22 April 2019

The power to connect may outweigh the power of the OEM

Talking to David Holocek, Director of Connected Products and Services at Volvo Car Group recently, we discussed the challenge faced by OEMs in harnessing the computing power of the future connected and autonomous vehicle and how outside agencies would have to not only contribute but even lead carmakers into this brave new world of connectivity.

There is no one OEM who is big enough to afford to make the climate to create global standards and thus major service players such as Google, Amazon, Vodafone and so on will be the drivers of connectivity communications and possibly even vehicle specification in the future.

I can foresee these service providers taking over a lot of the coordination and data sharing for and on behalf of the OEMs.

Of course this is risky but will the accelerating pace of change in our industry - we really do not have a choice.

Soon after talking to David, I got the news that the world’s largest dash cam manufacturer has chosen to partner with a UK insurance provider. This is exactly the type of formerly unusual union that will be needed in the future. The wording of the camera maker’s news release was very revealing; a technology partnership to deliver a fully integrated telematics dash cam solution for the motor insurance industry. Not, you may note, for the camera vendor or even for the driver but for the element of the relationship that will come under the greatest scrutiny and pressure in the future as autonomous vehicles proliferate and the question of liability looms larger than ever. For while this partnership will ultimately providing lower premiums to drivers, we will not fool ourselves that it is only for the benefit of the driver’s purse; the insurance are thinking ahead, in a way that some of our industry could do well to copy.

In the auto industry, we have more innovation platforms evolving now than we have had since the 1800s or early 1900s. In those times we saw three innovation platforms: the telephone, electricity, and the internal combustion engine. Tech gurus tell me that we now have five: DNA sequencing, robotics, energy storage, deep learning, and blockchain technology.

The auto industry will have to face the fact that it is not the tech leader it once was and perhaps it will have to give up some of its power to the great connectivity corporations of the future.

Simon Duval Smith

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