The global automotive industry, as we know it, is going through a massive transformation with a wave of Connected, Autonomous, Shared & Electric (CASE) mobility trends. To ride this wave of “software-driven automobiles” of the future, the automakers are redefining their businesses across all dimensions Including product definition, engineering, manufacturing, supply chains & business models.

Embracing this change, the industry is witnessing increased openness of automakers to collaborate amongst themselves as well with the supply chain. Specifically, we see five key drivers influencing the collaboration strategies-

Creating new markets for existing products and services

Waymo’s self-driving platform on Chrysler Pacifica hybrid minivans is a collaboration that would potentially create a new market for Pacifica minivans. Two years after the Alphabet-owned Waymo launched a limited self-driving taxi service in metro Phoenix, Arizona area, the company has kicked-off a fully driverless car service in and around Phoenix with a full-sized hybrid Chrysler Pacifica and the fourth generation Waymo Driver platform1.

The partnerships between cloud providers (like Amazon, Microsoft), and engineering tools providers (e.g. ANSYS, Siemens, Autodesk), coupled with a new subscription based business mode, is enabling more automakers and the start-up eco-system to use these best-in-class tools in a cost effective manner.

Accelerated growth in existing markets

In an effort to increase respective market shares in the India automotive market, Toyota & Suzuki motors signed a capital alliance2 in 2019 to establish and promote long term co- operation in new fields of electrification & autonomous driving. India being a major auto market for both the automakers, this collaboration is expected to accelerate their respective growth in coming years. Maruti Suzuki’s strength in the entry-level and economy class segments is well known, while Toyota cars are known for their performance, quality and premium features.

Peter Waeltermann, President of dSPACE Inc., says: “The auto industry’s challenge to introduce CASE-related products and services ask for new partnerships and collaborations, to accelerate the development and reduce investment costs. Individual in-house developments (“not-invented-here problem”) are not adequate and financially viable to stem the huge development efforts necessary to bring these new solutions on the road or into your smartphone as quickly and mature as possible.”

Another recent example of collaboration for accelerated growth is between Volkswagen & Ford. Last year the two automakers announced a broader alliance3 wherein Ford will develop medium pick-up trucks for worldwide sale by both automakers. This alliance is expected to drive significant scale and efficiencies for both the automakers at global level.

Share costs & technologies for new product strategies

Sharing vehicle platforms4, technologies involved, and engineering costs to co-develop new vehicle models is another milestone on the collaborative front. Such a strategy leverages the flexibility and modularity of the platforms while decreasing development costs of repeatable vehicle components for everyone involved.

Major entities, such as Honda and General Motors5 have partnered in the North American market to launch EVs at reduced production costs via sharing platforms, engines and electrified powertrains thus passing on tangible benefits to the customer. Similar approach is taken by Volkswagen (VW) and Ford on the EV side with Ford to become the first outside automaker to use VW MEB platform6.

Henry Bzeih, Chief Strategy & Technology Officer Automotive at Microsoft says: “Microsoft’s quest is to empower our software partners to build solutions on the Microsoft Cloud as to positively extract exponential value for customers & transform industries. Our Automotive partnership with KPIT brings to market a holistic “solutions-based” approach for CASE (Connected, Autonomous, Shared and Electric). We are working closely together to deploy Connected, Autonomous and HPC (High Performance Computing) vehicle solutions while continuously leveraging the services of the software, platform, and the infrastructure to meet and exceed our customers’ goals.”

Build “whole product” offering to capture shifting value

Developing and deploying autonomous cars for shared mobility is complex. Providing a comforting, safe and connected customer experience is further more complex. In an attempt to provide end-to-end experience, GM has been building and acquiring an eco-system of partners like Cruise for autonomous technology, Lyft for shared mobility platform and their own expertise in building great looking cars with connected (OnStar) capabilities. A truly wholesome offering.

Another unique multi-party collaboration is seen in software validation & simulation space. dSPACE, a recognized brand in Automotive over three decades recently acquired it’s long term strategic partner, Intempora, strengthening dSPACE’s end-to-end portfolio for autonomous driving. Further, these simulation solutions are cloud enabled through Microsoft Azure.

Supply Chain Shifts

The case for Connected, Autonomous, Shared, Electric (CASE)7 vehicles is also driven by the emergence of specialized sources8 for vehicle hardware and software. Semiconductor chip companies today are forging new partnerships with OEMs as well as acquiring automotive domain expertise and software partners. The recent partnership announcements between Daimler & NVIDIA9 , as well Qualcomm & Veoneer10 reflect the technology driven supply

Conclusion

The automotive industry is undoubtedly going through a “creative destruction” phase where the entire eco-system is embracing the need to collaborate in redefining the value chain of ‘software driven cars’ of the future.

As a specialist Automotive Software Integration partner to OEMs and Tier1 suppliers, KPIT is enabling the seamless integration of “silicon-to-cloud” software helping our customers innovate, collaborate, and execute in their Prototyping to Production journey!

References

1. https://www.pcmag.com/news/waymo-is-ready-to-challenge-uber-with-autonomous-rides-in-arizona

2. https://auto.economictimes.indiatimes.com/news/passenger-vehicle/cars/what-pans-out-for-maruti-suzuki-
from-toyota-suzuki-partnership/77848973

3. https://www.just-auto.com/news/ford-and-volkswagen-announce-commercial-vehicle-alliance_id186580.aspx

4. https://techcrunch.com/2019/07/12/ford-volkswagen-ev-partnership/

5. https://www.autocarindia.com/car-news/honda-gm-expand-partnership-to-include-sharing-of-vehicle-platforms-
418504

6. https://techcrunch.com/2019/07/12/ford-volkswagen-ev-partnership/

7. https://autovistagroup.com/news-and-insights/why-automotive-industry-collaboration-important-and-essential

8. https://www.automotiveworld.com/articles/big-tech-vs-the-automakers-the-battle-for-the-connected-car/

9. https://nvidianews.nvidia.com/news/mercedes-benz-and-nvidia-to-build-software-defined-computing-
architecture-for-automated-driving-across-future-fleet

10. https://www.greencarcongress.com/2020/08/20200828-veoneer.html

About the Author:
Rajeev Kulkarni

Rajeev Kulkarni,
VP Strategic Alliances & Partnerships
KPIT Technologies
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