Beruflich Dokumente
Kultur Dokumente
Automotive
Automotive 2020
Clarity beyond the chaos
IBM Institute for Business Value
IBM Global Business Services, through the IBM Institute for Business Value,
develops fact-based strategic insights for senior executives around critical public
and private sector issues. This executive brief is based on an in-depth study by
the Institute’s research team. It is part of an ongoing commitment by IBM Global
Business Services to provide analysis and viewpoints that help companies realize
business value. You may contact the authors or send an e-mail to iibv@us.ibm.com
for more information.
Automotive 2020
Clarity beyond the chaos
By Sanjay Rishi, Benjamin Stanley and Kalman Gyimesi
1 Automotive 2020
Enlightened consumers will expect their among various industry segments threaten
vehicles to provide information, entertainment, critical collaborative factors such as adoption
safety and convenience. They will demand of common standards, information manage-
economy, environmental responsibility and ment and data ownership. These differences
sustainability. To meet these demands, vehicles provide a threat and will, if not addressed,
will become more intelligent, offer “greener” retard progress.
operation and be customizable to greater “self
expression” by buyers. As worldwide oil prices The impact of external forces on the industry
continue to surge, alternative powertrains will will continue to be significant, but the leading
dominate new production. influencers will be radically different from those
that affect the industry today. Technology
Even the notion of “buying” as we know it will continue to develop at breakneck speed
today is expected to change. The concept of and will accelerate innovation in the vehicle,
personal mobility will prompt consumers to touching everything from performance to
purchase “transportation services” in place of enhancements in safety and convenience.
personal vehicles for multiple uses. Sustainability, already an issue, will migrate
to near the top of the list for the automotive
The worldwide labor force will change and, value net. Unparalleled investments will make
by 2020, become radically different in terms tremendous inroads for fuel efficiency, but
of age, location and the way people work. unbridled and oft-impractical consumer and
Cultural awareness, diversity and adapta- regulatory expectations will stay ahead of
tion will be the norm. This global workforce, possible achievement, which may lead to disil-
with a geographically dispersed footprint for lusionment.
manufacturing and product development,
will sustain and support the industry in 2020. Consumers will also become increasingly
The current investments in globalization will watchful and wary about how companies
be established and a global infrastructure will perform outside the manufacturing and
essentially be in place. Evolving economies distribution processes. Corporate social
and markets will fuel new products, services responsibility will become markedly more
and business models. The challenge faced important to the consumer and will become
by automakers will no longer be to globalize an imperative by which automotive enterprises
the industry, but will instead center on effective will be evaluated.
global integration and execution.
Ultimately, executives we interviewed felt that
Collaboration throughout the automotive value to be well positioned for the market of 2020,
net will be a necessity for those intent upon automotive companies must anticipate beyond
succeeding. Automakers will need to develop the expected: a new competitive landscape,
alliances and partnerships aggressively, both rapidly evolving technologies, a departure
within and beyond the traditional boundaries from the traditional ecosystem, fresh attitudes
of the industry. Today, divergent viewpoints about mobility and, above all, a very different
consumer.
22 IBM
IBMGlobal
GlobalBusiness
BusinessServices
Services
Automotive 2020
Clarity beyond the chaos
3 Automotive 2020
Corporate social FIGURE 1.
responsibility is Anticipated change in external forces impacting the industry, 2008-2020.
expected to become 61%
a top priority for the Technology progress 56%
60%
automotive industry. Globalization 55%
26%
25%
Corporate social responsibility 14% 22%
Global labor force 13% 13%
Personal mobility 12%
Intelligent
The new definition of mobility will be represented
vehicle
with an innovative ownership profile – one in
Sophisticated which the purchase or lease of a vehicle provides
consumer
access to a diverse “garage” of vehicles.
