AR to Dramatically Increase the R&D Pace for Automotive OEMs

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2Q 2018 | IN-5085

While the challenges, time, and cost to implement AR solutions are significant, developing a dedicated and comprehensive AR strategy will help bring the automotive sector fully into the digital age to the benefit of companies’ bottom lines and consumers’ experiences.

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Automotive Manufacturers Are Strengthening their Activities in AR


While many industries are beginning to embrace augmented reality (AR), including logistics, manufacturing, and energy & utilities, AR is starting to come into the automotive space as well. Many players in the automotive industry are venturing into AR, which has demonstrated benefits to the entire industry value chain, from design through production and sales. Auto manufacturer Ford has outfitted its designers with Microsoft HoloLens headsets to see virtually three-dimensional (3D) designs and parts incorporated into a physical vehicle, with plans to expand the use of AR globally after the initial trial phase. Volkswagen has been testing and piloting AR use cases for some time and has used the AR technology to complete the design iterations faster.

The automotive AR market is expected to grow at a compound annual growth rate (CAGR) of 177% during the forecast period and reach US$5.5 billion in 2022. In addition to making driving safer and more comfortable, automotive manufacturers are increasingly using AR muscle for automotive design and development, as well as marketing and sales. ABI Research estimates that global smart glasses shipments for the automotive sector will hit 1.7 billion in 2022. The high-end, head-worn AR/mixed reality (MR) devices are on a path to being applied for more complicated use cases in the automotive industry.

AR Improves Creativity, Collaboration, and Speed in Automotive Design


Automotive design is very important in terms of distinguishing the brand from the rest of the competitive landscape, as brands are now more similar when it comes to fuel economy, crash performance, road feel, and price. However, the innovation cycle for the research and development (R&D) of new models and technologies is usually slow. What’s more, it is too expensive to carry out the required tests, especially if not integrated into the final model. Through AR, designers and engineers could test new ideas and concepts when the vehicles are still in the digital phase, which can save tremendous costs. The use of AR benefits the manufacturers at the automotive design phase by visualizing the body structure of automobiles and parts to examine the feasibility of design innovation and preview feature functionality in the digital design phase. The designers can leave voice notes for other colleagues when they see a concern or a feature of the vehicle they want to change. The designers and engineers can collaborate easily and evaluate the same feature in real time, which ultimately speeds up the decision-making process. AR can be applied for clay milling as well, allowing great freedom and efficiency in how prototypes are created or changed. Instead of the traditional clay model approach to automotive design, AR provides virtual components to real automotive prototypes on top of an existing physical automotive, to show design variants or to support design reviews, thereby reducing the cost and time during the launch phase.

AR has also transformed marketing and sales for the automotive industry. Customers can interact with the customized visualized vehicles at home and learn about the finer details of the cars. With the help of AR, automotive companies can arrange for customers to take a virtual test drive and inspect the design and features virtually in a digital room before making a purchase, which also saves space, time, and money for dealerships. Automakers can provide an owner’s manual with AR features, enabling drivers to learn how to perform basic maintenance on their own vehicles. The rich customer experience enabled by AR might reduce any concerns that customers might feel about their decisions, thus shortening the sales cycle and resulting in better sales in the long term.

AR Creates Opportunities for Innovation


AR will play a key role in transforming the digital commerce experience. Before mainstream adoption of AR technology, the automotive manufacturers should find the right approach to fully exploit the value of AR in the companies. Automakers need to establish a dedicated AR strategy and incorporate it into the business units of the organization, defining the range of opportunities in the automotive industry, either reinforcing production differentiation or increasing efficiency and reducing costs. Ownership of an AR project should rest with a business element of the organization, as it is better to assess how AR could benefit the company both quantitatively and financially with return on investment (ROI) measures. The company should also select the most valuable use cases for AR deployment with pilot testing and feedback collection. Once the company is determined to expand the use of AR for business, it needs an implementation roadmap, considering both the technical challenges and organizational skills involved. The challenge, time, and cost involved in building a complete AR implementation are significant, so firms can collaborate with specialty software and service companies to leverage outside talent and technology.

As 3D visuals are needed for immersive applications in automotive design and prototyping, binocular devices that support MR are the only options at the moment when considering head-worn devices. MR entails using headsets to overlay digital content onto a physical space, and it contains more interactivity between the user and content. In order to fully redeem the benefits of MR, ABI Research believes some hardware elements have to be addressed. As automotive design and prototyping needs deep visualization capabilities and high-quality AR displays for seamless digital and physical integration, the optical hardware is usually bulkier. While short use periods are acceptable, longer wear requires balance of functionalities and ergonomics. User interface (UI) is critical to present and interact with 3D digital information; gesture UI should not be limited to basic hand gestures and controllers, while speech recognition and voice interactions will become vital for AR head-worn devices. Wireless connection is important to enable the designers and engineers to walk and move around without fear of tripping on something.

Every AR experience, from the least to the most sophisticated, requires content. Companies should develop solutions to repurpose existing digital content, such as computer-aided design (CAD) and 3D models, or integrate real-time data streams from enterprise business systems into the experience. The introduction of Apple’s ARKit and Android’s ARCore software development kits (SDKs) will stir developers to create AR content early in the life cycle. As a cross-platform approach allows AR to be deployed across different devices, much of the new AR-enabled mobile content can be transitioned to dedicated head-worn devices. An emerging content-publishing model that uses commercial AR publishing software to create AR content and host it in the cloud will become common and scale AR up; large amounts of information and frequent content changes can be pushed to devices without changing the software itself.

For more information, please see ABI Research’s AR & Mixed Realityresearch service.


Companies Mentioned