The automotive industry is at the dawn of a new era. With traditional ideas about how we drive and own cars changing, the industry has been forced to start evolving and become more digital. However, this isn’t the only challenge it’s facing.
The European Union aims to be carbon neutral by 2050. In the EU, the car industry is the largest private investor in research and development, but there’s still huge pressure on car manufacturers to innovate – quickly.
To find out more about how the industry is approaching these innovation challenges, we spoke to Sebastian Grams, former Chief Information Officer (CIO) at SEAT. The Spanish car manufacturer has been acknowledged as a leader in digital transformation, particularly through their software and digitalization brand, SEAT:CODE, which aims to “disrupt the SEAT future”.
We discussed the importance of digital innovation in the car industry, how SEAT’s young demographic is helping drive change, and how the company is evolving to navigate future challenges.
Andrzej Szymczak: Looking back over your 20-year career in the automotive industry how has the attitude to innovation changed?
Sebastian Grams: There have been a lot of a lot of changes in the car industry. When I first started as a young engineer, almost every car was powered by a combustion engine. Now, 20 years later, we have a lot of electric cars, and this is only the starting point.
We are facing a huge challenge as we’re striving to be CO2-neutral in the future. This is not only a target for the automotive industry, but a target for our future to make the world a better place.
I also think that how we drive and own cars is changing. We are facing a situation where people do still want to own a car, but the younger generation in particular are using and sharing cars differently. This is a huge change for the automotive industry. At SEAT, we had a clear target to change into a digital company by operating fleets of millions of mobility devices. Moves like this are transforming our industry.
Finally, I see self-driving as the most fascinating innovation. The self-driving car is one of the biggest changes in our future. From here, we can think about an autonomous driving world where you are a passenger of your mobility device.
How does SEAT’s younger demographic influence your role as CIO?
If you look at our customers, SEAT has the youngest customers on average within the Volkswagen group. So, we’re focused on developing the right digital products for these younger customers.
We developed our mobility platform, SEAT:CODE, in 2019 and had a successful first full year of business in 2020. Now, we’ve built more than 30 different digital products. I believe that we’ll continue in this way, with a focus on cars, mobility products, digital products and a mobility platform.
Initiatives like our scooter sharing service in Barcelona are giving us more opportunities to understand our customers and what they want in the future. We’re finding out how customers want to move from A to B, how their accessibility needs change throughout their week, and how they’re accessing it.
We’ve also launched a mobility platform that we can sell externally as a white label product. So, we’re giving others the opportunity to operate fleets and digital devices, and ultimately enter this space of digital mobility.
Would you say that the focus of your current role is to help transcend the car as a product?
There are different dimensions to this. First of all, SEAT:CODE and CUPRA were developed and founded to boost the digital transformation of the car itself. These are SEAT’s two big brands. But we also develop digital products for the Volkswagen Group and the external market.
On one side, these products are helping us fulfil our own transformation journey inside our company. We run more than 1,000 applications inside our company day to day. These have to be user friendly, future oriented, fast, and data centric. So, we’re using this experience to develop the right digital solutions for our own company.
On the other side, we are developing products, like the mobility platform, to enter new business areas.
Finally, SEAT:CODE and our digital transformation is helping us to transform both IT and the company. We’re coming out of an age of classic car manufacturing, and now we have to transform our company, not only in the IT department, but also throughout the organization. This will mean innovating our different work streams, products, and car development.
How are new technologies and data helping car manufacturers become more agile?
New technologies are really important. 3D printing is something we’re now using in many different areas. It’s used in the R&D department for prototypes, which makes things faster and cheaper, and we’ve used it in some components for the ventilators we have built during the coronavirus crisis. So this kind of technology is helping us a lot.
I personally believe data is the key to the future. Data is the background of everything. We are using customer data to learn about their behavior, what mobility needs they have, and so on.
We’ve even founded a data office which takes care of the different use cases, so, understands the data and uses it to find new business opportunities. We’ve made this investment to ultimately make money from data. This is something I highly recommend for the future and not just for the car industry.
How is SEAT competing with disruptors, like Uber, and other competitors in the market?
