need to invest heavily and upskill their employees.

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In the auto industry, AI is expected to create jobs rather than destroy it.

“These findings show that the progress of AI in the automotive industry has hit a speedbump. Some companies are enjoying considerable success, but others have struggled to focus on the most effective use cases…,” says Markus Winkler, Capgemini’s global head of automotive.

Narayan Ammachchi

News Editor for Nearshore Americas, Narayan Ammachchi is a career journalist with a decade of experience in politics and international business. He works out of his base in the Indian Silicon City of Bangalore.

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