Welcome to Supplier Eye, a new monthly column that explores the changes facing our industry and analyze the impact—of new technologies, regulations, business dynamics and consumer desires—on the OEM-Supplier ecosystem. IHS Markit Managing Director Michael Robinet guides readers through the increasingly complex mobility maze with his nearly 30 years’ experience as a top analyst, backed by his company’s industry-leading market intelligence.
When new technologies sweep across an industry, suppliers inevitably face new risks and challenges. And so it is with vehicle electrification, connectivity and automated/autonomous driving systems—three interrelated trends that are already changing vehicle design, engineering and manufacturing.
The steady evolution of cars, trucks, buses and virtually anything with wheels into ‘mobility systems’— ultimately battery powered, their energy replenished with a charging cord and capable of driving, navigating and parking without human input—will continue to force changes throughout the supply chain.
For those enterprises not yet so accustomed, the climbing rate of sophisticated electronic content and the management thereof is adding significant complexity into their world. Advanced driver assistance systems (ADAS) are forcing a re-think of driver and occupant information displays. Will self-driving vehicles need gauge clusters and center stacks, let alone buttons and dials? Why have a cabin heater when temperature-sensing seat fabric is more effective? Much of the interior and its human-machine interface will be transformed.
Powertrains have become ‘propulsion systems’ that require some added degree of electric power or assist in order to comply with stringent emissions rules for the next decade. Even the electrification of suspension dampers is as much for optimizing vehicle aerodynamics (and potentially, energy recuperation) as it is for providing occupant comfort and sharp driving dynamics.
Indeed, virtually every major vehicle system is electronically governed or integrates a form of mechatronics. This is driving many to seek new partnerships or acquisitions in these areas while a larger chunk of the core technology ER&D shifts to the supplier domain, particularly the Tier 1s who are engaging with start-up innovators. While this shift is solidly entrenched, it wasn’t always this way.
Back in the late 1990s, implementation of 42/14-volt electrical systems was slated to spread across the industry. Talk about technology disruption: Wiring, switches, connectors, motors and lighting were all expected to undergo a quantum change to enable the new dual-voltage power net.
Several reasons were behind this impending revolution to unseat the 12-volt incumbent—mainly the lack of alternator efficiency and ever-more voltage-hungry electrical and electronics feature content driven primarily by the German luxury brands.
Designs were set for production, new electrical protocols devised, and tooling was ready. Fortunately, suppliers and OEMs found ways to stretch the proven 12-volt power net without significant cost or disruption. The 42-volt revolt quietly subsided.
Fast forward to 2017. Adoption of 48/12-volt power nets is only a surrogate for the numerous shifts the industry is making with respect to vehicle electrification, software integration, enhanced electronic control and improved communication. Suppliers of all stripes increasingly are being classified as purveyors of ‘hard’ parts versus ‘soft’ parts. As soft parts—electronics, software and electrical components—increase as a share of total vehicle cost, this will place increased pressure on others to examine their own ecosystem for increased exposure to the ‘softer’ side.
As vehicle affordability will continue as a broader issue, suppliers must examine their role. In this era of substantive change, there are knowns and unknowns. Increased electronic content and its profound impact fits squarely in the former.