Automotive enterprises face five novel challenges: evolving user demands, new business models (ride sharing and mobility as a service), 2C digital marketing, super app innovations, and software-based manufacturing. As a result, their goal is to establish a digital platform for new services that will upgrade their approach to the future.

By 2025, China's connected vehicle penetration rate is estimated to exceed 62%, with 49% for L2 or above autonomous driving. The rapid growth of intelligent vehicles generates a sharp increase in the volume of data, so this data is even more valuable. Just like smartphones, vehicles become more intelligent to deliver a more engaging experience. Unlike smartphones, however, vehicle data applications are only 14% as profitable despite generating a thousand times more data.

As vehicles become increasingly connected, the entire automotive industry chain is going digital. McKinsey highlights the challenges faced by component suppliers in their digital transformation journey, including the need to reduce costs and improve efficiency, handle an unstable supply chain, modernize their R&D model, and speed up global business development. Digitally transformed ecosystem sectors are forming alliances on both innovation and industry upgrade.