Motoring is going to change more in the next decade than it has in the last century. That’s the view of industry veteran Mary Barra, boss of car giant General Motors.
Will the future be driverless? Will car-sharing become a keystone of the sharing economy in urban areas? Will battery technology overcome the current range limitations and reduce charging times, or is hydrogen the answer? And could the tech giants like Apple usurp the current dominant players?
For years automotive advances were largely mechanical and incremental. Fuel saving advances courtesy of aerodynamics, more efficient engines, and weight reductions were the innovation highlights. There were also significant advances in car safety systems with anti-lock brakes, cruise control and stability control systems. The speed of change has altered radically of late.
0 of 7
At the Frankfurt motor show this month “connectivity” has supplanted “horsepower” or “torque” as the prevailing buzzword. That trend is expected to last.
Expect virtual reality headsets like those from Oculus Rift to be a common sight in showrooms in the next few years. These offer potential customers the chance to see their bespoke car from all angles – without the dealer having to carry a large fleet of demos. That’s only the start.
By 2025 it’s expected that self-driving cars will be a fixture in car showrooms, which by then may have moved onto the main shopping streets as high-end stores rather than suburban glass palaces.
The motoring world is exchanging its association with oil-splattered mechanics for IT geeks. And the revolution is already underway.
Powertrain
Electric power hasn’t usurped the combustion engine as yet, despite the predictions made at the turn of the century. By 2020 the ambition in Ireland was to have 20 per cent of the 2 million vehicle fleet running on electricity. There is little hope of that now.
Range anxiety remains the greatest hurdle but for all the consumer concerns about the limited range and lengthy recharging times involved in electric cars, there are indications of major breakthroughs.
Under the guise of its Porsche brand, Volkswagen is showcasing a concept car at this month’s Frankfurt motor show which sets new benchmarks in battery tech. The Mission E claims a range of 500km from its 800-volt battery pack, which can be recharged to 80 per cent in just 15 minutes.
Those figures would push it ahead of current electric car star Tesla and if economies of scale can be achieved to make it affordable in the mainstream, then it may be the breakthrough that finally pushes the plug-in electric car ahead of the combustion engine. In the meantime the ever-expanding range of plug-in hybrid models – small combustion engines supported by smaller battery packs capable of 50km of electric-only driving – are proving a hit for consumers wishing to bridge the innovation gap.
Other alternatives haven’t gone away either. Hydrogen remains a test-bed for many manufacturers and Toyota this year introduces its Mirai to the market. It’s one of the first hydrogen fuel-cell vehicles to be sold commercially.
Tighter regulations on emissions and renewed focus on the health risks from diesel emissions increasingly encourage the move away from the combustion engine. As cities opt to create emission-free car zones, electric or hydrogen powertrains are set to become increasingly attractive both to consumers and car firms.
Entertainment
Who wants a car with a tape deck these days? Similarly the next generation of buyers won’t be impressed with a CD player in a car, particularly as they probably don’t own any CDs.
Car firms have given up on attempts to create proprietary infotainment systems. They simply couldn’t compete with the speed to market of the software giants. There is a raft of regulations surrounding the motor industry that manufacturers of smartphones or tablet computers don’t face. So the car firms have sought simply to create in-car terminals whereby the smartphone apps can be displayed, regardless of whether its Apple, Android or any future system.
They can certainly dress up the interior with high-definition graphics with the help of suppliers. Bosch, for example, provides the acclaimed digital console for Audi’s latest system along with that for Volvo’s new XC90. It is also offering the latest haptic touch system, on a par – if not better – than the Force Touch launched by Apple earlier this month.
The arrival of Apple’s CarPlay and Google’s equivalent, however, means the tech giants will determine which apps are supported in-car. It is the tech firms rather than the car manufacturer that signs off on which in-car apps will operate on CarPlay or Android Auto.
There remain opportunities for car firms in the app environment, however. It starts with being able to control an array of your car’s functions remotely via an app, such as locking or unlocking, turning on the air-con or even locating it in a busy car park.
