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Smart mobility as a vision for the German automotive industry
Will SMART MOBILITY work?
Technical innovations in vehicles often come from suppliers. Accordingly, they have to invest a lot and take many risks in product development. To get an inside view, today I am talking to Rosa Meckseper, Managing Director B&R Germany | A Member of the ABB Group, former Head of Business Area Smart Mobility, Continental North America. Previously, she was SVP Corporate Strategy at Continental and VP Marketing and Business Strategy at Bosch Chassis Control Systems.
Steffen Szameitat: Firstly, the opening question: What is your dream car?
Rosa Meckseper: Dream cars are traditionally associated with an Aston Martin DB 5 or Jaguar E Type from the 1960s. Such emotionally charged and beautiful vehicles. However, the current cars with full ADAS equipment are suitable for everyday use and future-orientated. Especially the cars from the West Coast and the German manufacturers. These new technologies are of course totally exciting for me.
Steffen Szameitat: We are currently experiencing a whole series of breakthroughs in hardware, software and sensor technology. On the other hand, we are also experiencing a kind of disillusionment. In 2017 and 2018, there were also calls in Germany for fully automated driving by 2022. That’s when disillusionment set in. Where is the journey going?
Incremental development of software-defined vehicles
Rosa Meckseper: Software-defined vehicles (SDVs) are being developed much more user-centred. This results in new requirements, new user experiences that we develop and that require a change in the EE architecture. And therefore a completely different way of thinking and approach than anything we have seen before in order to map this in the vehicle. These customer-centred visions are broken down into individual applications. The implications for software and hardware requirements are of course enormous.
Steffen Szameitat: What does this mean for the car, what will we see on the road?
Rosa Meckseper: We are already seeing an incremental, evolutionary development. When we will reach level five, i.e. driverless, fully automated driving, both in the city and on the motorway, is the big, much-discussed question. But we are moving forwards bit by bit.
Steffen Szameitat: So we are now taking an incremental approach. Manufacturers are no longer focusing on big leaps; instead, the entire EE architecture, including hardware and sensor technology, must first be rebuilt, brought through the various vehicle classes, into the field, etc.
Rosa Meckseper: Exactly. The sensors and hardware for automated driving and smart vehicles need to be affordable. That’s why an important focus is currently on developing standards, both for hardware and software.
We need reusable, standardised components in order to reduce costs, scale and allow for speed in development, production and later updates. It is not just the platform that is new, i.e. the hardware and software, but also the development method.
In principle, we know from smartphones that we have to think in life cycles and be able to update the software more quickly. However, this is much more complicated in cars. There are additional safety requirements, as the safety of the occupants is at stake. All in real time when you are driving automatically. Other important aspects are cybersecurity and the updates in the life cycle, where the updates naturally take effect immediately or algorithms run and have interactions. Everything must be 100% controlled and secured.
What you will see on the market in the near future will not be the fully automatic car. You have recognised that correctly. But we are seeing evolutionary developments. And what is happening behind the scenes is simply enormous.
This is the transformation we are currently going through. We all need different perspectives, different ways of thinking. We need to be more efficient, more innovative, reduce monolithic systems, make them smaller and more manageable. Modularisation is the whole trend in development in the automotive industry right now.
Industry-wide cooperation is absolutely critical to success
Steffen Szameitat: Is the division of labour between manufacturers and suppliers shifting?
Absolutely. And if you were to ask me what I would write to the CEO or all CEOs in a letter, if I had the opportunity, it would be that collaboration in the industry is the most critical area for achieving this transformation. No single company in the world can do it alone. We need different experts, we need different roles. We need optimism and collaboration to really get the whole software-defined transformation done.
Steffen Szameitat: What could that look like in concrete terms? Will the Germans work together or will the Germans work together with the Chinese or will they all work together?
Rosa Meckseper: Everyone has to decide that for themselves. My experience shows that proximity is important. For example, there is a cluster around Stuttgart within Germany. That’s an advantage if the language and geographical proximity are also given. But at the end of the day, culture and cooperation are not the only key factors; expertise remains the driving force. And it can be Japanese together with Germans. It can be Japanese, i.e. OEMs or suppliers, or new players together with Americans. And we see numerous partnerships in all specialised aspects, but also in larger areas.
Steffen Szameitat: Among other things, you are responsible for the aftermarket area for Continental North America. This means that you also look in particular at the supply of fleets with spare parts, spare parts components, etc. Now software and sensor technology are making cars more complex. What do we need to be prepared for, both on the customer side and on the dealer side?
