car moving fast in tunne

Wind of change in Automotive

I had the privilege to visit both the TU-Automotive in Stuttgart a few weeks ago, and a Connected Car event which was part of the LA Autoshow this past week.

It was interesting to see how most of the traditional companies within the automotive industry are approaching the upcoming market changes – most of them take it business as usual when speaking publically. You can see TIER1 companies and OEM’s trying to reinvent themselves by purchasing software companies etc. It is very clear that the future winners will be those who can change themselves rapidly enough to meet the requirements of future consumers. Currently, the automotive industry is facing the following key challenges: Rapid roll-out of new technologies, ownership of the car is a challenge, cybersecurity threads, and new challenger companies to compete with.

 

Rapid roll-out of new technologies

How can we enable new technologies in automotive environment rapidly, but with a focus on safety? Consumers are adopting to new services and features in their smartphones on a monthly basis and they expect to be able to utilize those similar services in the car environment. So far, the automotive industry has been not been able to respond quickly enough to this challenge. Companies like Apple, Google and Baidu have seized the opportunity and are offering their solutions to OEM’s. And OEM’s are forced to accept those technologies under pressure from consumers – A question for the future is however is, how to position OEM’s in front of those giant consumer companies? How do we avoid becoming the Dell of the automotive industry? In more affordable cars, Apple CarPlay, Google Android Auto and Baidu CarLife solutions are perfect add-ons, but how does this play with premium car manufacturers? Symbio’s ultra low cost connected car platform targeted to more affordable car lines received a nice reception from audience.

One of the hyped discussion topics in both Stuttgart and LA was autonomous driving, and you can hear lot of opinions about how this technology exists today, and what others think the industry may look like 5-10 years from now when the market has gained significant traction. TESLA for instance, has already developed semi-autonomous features which are available. Most impressively, they are enabled with over-the-air SW updates to all their current car owners, and this makes existing OEM’s shake their heads. Traditional companies are of course investing a lot as well. Volvo for instance recently announced an impressive new “Concept 26” during the LA Autoshow – with the help of Symbio of course. Volvo’s concept is unique and for the first time a company is actively and publically starting to think about “what do you want do with your time while commuting if you do not have to drive anymore.”

More and more companies are becoming aware that in order to survive in the world of faster and faster technology rollouts – companies have to change rapidly – they have to be agile and fast – and they have to throw out old processes and ways of thinking and adopt to a way of working in the Internet Age.

 

Ownership of the car is challenged

The Connected Car Expo in LA brought some very new and interesting concepts out. Owning a car is no longer about defining yourself. Young people are defining themselves in different social media channels instead of through the brand of their car. In the US, youth representing the so called ‘Generation X’ are no longer keen on getting drivers license or owning a car. There are new types of services like Lyft and Uber which are perfect for those who do not want to own a license, and even those who have a license to drive, but prefer different types of car sharing and car pooling options. What does this mean to automotive industry? A sudden decrease in production volumes….This is however also an opportunity – people have a need to transport from point A to B, and there are many new ways to accomplish this need. One revolutionary idea is ‘TAXIBOT,’ which was introduced by LA Taxi Administration CEO, who said “the sky is the limit for innovation in this field.”

 

Cybersecurity threads

Cybersecurity was also a topic due to more recent incidents around the world. Both Stuttgart and Connected Car Expo in LA put quite a lot of focus to cybersecurity. Of note, it was finally understood by all the value chain members that a professional approach is needed for this topic. People put their lives in the hands of their cars and they must be able to trust the vehicle completely. While having this hype for autonomous cars – challenges in cybersecurity might be the reason some OEM’s delay their launch of new and innovative features.

 

New challenger companies

While traditional companies within the automotive industry are still thinking about how to do the things – new companies like TESLA are rising up. Additionally, existing companies from other industries are willing to enter the automotive industry like Apple & Google. So far, the TESLA ride has been amazing as they have been able to renew business models, value chains, and break down technological barriers etc. This reminds me of the importance of development and what happened in the mobile phone industry after 2005 when Apple made their entry into the market.

 

The Automotive industry it clearly facing challenges at the moment, but at the same time it is a big opportunity for all companies involved. Market shares will be shared again, but the winners remain to be seen. At Symbio, we are ready for the challenge and already helping OEM’s and TIER 1’s to face the new world – our unique background in consumer electronics is enabling us work with the winners of the future!