By Mr. Subu D. Subramanian, CEO, Defiance Technologies Ltd.*
Information and Communication Technology (ICT) can very well help the automotive industry to meet the current challenges and provide a superior product and services to consumers. Today ICT is not only playing a supportive role but has become an integral part of the product and virtually the backbone of the industry. The recent launch of the Google car is a clear testimony to this. Google took the initiative to design and launch the driverless car and even got it certified by the Department of Motor Vehicles (DMV) in the US.
The focus of many companies in both ICT and auto industries is on the 3Es factors – emerging markets, emerging technology and environmental concerns which are guiding investments and growth in both the industries.
Despite the global economic uncertainties, the auto industry remains optimistic. Global auto sales in 2012 are expected to reach 77.7 million, up 6.7 per cent from 2011. The market is seen climbing to 90-91 million vehicle sales in 2013 and cross 100 million in 2015. Most of this growth is expected from the BRIC countries. Sales in China are expected to grow at 16 per cent, while sales in India are projected to overtake that of Germany in 2014.
Europe and the US are expected to be flat or marginally positive. No wonder then that almost all auto majors are focusing on the emerging markets. For example, Nissan aims to make countries such as India, Brazil, China and Russia account for 60 per cent of its global sales in FY 2016 while targeting a global share of eight per cent. Ford has its focus on the emerging markets and the Asia-Pacific region to drive its growth over the next 10 years.
Emerging technologies
Innovation in the ICT industry is far more rapid. Auto makers are investing heavily in R&D projects leveraging these emerging technologies. Today, the ICT content in an automotive is over 14 per cent, which is expected to go up to 21 per cent in 2015. There are about 10 million lines of code which drives a luxury automobile. In 1970 it was just 100 lines. Over the 80 per cent of innovation and R&D related to electronics and embedded systems. The role and collaboration of ICT companies is very significant in all such innovations.
Besides ICT being integral part of an automobile, innovation in ICT enables the industry to be more efficient in designing, manufacturing, distributing and servicing its products worldwide. OEMs are leveraging the ICT platform to reduce the product development cycle time with features such as target design, cost and time. The cycle time is being crashed from six years to almost less than 24 months now. Ford’s Virtual Reality Cave attempts through the virtual prototype technology to reduce the need to build physical prototypes and trim thousands of dollars and several months from the product development process.
The six finalist vehicles (Ford Focus, Hyundai Elantra and Volkswagen Passat, BMW X3, Honda CR-V and Rover Evoque) in 2012 North American Car/Truck of the Year awards were all developed using CATIA, long recognized as the leading design solution in the automotive industry.
Sustainable mobility
An equally important focus of the auto industry globally is on green cars and sustainable mobility. From hybrids to hydrogen cells, the world’s leading OEMs are working vigorously to increase their production of ‘green cars’.
It is also expected that increasing fuel prices will accelerate introduction of plug-in hybrid and battery electric vehicles. Deloitte estimates that by 2020 electric vehicles and other “green” cars will form a third of the total global sales in developed markets. In 2012 alone, the industry will witness about 15 new electric vehicle launches in the global market. Gartner is forecasting sales of 100,000 electric cars in the US in 2012. In all such initiatives, ICT and contribution from the ICT industry to the auto industry will be very significant.
New business models such as car sharing and integrated urban mobility as well as electric vehicles will create new business opportunities. For example, BMW, in partnership with a rental car company Sixt, provides car sharing service called ‘DriveNow’, which has 500 vehicles and 9,500 subscribers as part of its service in Berlin. Bicycle Rental is popular in Paris. Batscap is taking this to electric car rent through ‘Autolib’, an electric car sharing scheme in Paris. The scheme intends to deploy about 3,000 electric Bollorés Bluecars for public use, based around 1,120 citywide parking and charging stations. The registered member can pick up the car, say, from the airport to the shopping mall and drop the vehicle at the nearest charge station. He will be charged for the usage. This consumer- and environment-friendly and of course wallet-friendly scheme is getting popular in the Western world.
The connected vehicle initiative in the industry will further facilitate sustainable mobility. ICT plays a crucial role in connected navigation, offering services like eco driving, dynamic routing, real time traffic information and other services. These are crucial for an effective integrated mobility solution.
Conference structure
The CII conference was intended to deal with all the above topics in depth, with leading speakers from ICT and the automotive industry expressing their expert views at the three plenary sessions.
Interestingly in the US today there is closer collaboration between the East and the West. I mean Detroit and the Silicon Valley. Here, in Chennai, I observe that we need not to travel too far. We have the IT corridor in OMR and the auto corridor at Oragadam. Our Indian Silicon Valley, Bangalore, is not too far from here. I am sure that we have an equally vibrant, if not better eco system to accelerate innovation in the auto industry leveraging the faster developments in ICT.
There are brighter chances of Chennai-Bangalore soon to become the global ICT innovation hub for the auto industry with its eco system, superior talent pool and frugal innovation capabilities.