More advanced systems, such as GM’s At Your Service app, can take note of your route via the Sat-Nav and, if you approve, allow businesses along the way to advertise specific deals if you stop into them. Developing apps relevant to motorists is likely to prove a lucrative line as new car’s embrace greater connectivity.
Looking further ahead to a time when self-driving – or autonomous – cars are on the market, there will be opportunities, particularly in heavy urban traffic or long motorway drives, when it would make sense to turn the car’s windows into interactive screens. The ability to switch the vast glass area of the car’s interior to project video or even touchscreen-type technology is already a subject for advanced research.
When it does arrive its likely to emerge from the likes of Bosch, Valeo or Continental. Hardly household names to car consumers, these are the firms that develop the big tech advances such as self-parking systems, reversing cameras, infotainment displays and even autonomous driving before selling them on to the car brands.
New competitors
In the automotive production chain, suppliers are now moving into the driving seat. It was telling at the Frankfurt show that supplier stands now sit alongside those of the car firms.
Traditional carmakers have already mastered the formidable complexity of manufacturing vehicles that are reliable, comfortable and safe. But it is becoming more feasible for a newcomer to outsource vehicle manufacturing the same way that Apple outsources production of iPhones.
One company already working with Google is ZF, a large German auto components supplier that in May completed an acquisition of TRW, a company based in Michigan that provides auto electronics such as airbag systems. TRW has been working on sensors and other hardware for self-driving cars.
Stefan Sommer, the chief executive of ZF, said the company would be able to produce a Google-branded car along with two or three other partners supplying components that ZF can’t, such as sheet metal body parts. “We would be a partner in that, for sure,” Mr Sommer said.
ZF sees itself as an innovator, not just a supplier. In Frankfurt, it displayed a car with electrically powered wheels that allow the car to turn 360 degrees almost on its own axis. The biggest hurdle at present is that ZF could not agree to demands by Apple for exclusive rights to such inventions, Mr Sommer said.
Ownership
The shared economy is changing the tourism sector and most motor industry analysts and executives accept that for milennials car sharing could soon be as common as booking a room via airbnb.
Car sharing schemes are not new, with GoCar already operating in some areas of Ireland. The potential entry of the car firms, however, will significantly spur its growth.
Several firms, most recently Mini, are already piloting systems in selected locations whereby owners can place their private cars into a car-sharing pool in return for payment. They can limit the potential pool of users in these systems. So while you are at work your car can be making money. Similar short-term rental schemes are being tested in some European cities for private car park spaces as well.
Taking it one step further and Mercedes sees business potential in offering on-demand limousine services using driverless cars, Daimler chief executive Dieter Zetsche said, in what amounts to a direct challenge to Uber.
Germany’s oldest carmaker is considering setting up large fleets of autonomous cars to cater to a new customer base which is less attracted to vehicle ownership but still interested in using premium transportation services like limousines. “This is a concrete development goal of ours,” Zetsche said.
Daimler already has car2go, its own car-sharing service which allows subscribers to locate and rent a nearby vehicle from a fleet of Daimler-owned vehicles using a smartphone. “It would be even more convenient if the car came to you autonomously,” Zetsche said.
Just as tech firms are considering the potential cash returns from entering the motor industry, so the car giants see there is money to be made from the software to run a self-driving vehicle, as well as services associated with autonomous driving, such as mapping, car-sharing and car recharging services.
In August Daimler, BMW and Audi bought high-definition mapping service HERE. A year earlier Daimler bought MyTaxi, an app that allows customers to hail a cab, track its progress and pay for the ride using a smartphone.
Zetsche said that the combination of car rental services and autonomous vehicles opens up new business opportunities.
It’s evident from all this that the established car firms are not prepared to become mere hardware suppliers to the software giants.
The good news for the motor industry is that it clearly has a strong and lucrative future. That’s why it has caught the eye of the tech giants, eager to bring down the long-established barrier to entry and instigate a revolution. What’s unclear is where exactly the road ahead may lead.
- (Additional reporting: Reuters/New York Times)
