Consumers increasingly demand improved safety, driver assistance and infotainment features in their new vehicles. On the other hand, bringing connected cars, light trucks and SUVs to market is no small feat for automotive companies. To deliver connected cars, automakers must partner with high-tech consumer electronics companies, and that presents numerous challenges.

 

To design for safety and profitability, automakers must address some key imperatives, write Evan Hirsh, a partner with Strategy& and who leads the firm’s North American automotive practice, Marian H. Mueller, a partner with Strategy&’s automotive practice, and Kumar Krishnamurthy, a partner with Strategy&’s digital business technology practice, in strategy + business.

 

The first of those imperatives is to treat vehicle connectivity as an integral element of the automotive value proposition, Hirsh, Mueller and Krishnamurthy write. To protect and build their brands, automakers must focus on determining which kinds of digitally connected functionality will integrate into their vehicles and how to achieve that integration.

 

For instance, automakers shouldn’t try to fully control the design process for infotainment features because consumer device makers and app developers have the scale, product development speed, technical know-how and innovation ecosystems in place to quickly develop the features, the authors explain. However, vehicle manufacturers must always have the final word on what goes into their vehicles, according to Hirsh, Mueller and Krishnamurthy. That means they must govern and dictate how a driver interacts with the machine, and they should design and own driver-assist and safety features.

 

Next, automakers must follow the dictates of safety in driving for every aspect of the connected vehicle. Although consumers might like the idea of using more entertainment apps in their cars, and some high-tech companies might want to simply plug their infotainment systems into vehicles, vehicle manufacturers cannot compromise on safety, Hirsh, Mueller and Krishnamurthy write. Vehicle makers should therefore prioritize safety in their infotainment investment by creating features that are fun to use without distracting the driver.

 

Automakers must also build the capabilities to ensure cybersecurity to defend connected vehicles against cyberattacks. Unfortunately, vehicle manufacturers are lagging behind in this regard. It is necessary for them to build backups for critical systems, as well as multiple firewalls that separate a car’s subsystems from one another, Hirsh, Mueller and Krishnamurthy write. That way, if one subsystem fails or is hacked, the others will stay functional and protected.

 

Another key imperative is for automakers to revamp the traditional product development cycle. The typical automotive product development cycle is currently three to five years, with a mid-cycle facelift that changes features such as electronics or exterior design elements, Hirsh, Mueller and Krishnamurthy write. Instead, automakers will need to build a more modular electronics system—rather than one that’s vehicle-specific—and virtual updates will be needed to deliver electronics and software content more quickly, along with updated cybersecurity, the authors note.

 

Finally, automakers must adapt the vehicle manufacturing operating model to accommodate connected vehicles, Hirsh, Mueller and Krishnamurthy write. Over the years, automotive manufacturers have developed a complex and highly specialized operating model in which functional silos coordinate with one another. These firms, consequently, will need to integrate connected vehicle activities into their existing structures. They should start by prioritizing connectivity initiatives, building a truly cross-functional connected vehicle team, clearly stating who has governance and decision-making rights, and identifying and establishing the new capabilities that connected vehicles will require, Hirsh, Mueller and Krishnamurthy write. Eventually, connected vehicle activities must be as established and structurally integrated as other groups—such as those that design powertrains—are today, explain the authors.

 

What are your thoughts on the increasing connectedness of cars? Secondly, what do you see as key issues for automakers as they incorporate more consumer electronics in vehicles?