16 MiMfg Magazine July 2017
Mobility Technology Advances Reroute Supplier Strategies
By Daron Gifford • Plante Moran
The traditional vehicle ownership model is changing with advances in mobility technology and shifting consumer preferences . As the automotive industry moves toward an autonomous , sharedvehicle model , OEMs will seek supplier partners who understand , and will adapt for , the future — successfully implementing significant changes to the vehicle ’ s interior , exterior , powertrain and chassis .
Seizing new opportunities will require a realistic assessment of your business and its role in tomorrow ’ s industry . The capital requirements and investment risks at play in this dynamic market can be daunting . Here ’ s snapshot of what you can expect .
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You may need to acquire rather than invent product technology — a fact that ’ s fueling a great deal of joint venture , merger and acquisition activity . For example , BorgWarner acquired traction motor maker Remy International to position itself to better serve the electric and hybrid electric vehicle market , while Nvidia , ZF , Bosch , and Audi are collaborating to have a self-driving car on the road by 2020 .
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You ’ ll have savvy competition as tech companies and private equity
firms move into the automotive space . Samsung acquired Tier 1 electronics and software provider Harman ; Intel is acquiring autonomous driving technology firm Mobileye ; and Qualcomm is acquiring NXP Semiconductors . The competitive landscape is changing that quickly , and if you don ’ t begin to imagine the future , it will slip through your fingers .
Autonomous sharing will grow as self-driving capabilities improve rideand vehicle-sharing opportunities for customer access . For example , Uber is planning a driverless fleet by 2030 . OEM investments in mobility technology and in ride- and vehiclesharing applications and platforms will also continue to increase . Ford
5 created Ford Smart Mobility to speed development of advanced technology ; General Motors has launched a fleet-sharing subsidiary , Maven , invested in Lyft , and acquired autonomous technology startup Cruise Automation , as examples .
The convergence of autonomy and ride-sharing will have vehicle-wide implications . Suppliers can expect bumper-to-bumper changes in everything from materials and visual displays , to sensors and controls . There will be a need for increased technology integration , faster component replacement in many instances , and new technologies and infrastructure to support self-driving capabilities .
Electric vehicles will become increasingly viable . The increased asset utilization enabled by autonomous technology can enhance EVs ’ annual fuel savings and strengthen the EV return on investment and business case , along with meeting the environmental requirements to reduce hydrocarbon emissions that many major cities will be adopting .
What ’ s a supplier executive to do ?
Identify the potential impacts on your product portfolio as mobility technologies are applied throughout the vehicle , and make strategic decisions on the direction you want to go . Prepare to invest more in R & D , innovation , mergers and acquisitions , and / or new customer segments to support growth of new business . You ’ ll need to be extremely focused with your resources . If certain products or services don ’ t fit the future direction you ’ ve identified , you may have to make difficult decisions about carving them out , as hard as that may be to do , to ensure a sustainable position in the value chain . 6
Daron Gifford is a partner and automotive consulting leader at Plante Moran . He may be reached at daron . gifford @ plantemoran . com .
Plante Moran is an MMA Associate Member . Visit online : www . plantemoran . com .