Weekly News Review | 8 August 2016 | Automotive Purchasing and Supply Chain Automotive Purchasing and Supply Chain

Talking Point

OEMs struggling with weighty infrastructure costs

As second quarter results have come in from OEMs and suppliers, Simon Duval Smith compares costs and profits.

Coming just as Tesla has announced it will part company with autonomous driving systems supplier Mobileye as a partner in the wake of the fatal crash in the US, the supplier has recorded a second quarter (2Q) net income of $27 million, up from $15.3 million in the same period last year. This brings into sharp focus the torrid time that OEMs are having with introducing new technology and maintaining profits, and the relatively golden period being enjoyed by many tier suppliers.

Mobileye co-founder, President and CEO, Ziv Aviram, said: “In addition to winning new ADAS programmes and new tier one partnerships, we have begun an expansion of our value proposition by creating partnerships with automakers and others in order to bring fully autonomous driving to volume production within the next five years.”

Partnerships and new programmes are the key words here. There is little doubt that every carmaker will need a self-driving technology partner, as well as needing to offer its customers the latest (or almost the latest) infotainment, integrated navigation and safety management systems. There are more than enough OEMs to go round as customers and partners for the systems and software providers so Mobileye will likely come out better than Tesla from the recent tragic incident, Mobileye’s EyeQ system-on-a-chip being already found inside most semi-autonomous cars on the road, and Aviram has said of the supplier’s plans: “The BMW/Intel/Mobileye partnership is the first significant collaboration of this type and we anticipate others. Overall, we believe we have made important progress in advancing our strategy of securing a significant, long-term presence in all levels of autonomous driving.”

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