Dynamic
operations
The consumer of 2020 is more likely to be
interested in flexible access to different types
of transportation. Primary ownership profiles
Source: IBM Global Business Services. are likely to shift to the small luxury segment
in line with “median needs” (primary daily
needs). Bundled in the price would be scal-
These new, sophisticated consumers will able access to additional vehicles. Lifestyle
prompt the automotive ecosystem to respond changes will allow access to luxury or larger
to their needs and demands by: vehicles during weekends, as an example,
• Redefining mobility as we now know it while a small, efficient vehicle will suffice for
daily commuting needs. This model would
• Developing new and alternative finance
impact the aggregate production profile for
mechanisms with the potential to generate
vehicle segments.
innovative business models
• Creating new methods to connect with and The other part of this equation is the integra-
retain consumers. tion of multiple modes of transportation. The
emergence of “mega cities” and the growth in
“The industry has become more public and alternative transportation options
will be a key influencer to changing lifestyles.
consumer driven . . . The consumer
This will necessitate the creation of a seam-
will be dictating the terms.” less mobility experience between automobiles
– Indian automotive OEM executive and these alternatives. The industry will need
to respond with ownership models and tech-
Mobility redefined nology to integrate these options.
As consumers become even more selective
and demanding in their quest for satisfac-
tion, they are changing the way they move
about. By 2020, consumers will have rede-
5 Automotive 2020
New finance mechanisms In some geographies, there is an alarming change Usable battery (lithium-ion) life for automo-
in the century-long love affair with the automobile. tive applications is estimated at about 10
will be required to
years. Interestingly, this battery will have an
make battery-powered Passion for automobiles is on the decline,
even longer life for non-automotive applica-
powertrains affordable somewhat driven by environmental concerns,
tions, such as its energy storage potential for
for consumers. but also due to changing lifestyles. While
power grids. The average vehicle in the devel-
newly affluent populations in emerging
oped world is financed for 3-5 years and the
markets aspire for their first experiences with
emerging world is expected to follow suit. The
the automobile, established customer bases
opportunity to split the vehicle from the battery
may weaken.
for purchase/lease/finance purposes is a real
option. Discreet amortization schedules for the
“Personal mobility is attitude two would make battery technology afford-
flexibility.” able and help increase proliferation of hybrid
– European automotive association executive and electric powertrains by neutralizing the
premium that is currently charged.
Financing evolved
It is evident that the “garage” approach will Retention transformed
impact vehicle financing models. Offerings Perhaps the most significant change facing
will include predefined access to a broader the industry will be a shift in consumer buying
selection of vehicles included in the monthly criteria that goes beyond – and, in fact, is unre-
payments. Enhanced services (dealer or third- lated to – vehicle performance (see Figure 3).
party based) would make it a more attractive The increased emphasis on environmental,
cost and convenience alternative to the safety, personalization, traffic congestion and
current rental model. alternative transportation will have a major
impact on how and what people choose for
The advent of alternative powertrains – in their mobility needs. Traditional criteria such as
particular the anticipated growth of battery price, reliability and brand will have much less
technology – will also require new finance an impact in the decision process of the future
mechanisms. The cost of batteries, unless consumer.
compensated via these innovative mecha-
nisms, will be a significant barrier to rapid Automotive dealerships may have the most to
penetration across all segments. Executives gain or lose by how they communicate their
we interviewed estimate battery cost to be value. New retail models will emerge. Vehicles,
as high as 10-15 percent of the total cost of conceivably, could be sold directly to the
vehicles in certain segments, significantly consumer, outside today’s brick-and-mortar
higher than current internal combustion engine outlets. In certain markets, like the United
configurations. States, dealers enjoy regulatory protection.
Emerging markets are not likely to adopt these
While this need will likely spawn a multi- restrictive practices.
tude of innovative solutions, our interviews
revealed one particular scenario of promise:
Regardless of the regulatory environments, the Glimpses of technologies that will shape the
traditional value definition for dealerships is vehicle of 2020 are becoming visible today.
expected to decline significantly. Erosion of long- Telematics is coming of age. Active safety
established regulatory protections over time is a technologies that sense and respond to
likely reality, as consumers become intolerant of driving behaviors and road conditions are
inflexibility. becoming common in mid- to upper-tier
vehicles in the developed world. Entertainment
Dealerships, especially large dealer groups, choices and navigation have seen rapid
have begun to recognize this threat. Prosperity adoption in recent years. And powertrain
will be reserved for those that focus on innovations are making their way out of engi-
customer intimacy and robust relation- neering workstations and into vehicles around
ship management supported by intense the world.
information management, a wide range of
personalization offerings and new heights of The extension of this vision for the vehicle of
service. Technologies, including telematics and the not-so-distant future reveals an autono-
remote prognostics, will allow dealerships to mous vehicle smart enough to sense its
provide a “sense and respond” approach to surroundings and navigate through traffic
building customer loyalty. safely and efficiently, all the while allowing its
occupants the luxury of personalized comfort
Irrespective of which scenario eventually and convenience. Ultimately, this vehicle would
plays out, it is clear that dealers are now at a represent a seamless transition from life within
crossroads. They should look to develop and the vehicle to life outside it.
implement programs and services that will
re-establish and maintain their value to the
consumer.
