How the Automotive Industry Is Shifting Gears with the Metaverse

By Mallikarjuna Sarvepalli

Here are some practical use cases for customer engagement, product development, digital factories and workforce training.

The automotive industry is undergoing rapid transformation that is being driven by digital-only auto sellers, changing consumer needs, a rise in connected experiences and the emergence of a sharing economy. With rising operational costs and customer expectations, the metaverse—a virtual world that mimics the physical world via artificial intelligence (AI), virtual reality (VR), augmented reality (AR), digital currencies, social media and other technologies—is emerging as a key enabler to accelerate growth, improve margins and create immersive experiences to deliver customer delight across multiple touch points.

A Gartner study predicts that 25 percent of people will spend at least an hour a day in the metaverse by 2026, thereby creating more opportunities for customer engagement. The global metaverse automotive market is estimated to be valued at more than $116.5 billion by 2030, at a CAGR of more than 41.46 percent. Across the globe, automotive companies are making a leap into the metaverse with the launch of virtual experience centers, virtual factories and collaborative workforce training to connect with Gen Z customers and streamline operations with lower costs. Some of the key use cases for automotive companies to look out for are as follows:

Virtual Dealerships and Experience Centers

Mallikarjuna Sarvepalli

Mallikarjuna Sarvepalli

Studies have found that virtual showrooms can lead to higher engagement and can improve the average time spent by potential buyers tenfold. Virtual dealerships and experience centers carry the potential to create a truly memorable experience that can go viral and get potential buyers discussing the launch of an upcoming vehicle. Benefits include:

  • Engagement: personalized and real-time engagement with sales teams. Invite friends and family to join the sales process.
  • Experience: visualize and interact with vehicles in the virtual world. Prospects can interact with in-vehicle infotainment systems, accessories, etc.
  • Marketing: prospects can interact with other potential buyers and owners.
  • Branding: Create user communities. Buy or sell nonfungible token (NFT)-based merchandise, as well as loyalty and reward programs, to create personalized rooms for NFTs. Organize product launches in the metaverse.


The term "metafactory" refers to the digital twin of an actual plant in the metaverse to support product innovation and operations. Such factories can:

  • Simulate plant operations and enable managers to solve problems without a physical visit to the factory.
  • Connect experts with field workers remotely to reduce error rates and minimize operational costs.
  • Collaborate with product designers in virtual worlds to create, simulate and test different models before moving to production. This can help to improve product quality and reduce manufacturing costs.

Live Events

Morning Survey reports that 61 percent of Millennials are interested in attending live concerts in the metaverse. Hence, there is a great potential to organize events, concerts, webinars, trade shows and product launches in the metaverse by blending the best of in-person experiences and online capabilities. Such events can provide:

  • Three hundred sixty-degree live streaming to bring events from the physical world to the metaverse
  • Simulated virtual booths mirroring physical layouts
  • Collaboration with participants, speakers and organizers

Workforce Training

In the manufacturing world, training the workforce can be an extremely demanding process with significant risks to people and machinery. Traditional methodologies are not cost-effective and are found to have low retention levels. With simulated equipment and guided assistance, workers can be trained in virtual environments to foster greater engagement and retention. Virtual training can be delivered four times faster, while simulated training can have a 75 percent retention rate and achieve cost reductions of up to 33 percent. Benefits include:

  • Experience group training: extending today's VR applications that create individual experiences only
  • Virtual guides with step-by-step instructions
  • Interactions with trainers and colleagues
  • Simulations and scenario creations around plant operations and safety response procedures

In-World Advertising

According to Bloomberg, the metaverse advertising market may be valued at $53.7 billion by 2024. Such advertising will be similar to in-game advertising, with virtual billboards and sponsored content. VR and mixed reality (MR) headsets provide additional dimensions to understand customer behavior. In-world advertising improves brand awareness specifically with the younger generation. This can include:

  • Virtual billboards installed at designated locations to measure viewability
  • Sponsorships where brands can sponsor wearables for avatars, environments, events, etc.
  • Additional insights into user engagement, such as emotions with eye, face and head tracking

While the metaverse as a technology is still nascent and evolving rapidly, initial results are promising. For example, NVIDIA's Omniverse platform provided BMW with a 30 percent boost in production planning efficiency. However, there are challenges that need to be solved for mass adoption, which include the maturity of VR and MR headsets, a lack of open standards, privacy concerns, and a lack of mature and robust platforms. As these challenges are addressed, the opportunity is ripe to foster newer and more innovative customer experiences in the metaverse.

Redefining Customer Engagement

Especially for business-to-consumer brands that are looking to tap into the Millennial and Gen-Z markets, the metaverse has the potential to radically redefine customer engagement. The automobile industry is on the verge of its own inflection point, as electric cars are expected to become the new normal in the next decade, while self-driven cars aren't too far away either. This would require automobile companies to not only evolve their product development and manufacturing practices, but also redesign their sales and customer-engagement strategies to sell to an audience with different sensibilities.

The metaverse is surely a step in the right direction for automotive companies, as it enables them to address both these changes effectively. On the shop floor, for instance, they can tap into the varied benefits of digital twins and VR-enabled trainings to improve manufacturing and operational efficiencies. On the other hand, they can also bolster their marketing and sales programs by embracing other components like immersive virtual platforms, simulation setups and NFTs, to create highly personalized brand experiences at scale.

Mallikarjuna Sarvepalli is the head of mobility and extended reality (XR) practice for the product engineering business at Happiest Minds. He is responsible for setting and driving the strategy, capability building and creation of technology offerings. Mallik is a core part of the team driving the metaverse charter at Happiest Minds, and his focus is on interacting with companies from varied industries to help them build the right metaverse-enabled solutions for their customers. Mallik brings more than 20 years of experience in information technology, and his areas of interests include metaverse, XR, Web 3.0, blockchain and cybersecurity.