Ever since the late 1800s, the automotive industry has been one of the leading agents of innovation and economic growth. Small wonder, then, that the sector is now at the forefront of mobile technology.
Vehicles have long past the phase of being ‘dumb’ machines. Indeed, today’s vehicles may have more in common with an iPad® than they do a Model-T. Vehicles now have the ability to communicate with each other, and it is this, combined with the availability of limitless new data, that will bring about the next major advancement in this sector. Engine control units have been computerized; integrated software systems and sensors have been embedded; while data on everything from engine performance to fuel consumption to tire pressure is monitored.
But while all of the computerization that has occurred over the past two decades certainly represents a giant step forward in the evolution of the car, we believe that it will be the integration of mobile technology that will truly unlock the next big phase of automobile development.
Likely the most rapid mobile innovations to be commercialized within the auto sector are the use of in-vehicle apps. In Europe, Mercedes-Benz already offers news, financial market and parking locator apps through its onboard COMAND system. And just last year, Peugeot launched Connect Apps—initially available for the Peugeot 208 in France, but with an eye to expanding its use into other countries and other models down the road.
On the other side of the Atlantic, Ford and General Motors unveiled their app strategies earlier this year. GM announced that it was partnering with AT&T to connect most of its Buick, Cadillac, Chevrolet and GMC models with integrated 4G LTE modems starting in 2015. GM will provide apps directly from a vehicle’s embedded touchscreen infotainment system. Meanwhile, Ford is counting on drivers to bring their own smartphones into the car and run apps through its Sync voice command system, developed with Microsoft.
Both car makers have launched software development kits to encourage developers to build apps for their respective platforms, but the differing strategies—embedded at GM, unembedded at Ford—reflect an evolution that is still in its infancy.
While onboard apps add new options for entertainment and productivity, the progress towards self-driving cars promises to have an even more profound impact.
Google has drawn a lot of headlines for its self-driving car, but the phenomenon is more than just a passing fad. Traditional automakers are also getting into the game. Mercedes-Benz’ 2014 S-class will have partial self-drive capabilities enabled by the Distronic Plus steering assistance system. At this early stage, Mercedes-Benz has included safety measures to control drivers’ usage of the new functionality—shutting off the system after 15 seconds if the driver isn’t applying torque to the wheels—but it is an important first step towards a self-driving future.
At KPMG, we believe that fully self-driving cars will be a reality within the next 10-15 years. In part, this is because consumers and governments alike are eager for new mobility options that could reduce congestion and pollution, while improving safety and quality of life. But as younger generations enter the driving populace, we expect that pace of change to accelerate; just as they expect to be entertained or informed on-demand, they’ll have the same expectations for mobility.
In the not-too-distant future, we expect consumers in some parts of the world will start enjoying a very different commute from work than they do today. It will start by them opening up an application on their smartphones and summoning a car—perhaps one belonging to a car-sharing service like ZipCar—to take them home. Once aboard, it will glide easily into the self-drive lane, check live traffic conditions and calculate the ideal course home. Meanwhile, the ‘driver’ will be at liberty to sit back and use the car’s on-board apps to search for a restaurant, finish up some work, and perhaps book a pick-up time for the next day’s commute. And before they know it, they are home with their family and the car sets off to its next assignment.
Partnerships for the future
One of the greatest challenges slowing innovation in the auto sector, however, relates to a mis-match between innovation cycles and design cycles. Today, it takes 3-5 years to take a vehicle from drawing board to showroom, making it practically impossible for mass-market OEMs (Original Equipment Manufacturers) to ensure they have the latest technology in their cars once they hit the streets.
One solution is to create partnerships with technology companies, something that the auto sector has already been doing for decades. TomTom® or Garmin® drive navigation systems, and GM’s OnStar® came from collaboration with partners like Continental, LG, and Motorola.
The ideas can flow in either direction. Volkswagen has a strategy for customers’ on-board experience, and may develop it themselves or partner with a technology company. Just as easily, Microsoft might approach Ford with an idea for its drivers’ experience. Simply put, innovation will continue to come from partnerships that allow each party to do what they each do best.
Whatever the approach, one thing is certain: cars are becoming more and more like devices. And before long, they will be driving us, not the other way around.
By Mathieu Meyer, KPMG in Germany and Gary Silberg, KPMG in the US.
® iPad is a trademark of Apple Inc., registered in the U.S. and other countries.
®TomTom is a trademark of TomTom International B.V.
®Garmin is a trademark of Garmin Ltd. or its subsidiaries, registered in the USA and other countries.
®OnStar is a registered trademark of OnStar, LLC.