The brake on growth in the aftermarket: qualified mechanics
Rosa Meckseper: Like every technological development, it is first offered in the OEM’s own workshops, the more complicated repairs or the new repairs, and then after 3 to 5 years, depending on penetration, it comes into the independent aftermarket. And that is the area in which we are primarily growing. We also support the OEMs in our own aftermarket with products. The challenge will be to find qualified mechanics and master mechanics. No matter who you ask in the industry, in the aftermarket, it’s been the main driver worldwide for a while now that we can’t get enough people in the workshops. And when we do have them, it is of course a matter of training them step by step: for example, in sensor technology, i.e. the calibration of a replaced camera or a new radar, for example.
Steffen Szameitat: Is this a strategic area for you or do you have any suggestions for eliminating the shortage of qualified car mechanics?
Rosa Meckseper: That’s a good question. We mainly supply the parts to the workshops. We have comparatively few workshop chains of our own. We have our own workshops in Europe with Best Drive and Vergölst. We feel something there, but it is not our primary focus. We are already taking on some of the work via Remote Vehicle Diagnostic. Replacing a part like this on site requires employees in the workshop.
Steffen Szameitat: When will the new software-defined vehicles arrive in the independent aftermarket?
Rosa Meckseper: They can already be serviced in the independent aftermarket. Because it is the driver’s decision which garage they go to. The only question then is whether the workshop is qualified and can accept the car. They often don’t have the confidence to do that.
Steffen Szameitat: Will this bottleneck become even more pronounced in 10 years’ time because the penetration of new technologies in the vehicle fleet will be higher?
Rosa Meckseper: The bottleneck is the headcount in the workshops. And that is already the case today. It has nothing to do with vehicle technology. There is a shortage of employees even today. It has to be solved one way or another.
A pragmatic path to smart mobility
Steffen Szameitat: Keyword smart mobility: how will this develop in 10 years’ time?
Rosa Meckseper: Smart Mobility is a business area for us, consisting of the aftermarket, commercial vehicle business and telematics and services.
Smart is aftermarket because it is sustainable to repair a vehicle instead of buying a new one. Smart is the logistics sector, where we are working with our partner Aurora on fully automated commercial vehicles. And smart is, and this is the broader understanding, a vehicle or a range that can think for itself, which relieves the driver of repetitive tasks. Which increases safety. Which supports sustainability, i.e. efficiency.
For example, we are developing telematics solutions for school buses with Sona Telematics, a subsidiary based in Seattle. The solution allows parents to know exactly where their child has boarded the vehicle and where they are at any given time. And also when they have safely got off, at school or at home.
In all aspects, telematics solutions support what we understand by smart mobility.
Steffen Szameitat: That sounds pragmatic: “Let’s walk before we run.” Taking individual steps that can be implemented with technology, sensors and software.
Rosa Meckseper: We take a very, very close look at the use cases before we decide what to do with whom.
But I can understand the disillusionment. I feel the same way. I was also involved in the strategy rounds about 10 years ago. And I still remember the great scenarios we painted: Evolutionary and revolutionary at the same time.
In fact, nothing came of it. Certainly for cost reasons on the one hand: You can’t finance everything for the same return. But also because of the sheer complexity.
And it is not possible without partnerships. And partnerships don’t just have synergies on the skills side. There are also risks on the cultural and collaborative side. You can’t determine and influence all the strategies of all the partnership participants. This also makes the whole thing more complex and difficult at all levels.
That’s why everyone in the industry today is looking at innovations on a case-by-case basis and considering: Do I play in all areas or only in selective ones? And if so, which ones?
Steffen Szameitat: We see special innovation cycles in the automotive industry. The analogy with smartphones and computer technology is deceptive, where software development cycles are much faster and the increase in capacity is exponential according to Moore’s Law. But after so much has been invested, we have learned that the assumption that the more we move towards computers in our cars, the faster they become, is not always true.
Rosa Meckseper: Yes, a vehicle has completely different requirements than a smartphone in terms of real-time, safety, cybersecurity and, of course, costs. This creates a new dimension of complexity. The smartphone is a good analogy and you can learn a lot from it and it is an inspiration. But it’s not the same thing.
Incremental innovation, case-by-case decisions and partnerships are an approach that allows us to make better progress.
Steffen Szameitat: Great summary. Thank you, Rosa, for the interview.
