The four major trends in the automotive industry – connectivity, autonomous driving, electrification, and shared mobility- are largely enabled by the growing power of software, and those trends are leading the transformation in the industry. As a result, it will be most likely the software defining the functions and features of a car and ultimately determining the dominance in the market sooner or later. Innovative and attractive features are being incubated in the software dimension, and customers are expecting more from car systems such as advanced driver assistant system (ADAS) and in-vehicle infotainment (IVI). The seismic shift is already underway.
How the Software-Defined Car Era Is Different
Then, what are the changes that the software-defined car concept has brought about to the automotive industry?
- The gap of productivity is much greater among automakers in the market than in the traditional market. The gap between companies responding quickly to and further leading the transformation and others less prepared is already being observed, and the ongoing, and even accelerated, shift will make it much wider.
- The complexity of the automotive software is increasing exponentially, especially along with the enhancement of ADAS and IVI. The number of code lines for a modern vehicle already has reached hundreds of million, and the growing connectivity of vehicles will expand the domain of the automotive software from inside a vehicle to the infrastructure to cloud, allowing almost unlimited compute power and access to all the data from everywhere. However, as mentioned above, the productivity in developing and maintaining the automotive software lags far behind, in particular, among the tail-end players.
- Cars are required to get better continuously even after they are released on to the market. Cars now need to be not only fixed when in trouble but updated with new and stronger feature all the time. To add sensors and cameras for safety and convenience features, the car systems should be ready and adaptable for those addition. To provide fresh and attractive in-car experiences, the car systems, in particular, the IVI system, should be always up-to-date with latest features, content, and services.
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- The automotive ecosystem is changing. Players with advanced technologies are joining in, and the relations between OEMs and other suppliers are getting more interactive and complementary. The position of OEMs in the production chain of a vehicle will remain the same in a certain perspective that they control the final outcome to be sold to consumers, but the value, or impact to the consumers’ buying decision, of suppliers’ possession, for example, technology of autonomous driving and kinds of streaming services, will only increase significantly. Except having to closely co-work with partners to offer the best product, the vehicle itself and the experience in it, OEMs may have to change the whole attitude toward them.
What Automakers Need to Do
To keep pace with the transformation that is already happening, here are what automakers need to do.
- Practice organizational transformation
Developing and enhancing software competitiveness and productivity is a long way to go. The metrics are way different from manufacturing, and the efforts should be put in various domains -approach and methodology of development, architecture and design of software, change of strategy and organization, etc. But the most important part is the change of mindset that software is no more subordinate to hardware.
- Buy a make-or-buy strategy
No matter how hard OEMs strive for the best software competence, they cannot create everything. So finding optimal partners who will complement them is a must. The relationship should be, rather than sending orders and receiving supply of components, interacting and complementing each other to build better experience for customers.
- Prepare plans to satisfy customers all down the line
The lifetime of a vehicle is longer than any other ‘electronic’ devices in our daily lives, and automakers’ responsibility for improvement lasts while the vehicle is on the road. OEMs should consider extension of features such as sensors and cameras after cars roll off the rack and provide continuous updates for better performance and new features throughout the lifetime.
The advanced and sophisticated software is transforming the mobility experience, and to revamp the organization in sync with that, a fundamental change of the mindset that puts priority on software is essential. Needless to say, attempts to foster software competence for strategy, design, development, and testing. The efforts to improve customer experience with cars shall continue throughout the lifetime of the cars, the typical relations with suppliers and partners shall evolve into a productive ecosystem, and compute power of the cars shall increase along with the growing car connectivity.
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