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Are car companies becoming tech companies? With software already reprogramming the automotive sector from design to manufacturing, the question might already be answered.
The auto industry is in a state of extreme flux, with every link in the value chain being transformed by a powerful set of disruptors, all converging to create an entirely new mobility ecosystem.
It’s a big statement, but the evidence is undeniable. Today’s carmakers face a not-so-distant future that's being hammered into shape by mega-trends like electrification, digitization, sustainability and emission standards, connectivity, VR, and AI.
Together, they’re setting the stage for immense innovation that could bring huge growth to an industry that already provides direct and indirect jobs to 13.8 million Europeans.
Underpinning everything is the embrace of technology that makes vehicles - and the processes that create them – far more responsive to changing consumer and industrial use cases.
In the digital age, drivers and passengers expect the same degree of connectivity from vehicles as they do from their homes and offices. Smartphones, laptops, tablets, wearables and onboard systems should all link up seamlessly. That includes everything from infotainment to assisted driving and smart parking, where payment options are accessible from a touch-screen dashboard.
What does that mean for manufacturing processes? In the future, a digital component will likely need to be added to everything an automaker produces, enabling automotive industry leaders to build better car designs catered to the needs of specific driver personas.
Designers and engineers will need to gather data using new VR design tools that blend immersive visualization with haptic feedback, allowing them to feel exactly how comfortably their designs will play out in real life.
Speaking at Autodesk’s Automotive Innovation Forum in April, Nissan Senior VP and Head of Design, Alfonso Albaisa, said the company is already using advanced design tools to ‘humanize virtual experiences.’
Under COVID restrictions, he and his global design team have been able to meet in virtual studios to collaborate on new car models, their avatars moving from vehicle to vehicle, sitting behind steering wheels and manually manipulating rear-view mirrors, altering components, or suggesting alterations.
“As designers, we want to get inside new designs and experience them as soon as we can. These design tools create an environment where more natural and spontaneous communication can happen, which is vital for the creative process.”
This new level of digital capability needs different skillsets, from engineering to sales and aftermarket service, up in the design studio and down on the factory floor.
As technology tightens its grip on the industry, it’s critical that the automotive workforce develops the right skills and has the latest digital tools. To attract and keep talent, everything needs to become digitized to reflect the needs of the more mobile, interconnected home and office environments that have come with the rise in remote work.
“Today’s car infotainment systems use more than 10 million lines of code,” said Audi’s Member of the Board of Management for Marketing and Sales, Hildegard Wortmann, speaking at NVIDIA’s GTC21 event this year. “That’s as much code as an entire vehicle needed just a few years ago.”
Traditional auto manufacturing leaders are adapting to software’s exploding prominence in different ways.
Some manufacturers are partnering with established software vendors to take advantage of cross-industry expertise and apply it to their own needs for design, fabrication, and assembly. Others opt to vertically integrate, building entire divisions devoted to creating custom code suited to their cars and customers.
One thing is certain: adapting in the right way is crucial. McKinsey research shows that top software companies report throughput and quality that is three to six times higher than that of bottom-performing competitors: a far bigger productivity difference than the one between hardware developers. That means that integrating software into a business needs to be done correctly, in order to bring huge rewards.
But can an automotive business really act like a Silicon Valley unicorn? Volkswagen clearly thinks so. The company has just launched its new CARIAD software division. With plans for 10,000 employees, the unit's headcount will make it the second-largest tech company in Europe, second only to SAP.
Mark de Wolf is a freelance journalist and award-winning copywriter specializing in technology stories. Born in Toronto. Made in London. Based in Zürich. Reach him at markdewolf.com.
Emerging Tech
Emerging Tech