What is in this article?:
- New Players Impact Supply Network as In-Vehicle IT Takes Hold
- Need for Speed Key
Big automotive suppliers such asnow are working with large and small firms to develop products.
Chevy AppShop allows owners to customize available in-vehicle apps.
In September 2013, automotive supplieropened a laboratory in Silicon Valley.
Its purpose, says lab director John Absmeier, is to support automakers with offices there and scout new technologies and talent. But it also is meant to prove the supplier is embracing the information-technology companies that quickly have become an integral part of the supplier pantheon.
“The automotive industry traditionally has not had a good relationship with tech companies,” says Absmeier. “Being next door to them gives us a lot more credibility and ability to collaborate.”
Not so long ago, such collaboration would have been unlikely. One company could single-handedly provide much of the infotainment technology that went into a car.
The connected car has changed that. Now, a vehicle must supply real-time information and services from external environments. That need has upended the traditional automotive supply chain.
“The idea a Tier 1 will serve it all up on a plate are gone,” says Thilo Koslowski, vice president-smart mobility at market researcher Gartner.
Now, big automotive suppliers such asare working with large and small firms to develop products. At the Consumer Electronics Show earlier this year, Delphi showed an infotainment system that used a smartphone as its engine, jointly developed with NVIDIA, a Santa Clara, CA-based company, and CloudCar, a small Silicon Valley IT firm.
Such relationships help the traditional suppliers hang on to some of the value chain in the increasingly cloud-based connected-car world.
“The suppliers can’t just be hardware producers,” says Koslowski. “You aren’t going to make any real value there.”
Automakers also are taking a more collaborative approach. To develop HondaLink, which allows drivers to access a broad range of applications on their smartphones through the car itself,worked with giants IBM and Electric, as well as small IT firms, says Charles Koch, manager of new business development at American Honda.
The smaller players “are very smart, very nimble and really good at connecting the dots, which is what you need,” says Koch. The large suppliers have the experience and the resources to develop hardware systems, but the move to digital and software-based systems is relatively new to them, he says.
“Not one of these companies expresses the expertise in all the skills and contents needed” to develop the connected-car systems, says Koch.