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The Big Role of Big Data for Automotive Industry

Ford CEO, Mark Fields made a very powerful statement at the CES 2016 show. He said “…Overall, when you look at our business, we’re not only a car manufacturing company. We are a technology company. As our vehicles become part of the Internet of things and as consumers give permission to us to collect that data, we’ll also become an information company.” When you see a 100-year old car company wanting to become a big data company, you know that big data is getting bigger every day. A report by The Center for Automotive Research cites big data as an “engine of innovation” for the automobile industry.

Big Data is no more just a buzzword. It has the potential to disrupt the automotive industry. In fact, in many areas, it has already started showing a significant impact. The automotive companies, as well as the suppliers, are analyzing the structured and unstructured data from various sources to improve their business efficacy, better manage their portfolios, improve quality, and enhance marketing effectiveness.

Let us have a look –


Automakers gather data on the assembly line throughout the building process and then apply predictive analytics to improve the overall manufacturing simulations. The data is used to improve the machine performance and also to make the assembly line more efficient and flexible.

Supply Chain

Automakers and suppliers have started harnessing the power of Big Data to forecast the demand across the entire supply chain. It is helping the suppliers to balance their stocks – they are able to take out slow-moving parts and replace those with most-needed items. It is also helping the manufacturers to produce a more accurate volume of parts. In very near future, when all the collaboration happens across the industry, it will be very easy to predict the demand throughout the life-cycle of the product.

Customer Retention

Typically, a customer’s journey comprises of purchase, aftersales, and repurchase. A detailed analysis of customer leakage at various touch points can provide valuable insights. Customer retention requires that the customer should be satisfied at every stage of contact with the brand. Analytics helps companies with what needs to be done to ensure that. By analyzing the historical data about each customer at each touch-point, companies are building various models to predict the likely behavior of the customer in future in terms of future purchases.

Preventive Maintenance

Based on the huge amount of data generated by the on-board sensors, automakers are able to detect the abnormal events well within time and take proactive actions to remove the potential performance problems. With the help of in-car sensors drivers and car owners get timely warnings and alerts about functioning of the various parts of the cars –early warnings help in replacing the parts before they fail, leading to less interruption. Auto companies are also working towards tracking performance data to be able to tweak vehicle maintenance and boost mileage and lower repair costs.

Vehicle Insurance

Using telematics, the sensors and systems embedded in the car constantly collect the information such as distance covered, car speed, duration, geo-locations, driving patterns, parking style and other such factors. This information is used to assess the risk of potential accidents. Using this real-time information from thousands of machines, insurance companies are able to proactively provide warnings and alerts and also offer personalized insurance pricing.

Vehicle Redesign

The vehicle performance information is a valuable piece of data for the engineers to help them refine the future iterations of the vehicle. Through warranty repair data mining, automakers are able to do cost-performance analysis and upgrade the low-cost parts with high-cost and more durable parts to avoid warranty costs and save money in the long run.


Big data is playing a major role in automotive marketing. Companies are using it to engage and reconnect with the customers. A huge volume of structured and unstructured data is being segmented and analyzed to make the right offers to the customers at the right time, make the right sales pitch, and also to seek feedback on current models. The customer sentiment analysis helps the marketing teams in defining the right messaging and themes for the new campaigns.


Through an in-depth, real-time analysis of consumer preferences, habits and buying decisions across a variety of market segments, auto manufacturers can develop more effective financing programs, new services and identify new revenue streams. Big auto giants like GM and Ford have already invested in Big Data and Analytics and are seeing huge benefits through that investment. Fierce competition and growing pressure to outperform the competition are compelling the automakers to transform into data-driven companies.

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