7 Automotive 2020
Some degree of Can we expect significant progress by 2020 Battery technology will be ubiquitous.
towards this vision? Absolutely! Is this vision Lithium-ion technology holds the most promise
hybridization will
achievable in its entirety by 2020? Probably and will see considerable investment and
be evident in all
not. growth.
vehicles produced in
2020 and beyond. The vehicle of 2020 will be characterized by Micro, mild and full hybridization is undergoing
several significant developments that, although extensive development today. All new vehicles
implemented in incremental steps over the in 2020 will have some level of hybridization.
next 12 years, will make it remarkably different • Micro hybrids with stop-start capability and
from today. A fierce focus on innovation across regenerative braking hold the potential
the broad automotive landscape will be to make sizeable contributions to carbon
concentrated on software, electrical systems, emission reduction and lower fossil fuel
electronics, engine and auxiliary systems, and consumption. Current projections include
powertrain (see Figure 4). estimates of up to 10 percent reduction in
carbon emissions and fuel savings of up
to 13 percent under certain driving condi-
FIGURE 4. 1
tions.
Level of innovation in various aspects of the
vehicle by 2020. • Mild hybrids, designed to provide extra
Software power as needed but incapable of propel-
How can we assist
Electrical systems the occupants? ling the vehicle alone, are gaining attention,
Engine and auxiliary systems with several OEMs announcing agreements
How will the vehicle
Powertrain be powered? to collaborate and develop this technology.
Body structure (frame) • Full hybrids, not unlike some vehicles avail-
Interior What is de-
able today (powered exclusively by the
Chasis emphasized? electric motor under certain operating
Body exterior (skin) conditions) will continue to see extensive
development. Alternative financing models
1 2 3 4 5
Low High will fuel the affordability of this technology
for consumers.
Source: IBM Automotive 2020 Global Study.
Hydrogen fuel-cell vehicles will remain a viable
alternative, but even optimistic projections
The resulting vehicles will be characterized by put only a small fraction of vehicle produc-
the following: tion migrating to this technology (less than
1 percent of vehicles in the United States,
The green vehicle according to a study by the U.S. National
Executives we interviewed project an unam- Research Council).
2
9 Automotive 2020
The connected vehicle FIGURE 5.
Executive ratings of the global portfolio of new vehicle production in 2020 with regard to producing
will allow automated environmentally friendly vehicles.
response to developing Fuel (percent of total fuel is based on fossil fuels)
2008 2020
traffic situations and
will provide increased 95% 80% 60% 40% 20% 0%
safety, driver assistance 65%
Air (average level of CO2 emissions per vehicle in g/km)
and enhanced service.
2008 2020
Applications well under development today and projected to be pervasive in all new vehicles
by 2020
Safety
• Intersection control violations
• Lane/road departure
• Road surface and pavement conditions
• 360/distance vision
• Active suspension and stability control.
Driver assistance
• Dynamic route guidance and navigation
• Motorist information on incidents, special events, weather and work zones
• Data downloads (entertainment, media, home network, personal preferences)
• Recovery of stolen vehicles
• Electronic payments including toll, drive-through, parking, road pricing.
Service
• Remote vehicle diagnostics
• Remote vehicle prognostics and self healing
• Transfer of vehicle data based on warranty
• Customer relations management including vehicle use profiles and dealer use data
• Driving-based behavior service/scheduling/alerts/notification.
Sources: Automotive 2020 Global Study; 2008 CAR Delphi Survey of the Telematics Industry.
