Something was different. Here was Marelli CEO David Slump to introduce the Italian supplier’s technology offerings at the CES tech event in Las Vegas, but alongside him were representatives from Amazon’s AWS automotive cloud services division, chip maker Qualcomm and QNX, the operating system from Blackberry used by many car companies.
CEOs didn’t used to share the limelight, but a shift is happening in the supplier sphere that reflects one also occurring among car makers.
As the development of the car progresses from a system designed to create harmony from moving parts to one where software now controls those parts, so traditional suppliers are having to open up the opaque ‘black box’ of their hardware to tech companies to solve problems they couldn’t do on their own.
“Collaboration now goes deeper for us than just our customers. We can't do it without partners,” Slump said.
The shift is being forced by the imperative from car makers to speed up development, along with the knowledge that as a supplier your part will in the future have to communicate seamlessly with an increasingly powerful central computer. It also needs to be improved over time with over-the-air updates and if it could unlock future subscription revenue too, well, that would be great.
“In the past, it was a value chain. Now you have more of a value network of partners talking on eye level,” said Christian Sobottka, president of automotive for Samsung-owned infotainment specialist Harman and former chief technology officer at mega- supplier Bosch.
This requires a change in process at both car maker and suppliers, and that’s not easy. “To a certain degree, it’s a technical challenge, but a much, much larger challenge is the cultural transformation in the industry,” said Sobottka. “The cooperation model of the automotive industry from the past is not good to lead us into the future.”
In the past, that meant car makers defined a set of requirements to suppliers who got on with the task to a set deadline. “This mechanism doesn't work in the transformation challenge. Certain OEMs were trying to apply the old industry model to the new challenge. I think over the last two years, some of them have struggled and failed,” Sobottka said.
The Volkswagen Group’s Cariad software division is held up as the cautionary tale of how not to go about the software transformation. “They try to do everything by their own, but they're more humble now to say, ‘okay, we need to work more with what is existing out there from the key suppliers’,” said Siggi Dirr, head of global engineering services and technologies for Elektrobit, an automotive software company owned by Continental.
Suppliers too are guilty of being complicit in the inflexibility of the industry, argues consultancy firm Deloitte. “Long contractual commitment prohibits transparency and control of the software stack and can lead to ‘black box’ development,” the company wrote in a paper on software-defined vehicles, published in September. “This results in complex supplier orchestration, contract management with long lead times, and the inability to change code in-house.”
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