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Artificial Intelligence

AI could help boost carmakers’ return on investment

A new study by McKinsey finds that up to 9% more added value is possible with the help of AI systems – including automated quality control in manufacturing.

20 Jan. 2018
Roland Freist
Auto 2
AI could help boost carmakers’ return on investment

For the study entitled “Artificial intelligence – automotive’s new value-creating engine” McKinsey interviewed more than 100 industry and AI experts and analyzed the effects of machine learning on automakers. The findings suggest that the automotive industry could create up to $215 billion of additional value worldwide by 2025. That would boost their return (EBIT) by about 9%.

The biggest part of this is attributable to possible savings in production. According to McKinsey, measures such as AI-based quality control could reduce production costs by as much as $61 billion. Purchasing could contribute around $51 billion, thanks for example to systems that enhance supply market transparency. The analysts see further opportunities for the use of artificial intelligence and machine learning in intralogistics, where, for example, just-in-time deliveries straight to the production line could be automated. Finally, the study authors consider increased returns of up to $31 billion possible in marketing and sales. The major part of this would result from converted pricing systems and from AI-based recommendations.

The annual increase in returns is currently about 2% in the automotive industry, explains a McKinsey analyst. The use of artificial intelligence could boost productivity growth by about 1.3%.