SATISH BURLI is VP-Technology & Solutions, Product Engineering Services at Sasken
The automotive industry, today, is an interesting combination of age-old engineering driven by factors such as efficiency, scale and material design, along with new-age electronics driven by speed, connectivity, graphics, and cognitive sensors. Automotive sales have been influenced by various factors, including regulation, necessity, demographics and status. The industry is getting transformed and the next two years will see some major disruptions, which will define the shape of the industry for the next decade.
Two major trends that will have a significant impact on the industry are autonomous driving and the transformation from fuel-based drivetrains to electrical ones. While these trends are being discussed widely, there are other trends that will also have significant impact on this sector.
The ‘uberisation’ of rides is a fast growing trend. There is an average of 15 mn ride-hailing trips a day globally, which is expected to grow to 97 mn by 2030 transforming the $ 36 bn industry into a $ 285 bn one . There are various factors influencing ride sharing and ride hailing business models such as cost, convenience, environment, traffic, and parking hassles to name a few. However, this has not impacted car sales in the short term as the industry has seen a 3.6% (YoY) growth .
A similar growth is expected this year and the reasons for this are the fact that ride shares and hailed rides still are a small component of the total number of rides. Further, the ride-share/hail industry is expanding and they are adding more vehicles and drivers to the pool. In the next three to five years, ride sharing and hailing will start impacting the industry due to the rapid penetration of apps and increase in the number of people using these services.
The smartphone effect is another trend affecting the automotive infotainment system. It is estimated that by the end of the next decade (2030), 50 % of the total car cost will be automotive electronics . Body electronics and sensors will be vectors of growth along with infotainment systems. From 2009 to 2016, smartphones sales grew from 170 mn units to 1.5 bn units. This was driven by the massive penetration of Android in this space which grew from 2 % in 2009 to the current 85 % .
Smartphone sales have plateaued over the last couple of years and a similar trend is being observed in the automotive space as well. While Android has become the OS of choice for mid and high-end segments of cars, newer chipsets and cost optimised platform derivatives are driving Android-based systems to low-end cars, trucks and aviation. Android will create a similar disruption and capture the automotive industry as it did with the smartphone industry.
Connected vehicles sales – as a percentage of total vehicle sales – is expected to reach 100 % within the next five to eight years. There are two modes of connectivity – vehicle-to-infrastructure/network (V2I/N) and vehicle-to-vehicle (V2V). The emergence of C-V2X (cellular V2X) as a technology supporting both these modes will accelerate the sale of vehicles with OEM-fitted telematics units supporting network connectivity for various infotainment and connectivity services, along with V2V connectivity for enhanced driver and pedestrian safety and local-domain commerce.
Several governments across the world are working towards mandating the use of V2V and V2I/N technologies, which will dramatically change the way vehicles will behave on the road. This trend will also complement autonomous driving, as the technology will bring superior knowledge of vehicle’s environment compared to sensor and vision-based technologies.
Artificial intelligence, vision and sensor driven disruptive ADAS technologies developed towards autonomous driving are still under evolution and in the investment phase. While the core technology is proven to a great extent, it will take considerable investment, time and change in regulatory environment before large scale adoption is seen. Even so, some of the most advanced nations are at least five years from deploying autonomous vehicles commercially in some shape or form, though a lot of trials are being conducted.