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Car Talk: How VoIP Impacts the Automotive Industry
August 16th, 2017

Car Talk: How VoIP Impacts the Automotive Industry

Ian Linton

VoIP provides the essential tools that support collaboration and secure exchange of information, that are vital to the survival of the automotive industry.

The automotive industry is a global business in every sense of the word. The major players market their products with local variations in territories around the world. And they draw on suppliers and partners from many different countries to produce vehicles for global sale.

US automotive businesses face competition in domestic and export markets from organizations in the Far East and Europe, in addition to other US firms. But, they also cooperate with many of their competitors, sharing products such as engines, drive components or body panels. And increasingly, they partner with companies outside the traditional industry framework to incorporate the technologies that customers expect and demand.

This global business needs efficient, low-cost communications to maintain the flow of information between various parties and customers. VoIP provides the essential tools that support collaboration and secure exchange of information.

How VoIP impacts the automotive industry

Complex industry structure

Consumers may see the automotive industry in terms of high-profile brands, such as Ford, GM, Nissan, Honda, Renault or VW, however, the industry is more complex. Under the main brands are many sub-brands or brands owned by the leaders. Each manufacturer has a tightly structured supply chain of tiered suppliers and a network of franchised dealers selling vehicles to individuals or businesses.

There is also a very large aftermarket with parts, service, and repairs provided by franchised distributors or independent operators. Manufacturers operate large marketing departments that release regular communications with business and personal customers, distributors and the media to maintain a high brand profile. VoIP can support complex communications processes while controlling costs and enabling high levels of collaboration.

Supply chain coordination

The automotive industry has a highly developed supply chain structure with suppliers grouped into tiers according to their capabilities and the importance of their components.

Tier 1 suppliers work on long-term contracts and provide essential components such as engines, drive trains, and body panels. In some cases, suppliers develop strategic products that manufacturers share to control development costs. Tier 1 suppliers may also work as part of the product development team. This team provides expertise in materials, technology or engineering. Tier 2 suppliers provide components to Tier 1 suppliers, and there are further tiers below supplying raw materials and other components.

Like any supply chain, the automotive network requires high levels of secure information exchange and collaboration. At the Tier 1 level, security is critical, and VoIP over private Internet connections combines the flexibility and reach of the Internet with the protection of private networking.

Extending the ecosystem

The network of suppliers and partners supporting automotive manufacturers is known as a business ecosystem. The manufacturer acts as a leader setting objectives and requirements, and coordinating the activities of the members. Ecosystem members benefit from greater access to market opportunities and a mutually beneficial relationship with other participants. VoIP supports secure, efficient communications between members and can be easily extended to new participants.

A recent report by the consultancy McKinsey highlights the growing influence of new players in the traditional industry structure. These companies provide the technologies that customers expect now or in the near future, such as systems for electric or hybrid cars, and connectivity components and solutions for driverless cars. Extending communications and collaboration to these businesses with VoIP lets them fully participate in the ecosystem.

Multinational operations

Many automotive businesses operate across multiple sites in the US or around the world. Some are multinational companies, setting up offices in key territories to provide a strong local presence. Others may coordinate their international operations from a global headquarters with visiting staff or a small team based in the country.

By deploying VoIP in each location, these companies can see significant savings in their inter-site calling costs because calls are free between connected sites. And to reduce the time and cost of travel between locations, companies can use VoIP’s audio or video conferencing facilities to hold scheduled business meetings and maintain high levels of control.

Product development

New product development is a long-term project in the automotive industry. Manufacturers release all-new models at three to four-year intervals but offer updated versions or new features (known as “facelifts”) more frequently to stimulate sales. Product development means high levels of collaboration within the company and with external suppliers and partners.

VoIP supports that collaboration with easy-to-use video and web conferencing tools available on high-end desk phones, PCs, tablets, laptops, and smartphones, and it enables teams to collaborate in virtual meeting rooms with no need for dedicated facilities.

