Mastering Transformation

How do Legacy Companies become Sustainable and Smart Mobility Providers?

The challenges are well known - but the automotive world still seems to be having difficulty finding suitable solutions. Long-time industry expert and consultant Joachim Langenwalter summarizes his diagnosis of the current situation in this short denominator: “Both automobile manufacturers and suppliers are undeniably facing a fundamental change – from legacy companies to sustainable, smart mobility providers. But the entire European industry has obviously not yet found suitable answers to these challenges.”

Joachim Langenwalter, who will take part in a panel discussion on the topic of transformation as part of the International VDI Congress ELIV 2023, believes that OEMs in particular are not yet adequately prepared for the changes: “Manufacturers in Europe are obviously having a difficult time with the transformation and to shape the associated cultural change.” The industry expert includes strengthening one's own technology competencies, closer cooperation with technology companies or the use of shared platforms as possible solutions for a successful transformation process. “It would be ideal to set up the software units from scratch – with a high level of expertise that is able to make decisions at a real expert level.”

In Competition for Talent

In addition, both automobile manufacturers and suppliers face the additional challenge of having to compete against tech giants and start-ups when recruiting young talent in the areas of software and artificial intelligence (AI). “For many aspiring programmers and AI experts, these tech companies are currently much more attractive than traditional automobile manufacturers. The automotive industry sometimes tries to compensate for this based on the motto of mass instead of quality - but this is not effective in software and AI projects, as some manufacturers have already learned the hard way.

Keep the Data Flood manageable

A core issue at the technological level, to which no convincing answers have yet been found, concerns the area of ​​big data: Langenwalter further emphasizes that it is not sufficient to collect as much data as possible arbitrarily: “It is more targeted to select beforehand which data is really useful can be used and how they can be evaluated in an efficient form.” To do this, the computing power and storage space in the vehicle must be increased in order to enable intelligent selection and to test the new functions in shadow mode after the software update.

In addition, a data factory is also necessary in which targeted solutions can be created from the selected data. The combined use of intelligent selection and testing in the vehicle leads to cost reduction in the area of ​​data factory (storage, processing), hardware-in-the-loop systems, data-based decision making (now through customer surveys), shortened development time and better customer orientation, and ultimately to a fly wheel supports customer growth. Langenwalter: “Both OEMs and suppliers are currently still too weakly positioned in this respect.”

Reduce Product Complexity

According to the experts, the path to electrified mobility and the growing importance of sharing services and other mobility providers also makes it necessary to reduce the complexity of the model range. It must be possible to safely test the new features with as few hardware variants as possible and thus bring them to the customer as quickly as possible, thereby increasing their satisfaction and ultimately accelerating growth "Today, every new function is tested and homologated with different combinations of architectures, platforms, screens, processors, control devices, etc. and therefore only comes onto the market after many months or years - and therefore far behind the OEM startups from China or Tesla. This also requires the ability to master the interaction between AI, software, processor and hardware. This is why you need these young talents in the company and in the partner network.

Cultural Change at the Management Level

With the emergence of new competitors, different ways of thinking come together, Langenwalter concludes: “On the one hand, there are automobile managers with their more traditional top-down approach that it is best to plan systems over the years and mainly just integrate them. And on the other hand, there are agile providers who consciously focus on flexibility and align their vehicle and software architectures with possible future features that they are not yet aware of today. There is also the option of reloading and monetizing these features Over-The-Air (OTA). That's why, in his words, the transformation also includes a cultural change in the company, new personnel skills and the possibility of a technical career up to the highest levels of a company and the associated recognition: "The industry's insistence on existing structures and long decision-making processes has become noticeable led to a dead end. Only through the long-overdue transformation will we be able to maintain or even improve our position in the automotive market in Europe and thus become one of the technology leaders again.”


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