It’s Not Your Father’s Auto Industry

Staying Relevant (and Profitable) in Today’s Brave New Automotive World

Barring a few exceptions for cyclical downturns, automakers have marched to a relatively steady drumbeat for decades. Customer applause and occasional groans resound as each model year introduction has been eagerly anticipated, providing vehicle designers with valuable annual feedback. And since work on each year’s newest coupe or convertible begins several years in advance, there’s always been plenty of time to iron out any kinks. Everyone knows what to expect, sales volumes and profit margins are forecast well in advance, and for the most part, the road has been smooth and predictable, until…. 

Big Changes a Comin’
No more. The pace of automotive change has accelerated to the point that many in the industry are longing for the good old days of ‘slow and steady wins the race’. With automakers facing market pressures to integrate advanced technologies such as Bluetooth-enabled smart phones (which are also in a state of continuous flux), Internet-capable infotainment systems, “apps” and other forms of newfangled software, cars are becoming just as much Internet browsers as they are family grocery-getters.

Making this bewildering array of technology even more confusing are consumer expectations for autonomous braking and collision avoidance systems, never mind the looming prospect of driverless cars everywhere you look—many of which are predicted to be “on demand” vehicles. It’s enough to make a seasoned automobile executive or veteran design engineer consider an early retirement. Simply put, the digital age has come to the transportation industry … and with a vengeance.

Dealing with Disruption
Fortunately, automakers come armed with their own technologies, ones able to turn this disruptive chaos into calmer waters. Product Lifecycle Management (PLM) software has long provided end-to-end product planning and change management functions, mitigating risk to automakers while speeding the development process. So too have finite element analysis and simulation tools made the engineering analytics superhighway a little more super.

Yet more is needed. Despite their power, these software systems don’t address the latest catchphrase bandied about in automotive trade publications and corporate boardrooms: mobility as a service’. This paradigm shift in the automotive status quo is the unstoppable force behind many of the technologies named earlier, and promises to turn the job of building cars even more challenging in the future.

Going Autonomous
But what does this term really mean? Simply put, mobility as a service (MaaS) may very well spell the decline of personal vehicles. Gone will be the days of two cars in the garage (along with two hefty car payments). Commuting to work—assuming we’re not all telecommuting from home by then—will be accomplished through on demand ride-sharing or self-driving cars, which for a monthly subscription fee will pick you up and bring you to a transportation hub close to the office. From there, you can either walk or grab one of those rent-a-bikes that will soon be popping up everywhere (think how fit you’ll be).

Want to take a family vacation? No problem. Plug your destination into your smart phone (or simply tell Alexa where you want to go), and whatever mobility service you subscribe to will take care of the planes, trains, and automobiles needed to get you there. No more worrying about car insurance. No more vehicle depreciation, or checking the odometer to see if your 3,000-mile oil change is coming due. Just grab whatever car you like and go, or let Google, Lyft, or any of a dozen other ride services do the driving.

What’s all this mean for automakers? For the interim at least, not much, as the need for dependable vehicles (albeit increasingly smart ones) will still exist. But that will soon change, as will the need for drivers. Some industry experts predict that every single OEM will offer fully autonomous vehicles by 2022. And for most of us, that will be a good thing. Maybe I’m still in the minority of automobile drivers, with over four decades behind the wheel, I’ll soon be ready to let a robot take over, assuming, of course, that it will keep me and my loved ones safe. Regardless, the push towards driverless cars will require massive development work, all of it within the next few years.

Along for the Ride
But this technology shift isn’t so much about self-driving cars as about the pace of automotive technology change, and what will be needed to ride the wave. Automotive players have long been under pressure to cut costs, improve fuel efficiency, reduce emissions and vehicle weight. Now they’re faced with the likes of Tesla, Coda Automotive, SABA Motors and other nimble young carmakers who don’t have the massive infrastructure burdens or decades of complex (though effective) engineering processes and practices.

No surprise, embracing technology is likely the key to managing all this while accelerating product development. Dassault Systèmes is one company busy supporting automakers, be they new entrants or established veterans, with transportation and mobility solutions. Built on the 3DEXPERIENCE platform. these offerings help make cars “smart, safe, and connected.” These include PLM analytics-based vehicle program intelligence solutions, systems engineering methodologies, Lean manufacturing capabilities, and validating new vehicle concepts through early consumer involvement, to name a few.

Global auto manufacturers must also increase collaboration, both within and without. It’s only by partnering with tech giants, wireless cellular carriers and Internet providers—and perhaps with one another—that established carmakers will be able to continue their long history of innovation, expand market shares, and above all, remain competitive. Hang on tight, it’s going to be a disruptive future.

Nancy Lesinski
Born and raised in the Motor City by a Donna Reed mom and Corvette engineer dad, my parents were continually surprised that their humanities-loving daughter ended up with a career focused on manufacturing and the automotive industry. I’ve been providing communications services to Dassault Systemes since 2001.
Nancy Lesinski
Nancy Lesinski