I personally see a great opportunity for car manufacturers to not only build cars, but develop digital solutions, and combine both of these worlds. We have a mobility platform with products ready and saleable, and this makes us a very strong competitor in our market. We’re working towards combining these worlds to provide different kinds of packages and optimize mobility in the future.
I don’t see trends like shared mobility as a threat, but it is teaching us a lot. On the other side, it’s definitely a booster for innovation.
The pandemic greatly affected the car industry worldwide. How did SEAT adapt?
The coronavirus crisis created huge challenges, but it’s also been a booster for digitalization. In the past, people would argue against doing a digital workshop. Now, it’s become quite normal.
Our employees are all working from home and still collaborating well as a team. It’s a challenge for sure, but it’s a huge opportunity for digitalization. We’ve even hired and onboarded colleagues completely remotely. We currently have more than 100 employees working remotely as a team on our digital products, which, for me, is a really nice message.
Despite 2020’s challenges, SEAT:CODE made a profit during its first year in business. What do you think influenced this?
Closing the first full business year as a profitable company is something I'm really proud of. It’s showed our company’s leadership that software and digital business is highly profitable.
Our next aim is to show that with a certain amount of digitalization developers, we can create an even bigger impact. I think this isn’t just a dream, it could be reality. Hopefully, our combination of both producing mobility devices and developing mobility digitalization is the perfect fit and will make us successful in the years to come.
Many new initiatives were implemented during the pandemic to ensure the automotive industry’s wheels kept turning – do you think any of these innovations are here to stay?
The pandemic helped us show our digitalization and IT capabilities, and I think we will continue to do this in the years to come. One example of this is, during the lockdown, we were not able to bring customers to the dealers. We needed to rethink the customer experience and find new, digital ways to bring our customers to our products.
We created the CUPRA e-Garage, a virtual garage initiative. This allowed people access to our cars, introduced them to our products and got them excited about sitting in the real car. I think this helped us a lot and we’ll keep it after the pandemic is over, when there’ll be a new normal for digitalization.
I personally believe things will move more into online sales and that we’re coming out of this classical approach of dealer networks. It’s important that we develop the right digital solutions together with our dealers. We want to take these digitalization steps with our partners, not lose them. I believe we can combine these into a strong package.
After 2.5 years at SEAT, you’re now moving back to Audi. What challenges do you expect to face there?
Yes, my next mission is at the headquarters of Audi Sport where I will be responsible as the CEO of Audi Sport. The challenges are mostly the same – electrification and digitalization of the cars. This is a perfect fit for me because I can use what I have learned in my last chapter of digitalization and IT at SEAT but also at Audi IT.
I'm so proud of what the team has done at SEAT and SEAT:CODE in the last two and a half years, and I'm sure they will continue to be successful with this digital journey. But I’m looking forward to the next twist in my in my career because I can combine the classical car business with the digital side. I'm really looking forward to bringing these two together.
Are progressive car companies no longer car companies, but mobility facilitators instead?
I think so, yes. If car companies want to be progressive, and successful in the future, I personally believe they need to develop in the direction of being a mobility facilitator.
For SEAT, this means running a strong ecosystem of different mobility products inside the system, understanding the customer, and always having the perfect solution ready.
What tips do you have for entrepreneurs in the more traditional industries who want to introduce digital tech?
Don't wait. Try small things. We started really, really small in sales. Define the first one or two products that you want to disrupt your traditional business. Then try these out yourself or help your team members and give them the freedom to start using them.
What are the biggest innovation challenges the automotive industry is facing in 2021 and beyond?
Firstly, reaching CO2-neutral mobility. So, continuing the strong electrification journey. Also, making the automotive industry a sustainable sector of industry. These are the two major challenges.
On top of these, the digitalization of our industry. Not only of the product, or of the mobility product itself, but also around the ecosystem. We will definitely continue pushing forward and help SEAT and CUPRA be stronger brands in the future.
This discussion is part of our Disruption Talks, where we invite experts to share their insights on winning innovation strategies, the next generation of disruptors, and scaling digital products. To get unlimited access to this interview and many more, sign up here: www.netguru.com/disruption/talks