AI in the Auto Industry Is About More Than Self-Driving Cars

Car buyers gathering at the Frankfurt Motor Show last month will have witnessed the usual glitz as car makers went into overdrive launching new models, including of course many new electric vehicles reflecting big change in the industry. Behind the glamour of the show, the world’s biggest car makers are heavily investing in new technologies to remain competitive, including Artificial Intelligence (AI) and Machine Learning. While perfecting algorithms for self-driving cars is a longer-term goal and grabs the headlines, much is being done with AI to improve the design, manufacture and marketing of cars. 

In an industry characterized by high costs and low margins, car makers (OEMs) are turning to AI to improve efficiencies, improve quality control and understand their markets and buyers better. Five years ago, Volkswagen opened its Data:Lab in Munich. It is now the company’s main research base for AI with around 80 IT specialists, data scientists, programmers, physicists, and mathematicians researching and developing applications in machine learning and AI. Volkswagen goes as far to say that AI will fundamentally change the company’s value chain as it will now begin, not end, with the production of the vehicle.

An area of focus is applying AI to market research and marketing to pre-empt changes in demand and consumer choice outside of OEMs traditional 7-year model cycle. Any manufacturer that can be ahead of the curve in marketing will have a significant advantage. Volkswagen is using AI to create precise market forecasts containing a multitude of variables including economic development, household income, customer preferences, model availability and price.

With this kind of insight, it is possible that the company could configure model choice (specs, optional extras, engine sizes etc) and order production to meet buyer preferences on a smaller regional or even hyper local level. For example, a Golf special edition that appeals to specific buyers in London or an Amarok truck configured for the needs of farmers in the Rhineland. 

Volkswagen’s German rivals are also scaling investment in AI technologies and are keen to be seen doing so with positive statements on their websites, and active recruitment drives to get the best developer talent. All three of Germany’s OEMs are aware that they need to be technological leaders in IT as much as engineering as cars become more connected and software driven.

At its factory in Stuttgart, Daimler has created a knowledge base that stores all the existing vehicle designs at the company which any new engineer can tap into. More than this, the algorithm has been trained to suggest that a new engineer contacts a more experienced colleague for human advice in certain circumstances. A good example, of how AI can be trained to interact with human workers.

At the final inspection area at BMW’s Dingolfing plant, an AI application compares the vehicle order data with a live image of the model designation of the newly produced car. If the live image and order data don’t correspond, for example if a designation is missing, the final inspection team receives a notification. This frees up human employees to work elsewhere. Algorithms are also being taught to tell the difference between a hairline crack in sheet metal and simple dust particles, something that is beyond the scope of human eyesight. Meanwhile in paint shops, AI and analytics applications offer the potential to detect sources of error at much earlier stages of the process. If no dust attaches to the car body before painting in the first place, none needs be polished off later.

While these examples of AI applications may lack the sci-fi appeal of self-driving cars, they are presently more important to the future survival of the car industry, not just in Germany but across the globe. AI is being used effectively to meet the three fundamental challenges of the industry’s survival: improved quality, cost and waste reduction, and customer demands.  

If you liked this text, feel free to browse our Artificial Intelligence focus area for more related content.


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