Participants can share screens to review reports, models, prototypes, presentations, project plans and other documents or visual content. Outside of the scheduled meeting, team members can share or exchange information or communicate via a choice of text, email, messages and chat with all messages accessible through a single inbox.

Product launch

The climax of the development process is the product launch, and as it approaches, activity and communication levels increase. More media inquiries, briefing sessions for the sales force and dealer network, coordination of the supply chain and logistics operations, and planning sessions between marketing and product development put a strain on telecom’s capacity.

However, VoIP can scale in line with demand, with no need to install surplus capacity or invest in additional fixed-line capacity that will later be redundant. VoIP’s virtual lines are available on-demand and can be scaled as needed.

Fleet sales

Fleet sales to business customers are vital to automotive manufacturers and distributors. A successful fleet sales campaign can lead to orders for hundreds or even thousands of vehicles. To build and maintain relationships with fleet customers, manufacturers appoint senior account managers. VoIP can help account managers provide a higher level of service to their customers.

By using business rules to prioritize incoming calls and route them to members of the account manager’s team, VoIP can ensure fleet customers get a prompt response. The system can also forward calls to ring on a number of devices simultaneously so that the account manager is always in contact for urgent calls.

VoIP’s data capability on smartphones lets account managers access presentations, customer and product details or up-to-date information on outstanding issues before meetings. They can also transmit visit reports or requests for action.

Dealer communications

Franchised dealers are the main link between manufacturers, consumers and business customers. Their role is to hold stock and carry out sales, marketing, and aftersales functions for manufacturers.

VoIP supports routine communications between manufacturers and dealers with different options for placing orders, for product or technical inquiries and for reporting sales. Manufacturers can use VoIP’s conferencing features to hold regular sales and progress meetings or to deliver a product, technical and marketing training.

Dealers can use VOIP’s notification features to run promotional and relationship-building campaigns, customized to different sectors of the market. Contact centers can use VOIP’s intelligent routing features to identify incoming call locations and route inquiries to the appropriate local dealer. This gives customers the convenience of a single number without having to search for local contact details.

Parts and service operations

Aftersales operations play an important role in retaining customer loyalty between vehicle purchases. Customers might replace their vehicles every two to three years or longer, so manufacturers and dealers need to maintain contact in the period between sales. Scheduled servicing, repairs, and sales of parts and accessories provide the opportunity to contact and deal with customers during that period.

However, franchised dealers face competition from independent outlets that may offer lower prices and faster service. Dealers must, therefore, compete on quality and customer service to retain business. VoIP supports this in a number of ways. Its notification features, coupled with CRM integration, let dealer marketing teams send scheduled service reminders or personalized offers such as winter checks or accessories by customers’ preferred channels. And VoIP’s multi-channel contact center solutions make it easy for customers to book service or repairs and get status updates on the work.

Customer service

VoIP’s multi-channel contact center solution helps automotive businesses deliver quality service to their customers. Manufacturers can reduce costs and simplify operations by centralizing contact centers and offering a virtual local service. They can either provide customers with a single number or offer a series of virtual local numbers that reduce costs for callers.

Callers can make contact through their preferred channel or use self-service features for simple requests such as brochures, model, and option information, or contact details for the dealer network.

Businesses with global operations have the option of running a central service with virtual agents providing cover for local business hours, or setting up local centers and managing them from a head office. VoIP’s data capability allows local contact centers to receive customer information from a central CRM system and feedback performance data can be sent to central supervisors.

VoIP for growing businesses

Although the automotive industry is dominated by large global players, it supports large numbers of smaller suppliers and sub-contractors providing specialist skills or services.

VoIP is available as a hosted service, allowing smaller businesses to access advanced solutions and communicate efficiently with other industry members. VoIP eliminates the restrictions of fixed-line legacy systems and allows businesses of any size to compete effectively in this collaborative industry.


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