How has the automotive industry been affected by information technology?

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pohnpei397 | College Teacher | (Level 3) Distinguished Educator

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In one sense, information technology has affected the automotive industry in the same way that it has affected all other industries.  In essentially all industries, information technology has pushed firms towards greater efficiency and towards things like “just-in-time” supply chains.  It has helped firms engage in data mining of customers that allow them to do a better job of marketing.

However, we can also examine at least two ways in which the automotive industry has been affected in ways that other industries have not necessarily experienced.  First of all, information technology has affected what consumers expect to have in their cars.  Firms have had to find ways to give consumers access to things like GPS and the internet as they drive along.  They have to balance this with safety concerns, but they are trying hard to put more information technology in the cars.  Second, information technology has affected the ways in which cars are sold.  The internet has put much more information in consumers’ hands and has made it harder for dealers to operate in the ways that they once did.

In the future, information technology may completely revolutionize the auto industry.  The efforts being made by Google and other companies towards cars could end up leading to changes that would completely remake the industry.  This has not yet happened (though we do have more in the way of things like sensors that help you park your car) but it could be something that has a tremendous impact on the auto industry.

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