Advancements and Implications of Product Service Systems in the Automobile Industry: A Comprehensive Review ^†

Abstract

This research paper explains how, in the last twenty years, the study and research of product service systems (PSSs) in the automobile sphere has experienced high growth due to its unique approach in enriching customer value and experience, strengthening product competence for both customers and providers, and facilitating improved control and management over the product lifecycle. The review of the literature for the automobile sphere is classified into four categories: (i) numbers of publications per year, (ii) journal-specific publications, (iii) year-wise publications, and (iv) growth of research based on applied techniques. The integration of additional services proves instrumental in improving product design, optimizing operations, and offering innovative new services. Additionally, this paper explains how the product service system (PSS) plays an important role in enriching outcomes from customers, efficiency of the product, and lifecycle management. Its future scope lies in integration and fostering innovative ideas, improved customer service, and performance-based contracts because PSSs can drive long-term relationships, trust, and growth in the industry. The paper emphasizes the importance of user-centered design and innovative business models. The primary objective of this review paper is to provide a comprehensive analysis of product service systems (PSSs) in the automobile industry, focusing on progress, challenges, and opportunities, with the aim of responding to the evolution of consumer behavior through innovative innovations such as digitalization and sustainability integration.

1. Introduction

With the growing demands of the environmental and economic sectors, the reliance on product service systems in various industrial sectors is increasing significantly and resulting in the benefits of environmental protection, sustainability promotion, and economic prosperity [1]. Thus, we need to switch to more sustainable trending and affordable sources. A product service system (PSS) serves a variety of purposes and benefits in the industrial sector. First, it provides comprehensive solutions for physical products that enhance customer value for sustainable resource management, offering insights and a tactical framework for the adoption and success of PSSs [2,3].

A PSS provides added value to customers and helps in building stronger relationships with customers by integrating various services (maintenance, repairs, upgrades, and training) [4]. Second, it increases the efficiency of products for both the provider and the customer, reducing the expense of equipment purchased by choosing equipment services in the form of lease or subscription, thereby reducing wastage, paid usage, and allocation of resources [4]. Third, over the entire lifecycle of products, better control and management is enabled, resulting in the reduction of waste, compliance with environmental regulations, and resource consumption [4]. This results in linear material growth paradigms, sustainability through product service systems, and analysis of their impact on environment and drivers’ adoption [4,5].

Overall, a PSS encourages long-term relationships between customers, consumers, and manufacturers; this association creates trust, loyalty, and potential sales opportunities. It also provides flexible solutions and various types of customizations as per customer needs by integrating additional services to meet specific requirements, resulting in customer satisfaction and the changing demands of the market. Also, a data-driven approach helps to improve the design of products, optimize operations, and offer new services [1,3].

In the automobile industry, implementing PSSs offers an opportunity to reduce ecological impacts for mobility in a holistic manner and could revolutionize access, use, and maintenance of vehicles. Some major PSS uses in the automobile sector are (i) car-sharing programs [4], (ii) subscription-based models [4], (iii) mobility as a service (MaaS) [4], (iv) vehicle maintenance and servicing [4], (v) connected vehicle services [4], (vi) electric vehicles charging stations [4], and (vii) fleet management [4]. In the electric vehicle industry, PSS implementation plays a key role in promoting adoption and widespread use [4]. Product service systems (PSSs) have emerged as a transformative solution, shifting the focus from ownership to tailored mobility services. This review delves into the profound impact of PSSs in the automobile sector, highlighting their ability to enhance customer experiences, streamline product efficiency, and foster sustainable growth [6]. We explore the challenges and opportunities, emphasizing the need for coordination among manufacturers, service providers, and regulators, as well as the shift in consumer behavior towards shared mobility. This comprehensive examination unveils the promising future of PSSs in shaping the mobility solutions of tomorrow. The ever-evolving landscape of the automobile industry demands innovative approaches [7]. This literature review is aimed at answering the following research questions:

RQ1: How has research on product service systems in the automobile industrial sector been affecting the industry over the years?

RQ2: What is the trend of research on product service systems in the automobile industrial sector?

RQ3: What are the key technologies being studied by researchers to develop PSSs in the automobile industry?

