AI Helps Automakers Cut Costs, Speed Production

It’s no secret that Millennials have turned some of the major buying choices Americans used to make on their ear. Unlike their parents, they aren’t striving to own two autos, have 2.5 kids, and live in the suburbs. They want more choices because now they have more choices due to high-tech. Lyft reported a study that found in 2017, almost 250,000 of its passengers sold their own vehicles to rely on transportation apps to get around. Does that mean fewer autos will be sold? Is there another way for automakers to approach this change in societal norms?

Businessinsider.com reported some insight on how automakers can address this change in customer preferences:

  • Automakers can use AI to adapt to changes by decreasing production costs and creating new revenue streams.
  • Auto companies are adopting AI to take advantage of the benefits. Toyota, for instance, launched a venture capital subsidiary in 2017 and Volkswagen has more than 100 AI applications running in trial projects in its 120 plants.
  • By 2025, AI is expected to provide $173 billion in cost saving throughout the automotive suppy chain, including procurement and research and development.
  • Self-driving technology will be the greatest AI development, with potential for $556 billion in revenues by 2026, growing at a 39% compound annual growth rate in 2019, according to Allied Market Research.

Costs are the main barrier to AI adoption, according to 53% of global business and IT leaders, who were surveyed by MIT Technology Review. The good news, however, is that managers are less resistant to adopting AI applications, and 9 out of 10 say they are interested in doing so, according to a the MIT Sloan Management Review. However, many companies have AI projects that fail because they don’t align their AI strategy with their overall corporate strategy.

Though the landscape may be changing in most businesses that employ AI in their business model, it’s a sure bet that the major industries will find away to make AI profitable as they slowly make progress.

By turning to AI, auto makers will find that by 2026, self-driving tech alone will be producing an estimated $556 billion in revenue, up from 2019’s $54 billion.

read more at businessinsider.com