Imagine a world where a car’s interior, and the accompanying cabin experience, are two of the most important vehicle differentiators. In this world, affiliates of a vehicle brand are not waiting for the next start of production of a vehicle but for the next operating-system update; OEM CEOs introduce new human-machine-interface (HMI) systems as stand-alone products to as much anticipation and fanfare as new models; and car magazines discuss comfort levels rather than acceleration and horsepower. This world is now emerging within the automotive industry, and it will transform how OEMs make and market cars.
Very soon, the cabin experience is expected to take the spotlight away from automotive elements that have traditionally dominated headlines, including engine performance, exterior design, and powertrains. The rapidly evolving ACES megatrends—automation, connectivity, electrification, and shared services—will change the configuration of cars and allow vehicle occupants to enjoy new experiences during trips.
To assess the growing importance of vehicle interiors, we reviewed insights from eight sources. These included an analysis of the interiors of over 50 current and concept vehicles; roundtable discussions and in-depth expert interviews with over 60 decision makers from 25 leading players; various consumer surveys; and panel discussions with automotive experts. We also analyzed mobility patterns by customer segment and drew on our work with automotive companies on vehicle interiors, connectivity, HMI, and the customer experience.
Our research clearly revealed the growing significance of vehicle interiors and the in-car experience. For instance, a survey revealed that 71 percent of automotive executives expect vehicle interiors to become more important, while only 38 percent held the same views about vehicle exteriors.1
Trends transforming vehicle interiors
In our article, “The future of interior in automotive,” we examine the implications of this research, focusing on two areas. First, we review the evolution of vehicle interiors in response to five forces (exhibit). One basic shift involves the emergence of new vehicle types, including electric vehicles, which will have a massive effect on interior layouts and could enable features that were previously unimaginable, such as swivel seats. Similarly, innovations in connectivity and HMI could alter the cabin experience. For instance, automated assistants might have an improved ability to respond to the voices of all passengers. The cabin itself will become more comfortable, with OEMs providing more “homelike” trim, such as seats that resemble those in a living room, or other features that enhance the driving experience, such as automatic climate-control systems. As OEMs experiment with new interiors, they must keep sustainability issues in mind, since customers are increasingly concerned about decarbonization. Cost control will also be critical, especially for features that are not readily visible or do not add value.
Would you like to learn more about the McKinsey Center for Future Mobility?
After discussing innovations in vehicle interiors, our article describes five strategic imperatives for OEMs and suppliers that will emerge in response to these trends, including:
- gaining greater knowledge of HMI technology, over-the-air (OTA) capabilities, and future materials
- rethinking and accelerating the journey from concept to cabin
- reducing complexity to optimize costs and increase customer convenience
- making the customer experience a top priority across the organization
- establishing new forms of partnerships and cooperation to connect required capabilities in an increasingly complex cabin
Next steps for industry stakeholders
As vehicle interiors evolve, OEMs and suppliers should consider how to position themselves for future success. With new players catching up or even leading in connectivity and interior experience, established players cannot rely on their past reputations and must instead articulate their future vision. For players across the value chain, key strategic questions will include the following:
- For suppliers: How can we support an OEM with innovations? Are we a component, systems, or a solutions player? What is the most promising positioning for us in a changing value chain?
- For OEMs: How do we best understand our users’ needs and put them at the center of an ecosystem we can only partly shape? How can we best work together with managed-services providers that design the cars, or with mobility service providers that will demand purpose-built interiors, while simultaneously developing a vehicle of our own?
- For content providers: How can a video be optimized for various displays? How can the impact of advertisement/promotions be increased in a next-generation vehicle without distracting the driver?
Why the automotive future is electric
The specific approach that an OEM or supplier will take depends significantly on the company’s current capabilities and competitive position as well as its aspirations for the future. To some degree, however, every company with a stake in automotive interiors will at least need to consider taking action in the areas mentioned above. In one way or another, the previously described strategies speak to capacity (investments and partnerships) or efficiency (agile processes and complexity reduction) and the OEMs and suppliers that get it right in these areas will be best positioned to reap the value of differentiation in the area of vehicle interiors.