2. Methodology

The research approach used in this review is divided into 5 phases, with the 1st phase being the selection of time (2004–present). The year 2004 was chosen as the starting point for the article collection since it was in this year that the term “product service system” first emerged. The 2nd phase was to gather research publications, which were chosen from management science publishers like Scopus. In the 3rd phase, we searched the database for research publications using keywords like product service system (PSS), PSSs in the industry domain, and PSSs in the automobile industry. Separation or sorting of publications to remove duplicate articles was the 4th phase, followed by analysis of the articles that were filtered. The last phase classified selected articles under several categories: year-wise empirical research growth, year-wise publication with different publishers, and product service system (PSS) categorization based on strategies to improve market performance.

Phase 1: Time horizon selection (1993 to early 2023): the assessment period for research publications is between 1993 and early 2021, as the keyword “product service system (PSS)” first appeared in 2004 (this time horizon was later curtailed to the year 2014 for research related to product service system). Early 2014 is the terminating point of research publication collection.

Phase 2: Research publications collection: Research publications were chosen from one of the leading databases for academic publication, i.e., Scopus. This database includes the most well-known journals, shown in Figure 1.

Phase 3: We searched keywords for research publication selection; the keywords selected for research publication from the database were number of research publication per year, year-wise empirical research growth, year-wise publication with different publishers, and product service system (PSS) categorization based on strategies to improve market performance In total, 293 articles were filtered by using the above keywords.

Phase 4: Sorting of research publications was carried out on the following basis of:

• A new time period was introduced for product service system in the automobile industry from 2004 to 2023.
• Drawing only relevant publications: The sample size was reduced in this phase to create a representative sample set, for which the following policy was adopted. At the very least, the scientific publisher should be concerned with our subject area. A total of 293 publication results were left from the aforesaid revised in Figure 1.
• A new time period was introduced for product service system in the automobile industry, from 2014 to present.

This model of product service systems offers several benefits to customers, consumers, and manufacturers. Some major advantages include cost savings, convenience and flexibility, improved customer experience, access to the latest technology, environmental sustainability, long-term customer relationships, different business opportunities, data-driven insights, different types of collaboration and partnerships, and social and customer benefits.

A few industries are exploring new domains for their products and their service so that they can increase their value in the market. Research is focused on the integration of products and services to create sustainable and innovative solutions, known as product service systems (PSSs) in the automobile industry. Automotive companies in this sector can move from selling traditional vehicles to providing mobility services and solutions. Research results contribute to increasing transport efficiency, reducing carbon emissions, and creating a seamless and personalized mobility experience for users. By examining customer preferences, operational challenges, and technological advancements, researchers in this field aim to develop strategies, business models, and policy recommendations to transform the automobile industry into a more service-oriented, eco-friendly, and customer-centric ecosystem. This research area examines the design and development of mobility platforms such as car-sharing or ride-hailing services, as well as the implementation of value-added services such as predictive maintenance, remote diagnostics, and personalized in-car experience.

3. Results and Discussion

3.1. Growth of Product Service Systems in the Automobile Sector

This section shows the annual research publishing frequency of all research publications. In the 1990s, product service systems turned out to be a research hotspot as a promising anode possibility for PSSs. But since 2004, interest in the product service system has substantially waned. The yearly publications reveal that the research in the field of product service systems in the automobile industry is growing continuously. Also, there is a significant rise in total number of publications from the year 2014, and this can be due to the realization of product service systems (PSSs) having an overall high capacity and strong stability during cyclic performance. Therefore, a rekindled research interest in product service systems in the industry is observed from the year 2014, but in automobiles it was first delved into in the year 2019. Figure 2 shows that annual publications have increased substantially.

3.2. Year-Wise Publication with Different Publishers

Figure 3 expresses the interest of author publications on product service systems for the automobile domain in the last 20 years in conference papers and articles.

3.3. Product Service System (PSS) Categorization Based on Strategies to Improve Market Performance

A product service system (PSS) is a business model that combines products and their related services to meet customer needs and value delivery. There are different types of PSS categories: (i) product-oriented, (ii) use-oriented, and (iii) result-oriented as shown in Figure 4. In product-oriented services, the primary offering is direct products, and additional services are secondary. Use-oriented services focus on the product use and use-related services for enhancing product usability and maximum driven value. Result-oriented services aim to deliver specific outcomes and benefits to customers. The results aim to achieve measurable results rather than just selling including customized solutions, performance guarantees, and continuous monitoring.

