The technological evolution of the automobile is moving to the next stage as the mechanical engineering of the machine converges with the digital science of the Internet age. This next cycle of technology will have impact not only on the design and operation of the vehicle itself but also on consumer behavior and how people engage with their cars.
From an engineering standpoint, there are multiple levels of innovation unfolding in automotive design. Certainly, ongoing enhancements to the venerable combustion engine are noteworthy, delivering better and better fuel mileage and cleaner emissions. These developments, while important, can be seen as variations on a theme, as in-house engineers “tinker” with the existing machine. New or modified components are designed with the current supplier network and produced in updated assembly plants.
Regardless of the eventual scale of its commercial impact, the development of the Tesla is a breakthrough because the development occurred largely outside the existing industry infrastructure. The guy who started PayPal conceived of and executed a completely new design for an electric vehicle – a high-torque electric motor with no gearbox.
The Tesla folks didn’t think of themselves as a “carmaker” but more as an energy innovator. That allowed them to rethink energy storage, which led to the Tesla’s lithium-ion battery pack. Of course, now they are building a ginormous facility to make their own batteries. And, the Tesla cars won’t be the only use for these batteries; ultimately, they can be used for energy storage in houses and commercial buildings.
This is another example of big-time “disruptive” innovation from Silicon Valley entrepreneurs that forces all the incumbent players in established sectors to take notice, not only of the innovation itself, but the business model. The difference this time is that the disruptive wave is coming to the automotive industry, our industry.
It is interesting to note that Apple also appears to be taking an interest in automobiles. Whether they will actually assemble a car is unlikely; Apple’s interest is in how a vehicle could fit into its vaunted ecosystem. It isn’t hard to imagine an “i-dashboard” in tomorrow’s vehicles, taking what Jobs invented to the next level.
Who knows? Ford or BMW could be an Apple “carrier,” the way AT&T was a channel for bringing the iPhone to the public.
Of course, the Google guys have made a lot of noise about “driverless” cars, which in a sense would make cars function like drones, on the ground. Where traditional automotive players incrementally advanced features such as cruise control, crash sensors and rear cameras, an outside player like Google, coming from a completely different perspective, is applying today’s science to actually pilot the vehicle.
In addition, we now have the next wave beyond Internet 2.0 and the Cloud. Today, the buzz is about the “Internet of Things” – using wireless access and digital tools to program and control everything in your home from the thermostat to the fridge. After one’s house, the second biggest “thing” in most people’s lives is their car. Thus, “connectivity” is upon us: continuous two-way communication remotely from person to car, from car to car and from car to some mothership somewhere.
This “connectivity” over the very long term could pose a significant challenge to the independent aftermarket service channel, particularly if some sort of proprietary link connects the vehicle performance only to the parent OEM. Therein, the likely next frontier is ensuring consumer choice in auto care. In the meantime, consumers are already “connected” via their smartphones and tablets. The immediate challenge is how to engage the driving public online so as to impact their parts and service decisions. This dramatically increases industry activity on the Web as the automotive aftermarket catches up to other consumer categories with increased resources and talent in digital marketing, social media and predictive analytics. And, while Uber is the most hyped new venture looking to redefine vehicle usage, there are surely all sorts of start-ups and apps being developed that could in some way impact the auto care process.
All in all, these are exciting times for the automotive industry as new “outsider” players enter the sector, with creative ideas and world-class talent, not to mention incredible access to capital. In both vehicle research & development and consumer auto care, the groundwork is being set for a fascinating future.
About the Author
Jay Burkhart (Burkhart.jay@gmail .com)
Jay Burkhart is a well-known industry leader with broad executive experience across both the auto care and consumer packaged goods sectors. Jay was most recently at Federal-Mogul, where he held severalpositions, including vice president, global aftermarket. Prior to that, Jay was global vice president, marketing at Tenneco Automotive. Known for leading successful product strategies, including Wagner Thermo-Quiet and Monroe Sensa-Trac, he has also been recognized for his leadership ability and is a past winner of the AWDA Pursuit of Excellence Award. Jay came to the automotive industry after a career in the food industry, including various brand management roles in the grocery portfolio at Beatrice Group (now ConAgra).