11 Automotive 2020
Global standards By 2020, all new vehicles will have connectivity The final key will be the rate of consumer
will be essential in features. The extent to which these capabilities adoption. In an environment of steadily
making the connected will be both utilized and effective, however, will increasing prices, cost will be a significant
vehicle a reality. depend upon several issues, including adop- factor for the consumer in determining the
tion of industrywide standards, technology level of connectivity that will be accepted.
capability and consumer acceptance (see Drivers are likely to have reservations
Figure 6). about how much control they are willing to
turn over to the vehicle in crisis situations.
Executives interviewed agreed that the Privacy issues, such as the degree to which
greatest barrier is the creation of global stan- consumers are willing to share personal infor-
dards. Companies throughout the value net, mation, will also be a concern.
including external players such as government
and telecommunications companies, will need The benefits of full connectivity will not be
to work together to establish a common plat- realized until an advanced degree of conver-
form that enables vehicles and components sion is available for legacy vehicles or there
from different manufacturers and geographic is a greater turnover to post-2020 machines.
locations to communicate seamlessly. We anticipate aftermarket products will be
available to give older automobiles basic
Secondly, technology development, particu- connectivity capabilities.
larly in the area of sensors, must continue.
However, because relatively less collaboration The most significant differences in vehicle
is necessary in this arena, it is likely to be the connectivity by geographic region in 2020 are
easier capability to enable. likely to occur in areas that require government
investment. Developed nations, particularly
FIGURE 6. Japan, Germany and the United States are
Factors in adoption of connected vehicle. expected to be the leaders in both innovating
Adoption of standards and establishing the required infrastructure.
Technology capability Other countries actively engaged in promoting
Consumer acceptance connectivity include Korea, China and
Data management Sweden.
Auto company cooperation
3. Dynamic operations
Data ownership
Emerging as a winner in 2020 will require an
Government investment
innovation-led approach to multiple factors,
Enabling the vehicle base
including growth strategies, the workforce,
1 2 3 4 5 redefinition of “core” businesses and proactive
Low High
flexibility.
Source: IBM Automotive 2020 Global Study.
FIGURE 7.
Industry segment growth orientation.
Opportunities for growth by 2020 Alignment
Development in emerging markets
OEMs
Targeting new customer segments Suppliers
Developing new business models Others
Leveraging disruptive technology
Creation of services-based offerings
Creation of new product categories
Forming new JVs/partnerships
Collaborating with other industries
Independent Partnership
Source: IBM Automotive 2020 Global Study. orientation orientation
13 Automotive 2020
Skills for the multiplex With the proliferation of electronics and soft- Traditional organizational models will be trans-
ware within the vehicle, OEMs will need to formed. Corporate functions currently housed
workforce will be
elevate current levels of integration and soft- in, or close to, company headquarters will see
heavily weighted
ware lifecycle management. geographic distribution. Leadership models will
toward creation of the become further matrixed.
intelligent vehicle. The multiplex workforce
By 2020, investments currently underway in The skills required for this new workforce tilt
globalization will be largely established. The heavily toward the intelligent vehicle of the
challenge will be to execute in this expan- future. As Figure 8 shows, the highest rated
sive environment, leading to the need for a skills for 2020 focus around engineering,
multiplex workforce. As with a “multiplexor” in management, product planning and software
electronics, the multiplex workforce enables development. The industry will need to bring
the diverse skills and culture that are a all of these skills into play. Skills in finance,
byproduct of globalization and unites them into procurement and production were underrated
common goals and direction. This new work- by executives, but will have important roles in
force will have important new attributes, such effective global execution.
as the ability to work across diverse cultures
and will likely be conversant in multiple
languages. The new global worker will also be
effective working virtually.
FIGURE 8.
Critical industry skills by region.
Engineering
Management
Product planning
Software development
Design
Marketing/selling
Service technician
Finance U.S./Canada
Western Europe
Procurement Japan/S. Korea
Production Emerging countries
Global average
0% 20% 40% 60% 80% 100%
Source: IBM Automotive 2020 Global Study.