3.4. Contribution towards Research

After we carried out an extensive research paper literature review, we categorized some of the common findings for various product service systems (PSSs) into product-oriented PSSs, use-oriented PSSs, and result-oriented PSSs. Below are the comprehensive results, analysis, outcome, and discussions for each PSS category of research, mainly focused on use-oriented and result-oriented approaches.

3.4.1. Product-Oriented Product Service Systems

Panel Dong Wu et al. focused on a business model in a circular economy, emphasizing customers paying for a product’s functionality, not the full vehicle. They also explained the important role of digital technology (DT) [7]. Coralie Muylaert et al. focused on the barriers and problems that customers face during adoption and retention that impact the viability and success of PSS models. In their paper, utilization of social practice theory (SPT) and habitual practice approach take place [8]. T.S. Braines et al. focused on smart product service systems, utilizing the outcomes and results of transitioning to sustainable smart PSSs. In their paper, they approached the conceptualization of the casual link and aimed to develop a framework for this [9].

The product-oriented product service system is continuous evolving and integrating different upgraded technology to enhance value and sustainability: IoT integration, AI and ML integration, augmented reality and virtual reality integration, cloud-based services, and many more result in sustainability considerations and customer-centric approaches.

3.4.2. Use-Oriented Product Service Systems

In this type of research, utilization of products and related services for meeting customer needs and requirements are necessary for delivering desired functionality and outcomes, rather than selling. The main outcomes are customer-centric, and designing sustainable business models that result in a customer-centric approach, value creation, long-lasting relationships, sustainable practices, business differentiation, revenue diversification, and innovation opportunities with flexibility and adaptability. The following authors have expressed their interest in use-oriented product service systems in the automobile sector.

Xianyu Zhang et al. introduced the CPMS (customer platform connection manufacturing to service) model, meeting individual customer needs, improvement in capacity of production, and cost reduction [10]. Sergio Cherubini et al. explored PSSs in the EV car industry and identified and implemented CSF for effective management. Their research identified four subsystems of PSSs in marketing and 10 CSFs, emphasizing the importance of collaboration among different actors for market development [11]. Harald Overholm et al. discussed business models for increasing sustainability, which enables firms to sell the functionality of a product instead of the product itself, resulting in durable products, effective repair and maintenance regimes, and obsolescence plans [12]. Vimal Kumar et al. focused on an automobile steel-plate-shearing line and applied the methodology and tools of Six Sigma management, which resulted in improvement in machinery accuracy [13]. Jeremy S. Liang et al. focused on developing a PSS-oriented automotive troubleshooting mode that shifted from a traditional to a service-oriented approach in the automotive industry. Their study focused on expansion of manufacturers’ duties in the product’s service life, specifically by providing car troubleshooting services to end users [14]. Axel Ensslen et al. focused on interconnection charging infrastructure and additional services for plug-in electric vehicles (PEVs) and e-mobility PSSs, involving utilization of products and related services for meeting users’ needs [15]. Elaheh Maleki et al. focused on improvement of service provision for industrial PSSs by integrating and adopting CPS components for meeting users’ needs [16]. E Uhlmann et al. focused on fulfilling customer needs by introducing industrial PSSs and also discussed the modeling and automation of IPSS delivery processes to ensure economic and smooth operations [17].

In the automobile industry, use-oriented product service systems hold important parameters: digitalization integration, IoT integration and other security measures for enhancing customer experience and security, predictive maintenance, customization and personalization, data-driven decision making, remote upgradation and other sustainable practices for new revenue generation, improved efficiency, and innovative services, as well as customer satisfaction.

3.4.3. Result-Oriented Product Service Systems

This type of product service system approach plays an important role in specific outcomes or results for customers or users, where measurable and tangible results take priority rather than products and services. The importance of this approach is goal achievement, measurable impacts, customer-centric solutions, increased value propagation, impacts on sustainability, performance-based contracts, and others.

