Why the wheels won’t come off from car OEMS…

Before Christmas, I had the privilege of being invited to a Porsche SE round table event hosted by Philipp von Hagen (Board Member) on the role of automakers in a digital/autonomous world. As a car enthusiast and given my work in tech/digital, how could I refuse! Thank you – Philipp for inviting me. With a diverse set of attendees including leaders from software, digital media and car OEMs – it was fascinating, thought provoking and at times a striking set of discussions. Here are four key takeaways from the session and subsequent discussions:

Cars will talk to each other to increase safety

Globally with 4G and soon 5G, cars are rolling mobile devices and wireless hotspots. Soon, vehicles will be connected to each other (V2V) and to infrastructure (V2I). When there is danger and a possible collision, every vehicle close to the source will know this. Given the receipt of advanced information, the car will be able to take control of its braking system. VW will launch this in 2019 and the Cadillac CTS already has this capability. Kymeta is creating a V2V platform using satellite technology and has closed over $200M in funding from Bill Gates amongst others. Volvo’s stated aim is to eradicate accidents by 2020. With all these endeavours, we expect safety to drastically increase.

Collaborate or become obsolete

Auto makers collaborate within a complex ecosystem. However, relationships have been predominantly of the supplier-provider type with a focus on cost control. Car manufacturers are quickly integrating suppliers into a true partnership to speed up innovation. We have seen Volvo partnering with Uber and BMW with Amazon to integrate alexa into the head unit so you can ask for news and weather reports. Toyota has launched an artificial investment fund to invest in the next generation of in-car digital technologies; what is interesting is that they are co-investing with their competition.  As cars get smarter and more autonomous, on-the-road services such as shopping or content will be offered as standard. Those auto makers who master the art of collaboration – particularly with tech companies – have a bright future.

Culture change fatigue can kill – so communicate, engage and invest

With young auto rivals such as Tesla, NextEV and Faraday Futures leading the industry disruption, traditional OEMs must battle to remain relevant. As they embrace the digital and green revolution and create new services, they need to retool not only their assembly lines but also their workforce. Transformation fatigue and fear of new technologies, in an industry that has already seen so much restructuring, can paralyze a company. The leaders who engage, communicate, invest in retraining the workforce and when needed, appoint the right external talent, will gain a competitive advantage and survive.

Data could help oil the profits

We know data is becoming the new oil and for the auto industry this could create major growth opportunities. Data is anything related to vehicle speed, images from dashcam, transactions, usage of in car services and location. Then there is the data linked to the car health itself based on the numerous sensors in the hardware which will accurately inform what is happening and monitor performance. Tesla collects terabytes of data from its vehicles and uses machine learning to improve predictive maintenance, self-driving capabilities and the driving experience of its cars. As long as car OEMs do not breach any privacy laws and security is lock tight, they have significant moneymaking opportunities by harnessing the data.

The car industry is going through unprecedented changes and it is not clear who the winners and losers will be. Fuelled by the highly competitive nature of finding the right leaders to drive the change – it should be an incredible ride! Have a great 2018 and please do send me your thoughts.


By Praf Vagh, Consultant at Eric Salmon & Partners’ London office

Source: LinkedIn