For the first time, TU Automotive Detroit included four separate tracks: telematics, data and services, autonomy and mobility, reports Susan Kuchinskas
Yet, these trends were not so separate – the mobility and autonomy discussions permeated almost every session on the second day of the conference.
Speaker after speaker emphasised that the industry must put the consumer experience at the centre of innovation efforts. But there is little agreement on what that means – or what will work. In the conference's live audience poll, more than half identified the user experience as the biggest challenge, with security a distant second.
Klas Bendrik, senior vice-president and group CIO of Volvo, gave the second-day opening keynote and hit the customer experience angle hard and often. He said that four domains – sensors, broadband, mobile devices and the cloud – provide the opportunity for new business models in the future. "The connected vehicle and connected customer is a genuine opportunity that is accelerating exponentially," he said. "If automakers don't grab this opportunity, someone else will – like Uber."
Earlier this week, TU Automotive named Volvo Car Maker of the Year, and the company unveiled its connected-car services recently. Two things about Bendrik's role are noteworthy: first, he does not have an automotive background; second, as CIO, he was recently brought onto Volvo's executive team.
Both of these illustrate the new organisational and hiring approaches that many speakers said were critical to success in this rapidly changing environment. Jeff Hannah, director North America, SBD, said his analyst firm recently had interviewed dozens of companies in the space to understand organisational success factors. He said that leadership and culture make the difference.
This was echoed by Brian Simmermon, vice-president and CIO of Subaru of America, which plans to deliver its first connected vehicles in the next four weeks. Because telematics is new to the company, he said, Subaru spent a lot of effort on business process engineering. The result, he said, was, "We don't have a dedicated group in IT or the business that is just doing telematics. Everybody is doing telematics."
Nevertheless, many automotive companies have been slow to make this change, according to Roger C. Lanctot, associate director of the global automotive practice of Strategy Analytics. He said: "Typically, some of the most advanced companies have created connected car teams. They've brought outside people and new thinking in but telematics is still a separate branch of the company."
In a talk with the intriguing title of From Mars to Michigan: Lessons in Autonomous Driving from Space, Dan Noal, senior director for the worldwide automotive sales and solutions group of Wind River, advised: "Pay attention to what disruptors are doing, companies like Tesla and Google." To build the Mars Rover, NASA and JPL brought in academics and partner companies including Wind River. They also had to move from the tight, vertical development model to work collaboratively with outside entities. "Don't integrate in stovepipes," he said.
Big big data
Many of those new business models will come from analysis of all the data generated by connected cars. Amit Jain, director of internet of things, corporate strategy, for Verizon Enterprise, noted that we now create 2.5 quantillion bytes of data every day. It's five times more likely that best-in-class companies use big data to drive decisions, he said, and seven out of 10 companies use it to benchmark themselves and drive competitive advantage.
He gave an example of how automakers could use big data: If they could segment drivers by how many miles they drove and then look at specific demographics to see if they perhaps drive more than average or make more frequent stops. "Can you look at a specific demographics and see if they are driving more or making more frequent stops? Can you now start designing cars differently to meet needs of some profiles and then market them appropriately?" he asked.
Other areas where big data can pay off, he said, include warranty management on the part of OEMs; improved actuarial tables and identifying niche markets by insurers; and dynamic parking rates for increased city revenues.
All this great stuff may be far in the future, however, Scott Frank, vice-president of marketing for Airbiquity, told us: "Data is being collected but a use case has not been developed for the OEM to leverage that either independently or with the dealer."
The autonomy question
While almost all car makers have indicated a clear and strong path toward autonomous vehicles, speakers debated how they will influence everything from car sales to the environment to public transportation.
Bryan Reimer, a research scientist at MIT, thought that we will need a human operator behind the wheel for the foreseeable future – just as highly automated commercial airplanes still require at least two pilots. However, he warned as cars become semi-automated, drivers risk losing their skills because they're so seldom needed. Today, the driver's number of miles travelled in a vehicle is the same as the number of miles driven. In future, Reimer said: "As we drive less miles thanks to automation, we will start creating a population of novice drivers." We may need to require drivers to prove they've maintained their manual driving skills as pilots do.
Finally, if cities have ubiquitous, on-demand passenger vehicles, will public transport wither and die? Will it be the despised last resort of the poor?
One of the big themes of the conference was mobility, defined as the total of a person's transportation choices – with a car as just one of them. And, that car may or may not be personally owned.
Susan Zielinski, managing director of the SMART programme at the University of Michigan Transportation Institute said the goal is to enable more choices, more connections and don't just start with the car.
"The car industry is starting to understand they need to be part of a multimodal strategy," said Dominique Bonte, vice-president and group director for telematics and M2M, at ABI Research. "Multimodal will be a spectrum from car ownership to high-frequency mass transit." He noted that the smartest auto makers will find ways to keep connected with car owners as they step out of the car and onto the train.
Chris Thomas, founder and partner in Fontinalis Partners, an investment firm focused on mobility start-ups, said transportation ideally is a mosaic of all modes of potential traffic. So far, he said, "We've talked about optimising transportation in silos. Instead, each individual should be able to access a unique travel plan that balances cost, time and convenience.
However, despite all the potential new modes of transportation, Lanctot noted that the seasonally adjusted annual sales rate is up, and the US is selling a record number of cars. "Time and again, we hear about Uber and self-driving cars, and car sharing," he said, "but the demand for cars has never been greater."
That's owing, in part, to the wide stretches of the US that are not dense and urban, as well as consumer habit and the very real doubt that a parking space or bus or train will be ready when we want to step out of the car and switch modes.
Tim Evavold, director of automotive delivery for Covisint, said we need to find ways to bridge different forms of transportation. Right now it feels like too much work. "I have to know as transportation lessor that there will be transportation available from A-t-B to C."
The University of Michigan Transportation Research Center's SMART programme has found in community workshops that it may be easier to bridge those modes that city governments may think.
Susan Zielinski, managing director of the programme, said: "In the United States, we are policy-dependent and think transportation planning has to be top-down. But there's opportunity to do so many things much less expensively than building a BRT on top of the subway track." She gave the example of a South African municipality in which a supermarket chain worked with a car-sharing company to install a car pickup station in its lots – which happened to be located next to good bus transportation – independent of the city.
In the City of Detroit, Ted Serbinski, managing director of Techstars Mobility, aims to jumpstart an innovation hub focused on mobility companies, which he defined as anything from Uber and Foursquare to rubber tyres. Techstars is a business accelerator that has a three-month process for start-ups. He introduced 10 companies, most of them at very early stages with very small teams, that will get mentoring from Techstars Mobility partners Ford, McDonalds, Dana, Honda, Magna and Verizon.
Andrew Hart, a director of SBD, closed the mobility track with brief presentations from 10 industry visionaries who shared their insights on how a truly intermodal transportation system would be designed – and how to get there.
Matt Miller, a transportation industry principal of OSIsoft, summed up the consensus like this: "Rethink a holistic infrastructure again, this time with real-time data."
As attendees of TU Detroit 2015 left the conference, it was clear that they had plenty to think about – and to rethink.