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Increasing Cooperation |
NEWS |
Arch rivals Daimler and BMW have announced that they will cooperate on the development of an open platform for highly automated driving, pooling their resources and experience with the ultimate aim of deploying SAE Level 3 and Level 4 vehicles in the early 2020s. This follows an earlier announcement that the companies would pool their sporadic mobility subdivisions into a more focused US$1 billion smart mobility initiative called “Jurbey.”
The announcement is further evidence of an industry that is rationalizing its investments in the face of challenging market conditions today, and a distant expectation for the maturity of new technologies. What remains to be seen, however, is how well two pioneers of autonomous driving will be able to integrate their existing engineering efforts to solve the remaining issues and accelerate their time to market.
Automotive in 2019: Close Ranks and Cut Costs |
IMPACT |
As the decade draws to a close, the automotive industry is facing a perfect storm of spiraling costs and growing competition. As discussed in a recent ABI Research Executive Foresight, there is growing fatigue in the automotive industry over the magnitude of investment into technology trends that will take time to mature and generate any significant return. This has led OEMs that have made little traction in autonomous driving to throw their weight behind OEMs that have already committed time and resources to solving the automation problem. Examples include Honda’s investment in GM’s Cruise and FCA joining the BMW-Intel-Mobileye alliance.
The over-investment problem applies not only to automation, but also to more relatively mature market trends, such as connected infotainment, with most OEM connected car divisions still generating a loss even as market penetration ramps up. The need to suddenly pivot from diesel to electric powertrains exacerbates the problem for European OEMs in particular.
Even while OEMs and Tier 1s (such as Magna) consider ways to cut back on investment expenditure, they are coming under increasing competitive pressure from Google. As many expected, Google’s relationship with Renault Nissan has quickly developed from connected infotainment to driverless vehicles development, and there is now a bottom-up pressure, as was the case with smartphone integration protocols, for other brands to either partner with Google directly or somehow offer a competitive alternative to their autonomous and infotainment capabilities.
The German automotive industry has always demonstrated an ability to close ranks for mutual advantage. Indeed, the origins of this pushback against Google can be traced back to the consortium’s acquisition of HERE to secure the mapping and location expertise necessary for autonomous driving.
Modularity is Key |
RECOMMENDATIONS |
While many in the industry will welcome the growing recognition that the autonomous driving problem is not one that needs to be solved many times over, questions remain as to what cooperation between two leaders in autonomous driving development will look like. As mentioned above, all previous engagements between OEMs in the field of autonomous driving have involved a smaller player (FCA/Honda) lending resource support to a larger player (BMW/GM). This latest venture will require two OEMs with advanced AV development programs to harmonize their efforts in a way that has not yet been attempted.
Indeed, the approaches preferred by BMW and Daimler have differed significantly to date. BMW has taken the approach of co-developing an open Level 4 autonomous platform with Mobileye and Intel, scheduling deployment for 2021 with the intention of licensing the platform to other automakers. Meanwhile, Daimler has carried out the majority of its AV development in cooperation with Tier 1 supplier Bosch, opting for NVIDIA’s platform to fulfill the ultimate robo-taxi vision. The two trajectories diverge radically. Both OEMs maintain that standing engagements will persist, with the cooperative effort focusing on more short term assisted driving features. However, in order to maximize the efficiencies of their newfound collaboration, the two manufacturers will eventually need to settle on either the Mobileye or the NVIDIA approach.
In the face of long-awaited consolidation/rationalization, automotive suppliers must remain flexible and anticipate that the needs of their current OEM customers will change as they increasingly collaborate with competitors to pool know-how and resources. Adopting a modular approach will be particularly important for autonomous software developers, in order to ensure that they can always be in a position to support the patchwork collaboration of multiple OEMs with the missing pieces of the puzzle.