Recent news from research firms as well as automotive companies shows that the companies listen to consumers, and are quickly moving to meet demands for autonomous and connected cars. They do, however, also realize limitations, and are forming partnerships to deliver these new capabilities.

 

KPMG International recently surveyed 800 C-level global auto executives, and 38 percent of them said autonomous vehicles are an “extremely important” trend in the industry. What’s remarkable is that in the firm’s Global Automotive Executive Survey last year, only three percent of the respondents said such vehicles were extremely important. Furthermore, 50 percent of global execs said connected car technology is extremely important, compared with just eight percent of the executives last year. The belief is even stronger among U.S. automotive executives: 46 percent of the U.S. respondents say autonomous vehicles are extremely important and 58 percent of them say connected cars technology is extremely important.

 

“New entrants, from technology giants to startups, are accelerating the pace of innovation, particularly in the area of connected and autonomous cars,” says Gary Silberg, national automotive leader for KPMG in the U.S. “Most of the traditional automotive players have been slow to recognize the power of this trend, but they’re catching on now.”

 

I was also interested to recentlysee another report, which found that automakers are heavily investing in autonomous cars—although it also notes that driverless-car development will ultimately require alliances among automakers and technology companies. The report, by the Intellectual Property and Science division of Thomson Reuters, is based on a detailed analysis of patent filings by automakers and tech companies for autonomous-car technology.

 

“Automakers aren’t as good as technology companies in tooting their own horns,” Tony Trippe, principal author of the report, told Reuters in an interview. “But when you look at the patent data, the automakers are all over this.”

 

The report explains that Toyota is, by far, the global leader in the number of self-driving car patents, with more than 1,400 patents on autonomous-driving devices. That’s more than twice as many patents as any other company, the Reuters article reports. Also leading the way in number of patents are Robert Bosch, Denso, Hyundai and General Motors. Surprisingly, the tech company with the most autonomous-driving patents, Alphabet Inc.’s Google, ranks 26th on the list.

 

It’s important to note, however, that the sheer number of patents doesn’t necessarily equate to leadership in developing self-driving cars, Trippe says in the article. Non-U.S. companies tend to be more aggressive in filing patent applications than American companies. The quality of patents is also important because not all patents have equal importance.

 

The report also notes that it’s crucial for automakers to form agreements with technology companies to develop self-driving cars. For instance, Tesla and Apple would make logical partners because they have complementary, not duplicative patents. Tesla’s strength is propulsion technology, notably batteries, while Apple’s is in electronic navigation and communication systems, Trippe says in the article.

 

Automakers are also forming partnerships with tech firms to develop new capabilities for connected cars. Earlier this week, for instance, Ford announced it’s forming an alliance with Amazon to enable customers to connect their cars into “smart home” networks.

 

The partnership, unveiled at the Consumer Electronics Show in Las Vegas, will enable Ford’s connected car technology hub—known as Sync—to integrate with Amazon’s Echo smart home hub. Ford says some 15 million cars on the road use Sync, and it expects the figure to grow to 43 million by 2020.

 

Partnerships and alliances will help speed development of both self-driving and connected cars since both automotive and technology companies can leverage the capabilities and products of the other company. It will be interesting though to see how such partnerships are formed as well as their impact on the industry and supply chains.