Those auto companies that are financial In addition to innovating growth strate-
outperformers consistently rated workplace gies and effectively managing the multiplex
capabilities, such as fostering a culture that workforce, market dynamics will prompt
supports learning, knowledge transfer to inex- automotive companies to redefine the core
perienced workers and attracting employees of their businesses. As new business models
to the industry, higher than the their underper- emerge among the various industries that will
forming peers. collaborate with auto companies, new defini-
tions of what is core will apply. For example,
An additional key to enabling the multiplex
requirements for increased product innova-
workforce to reach its potential will be the
FIGURE 9.
Primary capability challenges facing the industry between now and 2020.
Building leadership talent
Fostering a culture that supports learning/development
Knowledge transfer to inexperienced employees
Rotating leadership talent across business units/geos
Attracting employees to work in industry
Communication skills
Re-skilling the workforce
Rapidly getting new employees up to speed
Leveraging the diversity of the workforce
Developing basic skills across the employee base
1 2 3 4 5
Source: IBM Automotive 2020 Global Study. Limited Best
15 Automotive 2020
Proactive flexibility tion will spur suppliers to develop greater • Core product development will happen
core competencies in energy, materials and in both mature and emerging markets.
will be required
electronics. And the mandates of marketing, Industry executives believe that, in addition
to keep pace with
selling and after-sales innovation will lead to available talent, the unique combination
both the needs of OEMs to develop greater core competencies of excitement, entrepreneurship and inno-
the consumer and more tightly linked to product innovation and vative skills in developing economies will
with interdependent consumer strategy. OEMs will also need to be allow for homogeneous distribution of these
ecosystems. resource integrators across the automotive activities.
value net. • Application development will also be
distributed and not limited to today’s model
“By 2020, the traditional OEM will that splits core development to developed
be the vehicle integrators, product markets and application development to
innovators, customization centers emerging markets.
17 Automotive 2020
Collaboration must Interdependent ecosystem • Partnerships with the telecommunications
industry for connected vehicle communica-
extend past individual
Consumers, regulatory and environmental require- tion technology
companies and ments compel the auto industry to extend outside
• Cooperation with the financial services
embrace every element the borders of its own ecosystem to tap into the
industry to develop new financing models
of the ecosystem. innovation and resources of others.
and automated payment of parking, tolls
and other services
Winning in the marketplace starts with the
ability to work with other industry ecosys- • Association with government for infrastruc-
tems to identify innovative solutions quickly ture improvements to enable the connected
(see Figure 10). The relentless push to work vehicle and regulatory requirements for fuel
with other industries will bring differentiating economy, environmental issues and incen-
mobility solutions to consumers. Some of tives to drive the conversion to cleaner
these innovations will include: technologies.
• Collaboration with the consumer electronics This collaborative effort must also extend past
industry for in-vehicle electronics and just the individual companies and institutions
software, as well as development of the to their consumers, communities and geogra-
battery phies in order to tap into ideas for innovation
and identify marketplace wants and needs.
• Collaboration with the energy/ utilities
industry for alternative fuel and energy
sources
FIGURE 10.
Interdependent ecosystems.
Global consumers
Other
ecosystems
Government/ Consumer
Transportation electronics
Other industries
Telco Energy
Software
Financial services
Biotechnology
Communities
19 Automotive 2020
Changes in the The intersection between ecosystems that have The changes in the ecosystem outlined are not
varying product lifecycles, different rates of visions of a distant future. Most are well under
automotive ecosystem
innovation and competing priorities will be fertile way today and hold the promise of maturity.
are underway today ground for new sub-industries to emerge and fill
and are accelerating. the gaps between industries by providing new, Based on our interviews and other research,
white-space services and solutions. we have defined five imperatives we believe
likely to separate the outperformers from the
Examples of types of companies that may rest in the automotive world of 2020 (see
emerge include: Figure 12).
21 Automotive 2020
Integration software, and a sizeable portion from compa- Partner extensively
nies outside the traditional automotive industry. The increasing cost of innovation is unsus-
management will
A lack of common standards causes integra- tainable for individual companies. We believe
become increasingly
tion issues with external industry components, the successful company of 2020 will extend
complex as technology and integration management promises to outside the industry for innovation and will
advances. multiply in complexity with growth in tech- work with others to solve common issues. To
nology. To overcome these challenges, do so will require the industry to:
automakers should simplify the increased • Extend the ecosystem – Automotive
complexity in the vehicle to enable rapid companies should reevaluate what is core,
technology adoption. The foundation to this both in the business and in the vehicle, and
simplification is common processes. The prolif- then find business partners that comple-
eration of processes within each company and ment them. They will need to develop a
across companies is crippling and will worsen common partnering platform to enable
in light of the exponential growth of electronics cross industry collaboration that includes
and software in the vehicle. Our recommenda- rules, IP protection, risk and reward sharing
tion is to: and the ability to quickly engage/disengage.
