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Current Automotive Challenges & Opportunities
What are the typical challenges?
Product planning
Today many vehicle brands share similar design and base content. Product planning is a critical task in any company and especially so in the automotive industry where time to market with the latest technology at an affordable price for a product takes at least 4-5 years to develop. It requires a good long-term vision into the future to stay on a prosperous path. In today’s cars performance of standard features and Quality are pure hygiene factors, nevertheless still challenging as projects are pushed to shorter development time, often including late changes.
Make or Buy
Correct decision on making a vehicle sub-system in-house or to buy it off-shelf from a Tier-1 supplier is one typical challenge. True cost walks are often complex to make. Piece cost, tooling cost, freight& customs cost, Engineering Development cost, assembly cost and not least the system maintenance over time are all factors to consider in a “make or buy” decision. Sometimes OEM’s are too “protectionist” or just too “disjointed” as an organization to understand benefits of a sub-system buy strategy. Another risk is not letting go of in-house mature technology to supply base, enabling your OEM key resources to move on to new development or target setting.
Engineering& Talent
Engineering know-how is all about integration of several complex systems enabling a competitive vehicle performance level and managing it in time and on budget. If you would put dots on the globe for all engineers involved in making a vehicle today it would show up in very many different locations and time zones. Project Engineering leaders with good communication skills and understanding of different cultures are therefore valuable for success. With so many OEM’s and tech companies out-there it is also becoming more challenging to recruit experienced talent in general.
As automotive OEM you will need to manage all challenges, but it will be difficult to handle all opportunities single handed
What are the current opportunities?
Electrification
Environment and sustainability is driven by legislation, taxes, and planet earth climate. We must push energy efficient and low emission vehicle solutions. Electrification is now firmly placed on all OEM’s roadmaps. During the on-going powertrain transformation (Combustion->Hybrid- >Full Electric) all different powertrain options eats lots of resources and cost in variant complexity for OEMs. So, obviously new OEM’s only making 100 percent full electric vehicles has the advantage of a clear focus on a much less complex powertrain system.
Artificial Intelligence/ Machine Learning
AI is now making entry into many consumer products but also becoming a great tool to support development and quality. Data is already available in many areas and we just need to make smart combined use of it. Some say the technical singularity is near. I am not so sure, but I think we all are starting to feel a technological acceleration.
Self-driving Technology
Fully autonomous vehicles is a major opportunity for mobility of people and goods, creating new business models for transportation. Level 4 and 5 is currently a horse race between several new tech companies and OEM’s. There is a high focus on use-cases and sensor technology enabling decision making a safe and trusted technology. Cyber security here becomes even more important to keep hackers on a safe distance. You can draw parallels to the aviation industry using autopilots, triple redundancies, V2V, and traffic controls systems. However, in those vessels we still require two capable human pilots on-board. I think this is because the human brain by nature is more afraid of heights than by ground speed in horizontal direction. By logic we should understand that the impact of a collision at high speed is the same independent of vertical or horizontal direction of travel.
Connectivity (V2X) & Infotainment
Imagine you are inside a self-driving mobility service vehicle, the inside of such vehicle will be much more important than the outside. You could make the inside into an office, cinema, bar or a gym. Only imagine what you would like to do while spending time between A and B and there is your business model opportunity shaping up.
So, how to manage such challenges and opportunities?
Partnerships and a global footprint including China
Having access to the fast-growing Chinese market today is a strength for any company. As automotive OEM you will need to manage all challenges, but it will be difficult to handle all opportunities single handed. You need to focus on your strengths and build win-win relationships with allied partners. Partnerships should not be limited to the private sector but also include governments ideally through non-profit organizations to create standards and clarity on the somewhat cloudy automotive way forward.
