New Small Players Threaten the Giants of the Car Industry

New Small Players Threaten the Giants of the Car Industry

Before Henry Ford’s mass production of cars, only the rich were able to afford automobiles. But as soon as the Model T cars were introduced, they were brought closer to the masses. Immediately, cars made a great impact to the transport vehicle market, with horses that were made to pull carriages finally given their well-deserved rest.

These days, the digital tech creates a similar impact, having a major effect on the newspaper, music, and most other media aspects. Having a greater influence is the smartphone, which gives users the chance to use their preferred apps and become e-connected, for instance.

Many people consider the car as the bigger brother mobile version.  “Cars already contain so much more digital content, much of the value of the car and the cost of developing a car is related to the digital technology in some way or another. When it comes to lowering fuel consumption or new safety features it is very much about the digital infrastructure, which requires a totally new skill set for the people developing the car.” said Ola Henfridsson, professor at Warwick Business School.

The modern era, with the many available resources, gives any individual the chance to become the next major car manufacturer, or an innovator in any field for that matter. A good example is Mark Zuckerberg, who has created waves on the Internet via Facebook.

There are pretty strong signs that the next phenomenal car development might happen at a university dorm, instead of a top automaker’s Research and Development department.

And that is what worries the car manufacturers. As they open up their cars to third-party developers, it could lead to them losing control of their own products. An interesting development is the tie-up of Google with GM, Hyundai, Honda, and Audi in the Open Automotive Alliance with the goal to develop an Android app platform on their vehicles.

There were research projects in which Google is a part of, but nothing is definite yet since the company admitted that it will have to venture into the tablet and TV markets before it considers the car industry.

In Sweden, Saab and the Road authorities of the country are working on the development of an app that will tell drivers which roads are slippery and which ones are safe.

This is a good project for the road authorities since they will have to deal with less accidents. On the case of Saab, it is still unsure which part of the project will be profitable for it.

For the longest time, the car industry has been committed to scale. Big is better is what it has always believed. Now, there is the birth of the so-called “DIY developments” in many cars that’s consumer-driven. For instance, an app shop for cars will happen soon, which will help any driver design his own personal app for his vehicle.

Normally, manufacturers need a 6-year cycle in car development before they can recover their investment. This will not be the norm soon. Software shared with the Android community can be used for car development at a low cost.

Currently, most major car makers know the industry are in the midst of continuous innovation. The auto market is caught up in the digital wave. There is a prediction that soon, car brands will be more connected to Google than the traditional automaker.

 

 

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