• Standardize and integrate – OEMs must own Further, they should look to leverage
the integration management process and other industry forums, communities and
architecture. Standardization is an impera- consumers to widen their enterprise innova-
tive to allow for incorporation of traditional tion networks. Together, the industry can be
and non-traditional supplier innovation. much larger than the sum of its individual
Common specifications should be estab- parts.
lished for the intelligence being served • Engage in collective partnering –
to the vehicle – instead of the intelligence Automakers should consider extending
being resident in the vehicle. This should the partnering concept to bring together
allow for both easier upgrades and simplify a diverse group of companies (OEMs,
repair. Standardization and integration must suppliers, other industries) to focus on
go beyond the vehicle. solving critical problems, such as vehicle
• Modularize to modernize – “Plug and play” energy consumption. The development of
capability will allow consumers to customize value sharing models can enable all partici-
the vehicle based on their personal require- pants to leverage innovations, while sharing
ments. Modular design will provide greater in cost and risk.
flexibility to “swap out” energy and power
components to allow for upgrades and tech-
nology improvements without having to buy
a new vehicle. The rate of adoption for future
V2x capabilities will be improved through
the ability to install safety, service and driver
assist modules in the existing vehicle popu-
lation.
23 Automotive 2020
About the authors Contributors
Sanjay Rishi is Vice President and Global Rishi M Agarwal, Senior Consultant, Strategy &
Automotive Industry Leader for IBM. He has Change Global Delivery, IBM Global Business
over 20 years of progressive consulting and Services, India.
industry experience leading large, global,
multifunctional transformation programs in the Prasun Ray, Consultant, Strategy & Change
automotive industry. Mr. Rishi has worked with Global Delivery, IBM Global Business Services,
numerous automotive OEMs and suppliers India.
across the globe. His industry experience Acknowledgements
includes leadership of product engineering We would like to thank all of our clients and
and manufacturing organizations. Prior to executives that were so giving of their time
joining IBM, Mr. Rishi was a Partner with during the interviews for this study, as well as
PricewaterhouseCoopers. He can be reached our IBM Automotive Team, which conducted
at sanjay.rishi@us.ibm.com. all the interviews worldwide. Everyone’s enthu-
Benjamin Stanley is Global Automotive siasm made this study possible and provided
Industry Strategy Lead for IBM. He has over countless learnings.
30 years of consulting and industry experi- Also, we would like to extend a special thanks
ence in the automotive industry, including to The Economist Intelligence Unit for its assis-
strategy, product engineering, supply chain tance in conducting interviews.
and international logistics. Mr. Stanley uses
his background and experience to develop
About IBM Global Business Services
insights and direction for the IBM global auto-
With business experts in more than 160
motive practice. Prior to joining IBM, Mr. Stanley
countries, IBM Global Business Services
was an Account Executive for EDS and Senior provides clients with deep business process
Product Designer for Delphi Automotive. He and industry expertise across 17 industries,
can be reached at bstanley@us.ibm.com. using innovation to identify, create and deliver
Kalman Gyimesi is an Associate Partner with value faster. We draw on the full breadth of IBM
IBM Global Services and is the Industrial capabilities, standing behind our advice to
Practice Leader within the Institute for help clients innovate and implement solutions
Business Value. He has over 20 years of designed to deliver business outcomes with
experience in industry and consulting, where far-reaching impact and sustainable results.
he has led the implementation of business
solutions to difficult problems. He has worked
on diagnostic and re-engineering projects
with both automotive OEMs and suppliers.
Mr. Gyimesi’s expertise ranges from business
strategy and supply chain management to
RFID technology and intellectual property
assets. He can be contacted at gyimesi@
us.ibm.com.
25 Automotive 2020
© Copyright IBM Corporation 2008
GBE03079-USEN-00