The Device Chronicle interviews Luigi Forcelli, Head of Technical and Warranty at Lotus Cars Europe on after-sales service and the role of OTA software updates.
This is part of a series of video interviews with business leaders in the automotive industry. Read other interesting strategy articles on software-defined vehicles and OTA from automotive OEM executives Mark Gerban and Leonel Leal.
These interviews build on top of recent work by Northern Tech CTO and Mender co-founder Eystein Måløy Stenberg to lay out the essential requirements for efficient, robust, and secure OTA updates. These are important in light of the new cybersecurity standards for automotive, including ISO/SAE 21434 and UNECE R155/R156.
Luigi as strategic leader for warranty and after-sales operations at Lotus Cars Europe is creating bottom line impact through targeted automotive after sales and operation management initiatives that are aligned with the organizational objectives. Luigi also has a very strong interdisciplinary background in product management, business process management, vehicle after-sales out in the field, and telematics, and is educated in electronics engineering.
From automotive to telematics and back again
As an electronic engineer, Luigi explains that he always had a passion for automotive. He started his career in Italy working on projects related to Fiat Chrysler automobiles for a large consultancy company called MSX International. While at MSX, Luigi had the opportunity to work for almost all the OEMs active in Europe and immerse himself fully in after-sales in different contexts. Luigi moved from automotive into telematics still in Italy and then back into automotive OEMs with MG Motors where he oversaw the implementation of MG’s European network of after-sales managers. There he learned about electric vehicles and new approaches in customer management, and management of the after-sales network in a very fast paced environment, typical of a Chinese organization. After two years of experience with MG, Luigi joined Lotus Cars Europe where for the past two years he has led technical and warranty strategy and operations.
OTA, recall & cost savings potential
Chapter 1 - OTA for cost savings & customer satisfaction
As a prelude to this interview, the topic OTA as a major cost saving opportunity for the automotive OEMs was discussed. It was highlighted how Ford saved $20 million in performing an after sales OTA update to resolve a battery issue. The magnitude of cost involved in after-sales vehicle recalls and software updates was also discussed. In the US market alone, $7.5 billion per annum is spent on software recalls for vehicles per year with a cost of $300 and $500 per vehicle recall and 15 million vehicles affected. This of course affects how much capital the automakers must keep in reserve to cater for this. OTA updates can save drivers trips to the dealerships for safety updates, mandated by safety authorities such as the National Highway Traffic Safety Administration in the US. In 2020, there were 30 million recalls in the US and 50% of those recalls were for software or for electronics related defects and 300 recall campaigns were issued by automakers. Only five of those campaigns used software updates to fix the problem.
Following on from these important statistics, Luigi confirms that ensuring the safety and the satisfaction of the customer is of great importance. But in the context of the European market, this presents a unique set of challenges.
Luigi remarks that with such a diverse range of regulations and standards across countries, maintaining compliance and addressing safety concerns in a short time is really crucial for Lotus Cars Europe. He continues to say that the implementation of OTA updates has been transformative in helping Lotus Cars Europe to address this challenge. “The Lotus Cars Europe OTA strategy plays a crucial role in this by enabling it to remotely address issues, implement safety updates, enhance vehicle performances, all these without creating too much trouble for our customers.” This allows it to proactively manage recalls, ensuring a swift and efficient response to any potential concerns. And in the end, Luigi concludes, it contributes to a safer driver experience for Lotus customers across Europe and the World.
Chapter 2 - OTA in warranty & after-sales strategy
Luigi says that incorporating OTA software updates into its technical and warranty strategy has been a game changer for Lotus Cars Europe. It is a strategic move that goes beyond the obvious cost savings associated with reducing the physical reports or the service visits, as it allows the automaker to streamline its after sales strategy in a different way. Luigi says “By addressing issues remotely, we not only save on operational costs but can also enhance customer satisfaction.” This approach aligns with Lotus Cars Europe’s commitment to provide a premium ownership experience where customers in the end benefit from the latest features and improvements delivered to their vehicles. “This is not only an announcement of the customer experience again, but also grants us the ability to provide proactive maintenance or upgrades that are tailored to individual vehicles or groups of vehicles.” Luigi believes this is clearly a win-win situation that enables Lotus to be more and more agile in responding to technical challenges while optimizing its resources effectively. “So it's not just about having projections on cost savings from after sales OTA, but it's also about looking at predictive maintenance and an increased customer satisfaction.”
Chapter 3 - Value of OTA
Luigi could not disclose specific figures on the cost savings that Lotus would realize from OTA, but he could confidently say that the cost savings from OTA would be substantial. He points out that “By minimizing the need for physical records and service intervention, operational efficiency can be optimized and the associated costs reduced. Moreover, the ability to address software-related issues remotely translates into significant time and resource savings, especially when the impact software has in the modern automotive environment is considered.”
Chapter 4 - Next generation automotive grade OTA updates
Luigi concludes the interview by saying that the future of OTA updates will see Lotus Cars Europe becoming more and more selective in targeting specific vehicles, increasing the possibility for an ever-greater customization.He concludes “It's an ongoing process of improvement with continual internal assessment and refining of strategy to ensure maximum efficiency and value, both for Lotus customers and the business itself.”
Luigi highlights the four most important capabilities in next generation automotive-grade OTA:
- Robust cybersecurity and ensuring the integrity of the update process
- Interface that keeps the customer engaged and informed during the update process
- Flexible and scalable update architecture to adapt to evolving technologies
- Advanced data analytics capabilities to track vehicle performance, user preferences and potential issues