Autonomous vehicle is changing the automotive industry

For a hundred years, cars innovation has made advances to increase affordability, performance and safety. However, the advent of electronics since the last 30 years is radically changing the automotive landscape. Embedded SW running in nowadays car has 10 times more code lines than the Boeing 787 (modern airliner).

 

Software based systems are becoming more valuable

Initially appearing on high end cars only in 1960’s with electronic based injection system, embedded software is now found in every modern car. Manufacturers widely use embedded software to improve comfort and driving assistance in addition to performances and safety. Growing IT system capabilities enable the rise of Advanced Driver Assist System (ADAS), which rely on processors performance, sensors and software.

Exhibit 1
Modern cars ADAS systems

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Today, vehicles are able to detect with captors, in order to process data in real time with their microprocessors and analyze it through software. This allows them to execute more and more complex maneuvers, taking into account the surrounding environment, such as automatic parking or intelligent speed regulator.

Software became a key feature in the automotive industry as SW now accounts for a growing third of a car value. Besides, politics foster implementation of safety technologies, based on embedded software capabilities. In 2012, Europe realized a major step forward making the emergency braking systems installation mandatory for every new car –sold in the EU from 2018, March 31st.

Exhibit 2
Mechanical parts share in car value strongly decreased in favour of electronics and software

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Source: Valeo

 

The automotive landscape is undergoing a significant change

Both mass and premium manufacturers see ADAS as essential for their future as digital capabilities margins are higher than for traditional components. For example, premium vehicles with digital capabilities are priced up to 25%. Even if mass market cannot offer all those new technologies yet due to cost issues, lower-cost systems efficiency is improving. Unlike other industries, automotive premium features tend to rapidly become mass market thanks to both short product lifecycle time and intense competition.

High tech companies also see automotive digital capabilities as new a market opportunity. Their experiences in software development, connectivity and users interaction are strong asset to enter the automated vehicle market. Indeed, the autonomous vehicle generates and uses huge amount of data and understands its surrounding environment. Cars now have a brain based on embedded software, enabling environment recognition and self-driving. For instance, Google started the self-driving car project in 2009 and more than 126 000 miles have been autonomously driven until August 2016.

 

New competencies are needed to take the software turn

Software skills and competencies are scarce resources as manufacturers compete with high tech companies such as Google or Facebook to hire developers. Besides, those software companies are looking for automotive industry talent to enter this new market segment. OEMs and suppliers shall work on their image and foster partnerships with educational institutions to attract desired profiles.

Besides, current development processes cannot handle software development. Unlike mechanical parts, software products are developed iteratively, with the agile methodology. Define new processes for configuration management and Application Lifecycle Management deployment are critical issues. Indeed it ensures alignment with MĂ©tier and improves both quality and time to market.

 

Upcoming opportunities in the transportation industry

As urban population increases, car drifts from owned object to transportation mean only. On-demand transportation is now popular in big cities and the expected next step is a full network of autonomous vehicles. This is no more science fiction as Uber launched this summer in Pittsburg an autonomous fleet of outfitted Volvo XC90.

Another opportunity is carsharing, especially in the hospitality industry. Hotels would rent their guests’ car for transfers, to airports for instance, and then reduce their costs.

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