Xianyu Wang et al. promoted blockchain technology for value-added services during the stages of vehicles: issues with old vehicles, preventing fraud and scams, and trust issues: immutability, transparency, security, and traceability [18]. Arnold Tukker et al. focused on providing outcomes for users and promoting sustainability that aligned with the result-oriented PSS characteristics and addressed key barriers for stability perspective by implementation and highlighting functional PSSs [2]. Sergio Cherubini et al. identified the critical success factor (CSF) in marketing for improving managerial practices in the industry and increasing the spread of electric cars [11]. Maurizio Catulli et al. focused on sociocultural aspects of consumption in product service systems to explore how consumers’ needs for self-identity and social affiliation through consumption are shaped [19]. Andrew Williams et al. examined PSSs and planned initiatives based on key evaluation criteria to assess their contribution towards sustainability challenges. The evaluative research gave a structured view of planned and current PSS initiatives and analyzed their actual and potential contributions to system innovation [20]. A Williams et al. adopted MFR (micro-factory retailing) for unification of manufacturing commence functions and small-scale localized manufacturing sites, which have advantages over prevailing visions of PSSs [21]. Mario Fargnoli et al. focused on the integration of solution-oriented partnerships (SOPs) between companies and stakeholders that propose systematic solutions for the co-evaluation of industrial production and social patterns [22]. Danni Chang et al. focused on modifying the traditional and cultural production system to achieve a society with sustainability, where the goal is a sustainable result rather than products and their use [23].

In result-oriented product service system approaches, as per feedback from customers, (i) by customizing products and related services to meet the needs of the individual, customer-centric solutions lead to customer satisfaction and loyalty; (ii) the guarantee of the product and its services, including performance, will deliver desired results so that more customers are willing to invest in it; (iii) sustainability leads to more efficient resources and environmentally friendly practices; (iv) many other approaches as per customer feedback, include new innovations, market differentiation, expansion of services, and many more. The future scope is promising and is driven by advancements in technology and changing preferences; some developments are advanced connectivity, integration of AI and ML, autonomous vehicles, and more.

4. Conclusions

After an in-depth analysis of product service systems (PSSs), this study has several important implications for research and development, key aspects, challenges, and future scope for improvement. It begins with the analysis of two areas of study: product service systems in the industrial domain and in the automobile industry (electric vehicle) [1]. This approach is characterized by factor identification in the product service system. A new trend of product service systems (PSS) has the potential to reduce the environmental impacts of both production and the environment in which it is consumed [7]. This article attempts to create a theoretical framework for PSSs and serves as a background for identifying potential investment needs in studying them. There are three main uncertainties regarding the applicability and feasibility of PSSs: the readiness of companies to adopt them, the readiness of consumers to accept them, and their environmental impact. The main finding is that successful PSSs will require different social infrastructures, human structures, and organizational layouts to work permanently. There are only a few examples of complete PSSs based on lifecycle in companies, and many examples of eco-design, optimization of distribution, product customization, added services, remanufacturing and recycling, and take-back systems. PSS uncertainties can be combined into categories: adopting PSSs in companies’ strategic decisions, acceptance of PSSs by consumers, and proper environment characteristics. The earlier study proves that in traditional automobile and automotive companies, integration of PSSs for leading value propositions and business model improvement is very beneficial. Some of the key findings are as follows.

Traditional automobile and automotive companies can increase satisfaction of the customer along with traditional vehicle sales, providing personalized and tailored experiences that result in stronger customer engagement, with loyalty as well as higher satisfaction.

For product service system implementation for sustainable business models by use of services (car-sharing, ride-hailing, subscription, and others that reduce environmental impacts), an attractive new idea can be designed for the customer base with competitive advantages, such as maintenance, insurance, mobility solutions, and others. Revenue diversification moves beyond traditional vehicle sales, ongoing services, and subscriptions with stable and predictive revenue. In the automobile industry, implementation of PSSs faces many challenges and barriers that include data security, customer need and acceptance, and technological complexities with stakeholders. Future opportunities for growth need advancements in digital technologies, integration of smart services, autonomous mobility, and maintenance for further exploration.