Exponential technological growth and transformative change are creating unique opportunities and challenges for the automotive industry. That was a key theme of Foley’s 2018 Auto Show Program, hosted by Foley partners Mark Aiello and Ann Marie Uetz and held on January 17, 2018, alongside the North American International Auto Show in Detroit.
Nearly 150 executives gathered to hear insights from three distinguished panels of speakers on how new technology is impacting the auto industry and best practices for balancing the dual needs of innovation and compliance. Following are the highlights of these discussions.
Impact of New Technology on Manufacturing and Supply Chains
Carla Bailo, President and CEO of the Center for Automotive Research (CAR), and Victor Edozien, President and CEO of SET Enterprises, Inc., kicked off the day with a session on how auto suppliers can stay on top of changes in technology and mobility in a fast-moving market.
Drawing on Technology Roadmaps CAR developed for how technology is likely to change the auto sector through 2030, Bailo stressed that vehicles will soon be in near constant motion. This will mean shorter lifecycles for vehicles and, in turn, a need for cross-industry collaboration to shorten the development process. “The relationships between OEMs and suppliers need to be stronger than ever from the very beginning at the planning stage to make this process much shorter,” said Bailo. She also predicted a need for collaboration as the business model around vehicle sales and the supply chain evolves, as well as a growing focus on personalization as vehicle development increasingly becomes all about the customer experience.
Reflecting on his experience leading a mid-market supplier, Edozien provided tips for suppliers to make necessary investments and drive innovation in the face of disruption and non-traditional entrants. Doing so requires finding white space, instead of running to saturated areas where competitors are already focused, and determining where your company has what Edozien calls “contrarian truths” – unique insights that few others agree with.
“Bet on the inevitability of tomorrow rather than the limitations of today,” Edozien told attendees as he discussed the need to be agile and question existing business models.
Focus on Compliance is Critical
Lois Bingham, Vice President, General Counsel, Secretary and Compliance Officer at Yazaki, set the stage for a lively discussion of how to create a culture of compliance by sharing four key tips:
- Don’t let lady luck fool you: Just because something has always been done a certain way, doesn’t mean it’s the right way or that problems aren’t lurking around the corner.
- Compliance is not going away: Successful companies are those that really invest in compliance and integrate it into all their functions.
- Look beyond QCD: While Quality, Cost and Delivery is undoubtedly important, not putting an equal focus on compliance can send the wrong message within a company that compliance isn’t as much of a priority.
- Recognize that dysfunction is everywhere: The key is to understand that dysfunction and work within the gaps where you can be most effective at ensuring compliance.
Jeffrey Taylor, Deputy General Counsel and Chief Compliance Officer at General Motors, reflected on his 16 years with the Department of Justice (DOJ) and current trends to identify some of the main risks facing automakers and suppliers. This included cybersecurity preparedness and protecting consumer information, policies to protect against harassment in the workplace, and the continued push for greater environmental sustainability.
Looking at DOJ enforcement, Taylor said that the agency is generally reasonable when it comes to compliance programs. With an understanding that every company is different, the DOJ doesn’t expect uniformity, but looks for companies to have a well-thought out approach to compliance that reflects the nature of their business.
The Rise of Autonomous Driving and Connected Mobility
Chris Thibodeau, Senior Vice President and GM – Autonomous Driving at Ushr, started off the final session by examining the autonomous vehicle market’s evolution. Stating that “this is a marathon, not a sprint,” Thibodeau emphasized that level 4 and 5 autonomous vehicles have a longer development cycle and that adequate testing is critical. Given that these vehicles “take control away from the driver and put it on the machine,” there is a higher bar to gain the trust of consumers.
Thibodeau pointed to a Boston Consulting Group report predicting that by 2035, 18 million partially autonomous vehicles and 12 million fully autonomous vehicles will be sold per year globally. Foley’s 2017 Connected Cars & Autonomous Vehicles Survey also looked at the impact of groundbreaking innovation on the auto industry. One key finding was that the business strategies and operations of traditional automakers and suppliers are clearly being influenced by emerging and established technology companies. Only 15 percent of respondents did not believe that technological innovation is disrupting traditional automotive supply chains.
With Ushr’s leading position in developing high-definition mapping technology and software for autonomous vehicles, Thibodeau gave attendees a detailed view into the importance of HD mapping to facilitate a safe autonomous driving experience, as well as the core elements of the map creation process. He noted that to ensure it is done right, HD map development requires a “balance between humans and machines.”
Roger Lanctot, Director of Automotive Connected Mobility at Strategy Analytics, continued the discussion around autonomous vehicles with a focus on infotainment and telematics. Commenting on the many benefits of extracting data from vehicles, Lanctot emphasized that a more robust connection can enhance safety by anticipating failures in the car before they occur, increase security by detecting intrusions, and manage software over the air.
“To build a solution, you need data across brands,” Lanctot said as he discussed the need for data sharing across the industry for autonomous vehicles and associated applications to reach their full potential.
Overall, the three sessions revealed great optimism and opportunities within an evolving industry that still revolves around cars for transportation – no matter what shape or form that car ends up taking. The program ended on a positive note with Lanctot saying that ultimately, autonomous vehicle technology is going to make our roads safer and save lives.
For more information on Foley’s Auto Show Program and the topics covered in this article, please contact program co-chairs Mark Aiello (firstname.lastname@example.org) and Ann Marie Uetz (email@example.com). Presentation materials from the program are available here.