Auto Suppliers Will Have to Adapt or Be Left Behind

According to Industry Week, automotive suppliers need to stay one step ahead of automakers and tech companies or they'll fall behind at a crucial moment in time.

Timothy Healey
    Jun 28, 2017 8:15 AM  PT
Auto Suppliers Will Have to Adapt or Be Left Behind
author: Timothy Healey    

"Adapt or die" is a pretty well-known business saying.

One writer, a journalist for industry news outlet Industry Week, reminds automotive suppliers that they need to be aware of the changes in the ever-shifting automotive industry – lest they be left behind.

Cars And Suppliers Are Heading In Different Directions

Suppliers need to be aware of what direction the industry is heading in. For example, alternative powertrains will become a bigger part of the landscape, but it's not clear yet how much of the market they will make up. It's only a small percentage of overall sales right now, but as cars like the Tesla Model 3 and Chevrolet Bolt come to market, and as battery range gets longer while prices drop, we could be reaching a point where electric cars start selling in much larger numbers.

The impact of ride-sharing programs such as Uber and Lyft may also have unforeseen effects how cars are built going forward, as well, and suppliers need to anticipate how these programs could affect car design and manufacturing, according to Industry Week.

The possible involvement of Apple and Google in the automotive space will also change the game, as will the rise of autonomous vehicles. Already, suppliers are providing lots of the tech used in both the development of autonomous cars as well as the tech that's already used for driver-assistance in current vehicles.

The author posits that suppliers will be well-served by focusing on user experience and user interface. User experience means things like infotainment systems, while user interface could mean things like bumper sensors for parking or cameras.

Some Will Fall Behind, While Others Will Excel

With tech industries being new to the automotive and vice versa, smart suppliers can get ahead by working as go-betweens instead of being passive and reactive to the needs of automakers, the author argues.

He references the partnership between BMW and Intel and Delphi and notes that suppliers that are aggressive are poised to have more success as the market transforms. That's especially true of those that can read the trends best, since the market is moving in unpredictable ways.

The BMW/Intel/Delphi partnership is a good example. Delphi is an automotive supplier that is looking to the future, and its move to split into two companies, with one focusing on self-driving cars and electronics, and the other on powertrains, is an acknowledgement of the way the market is moving, especially in terms of the shift towards autonomous vehicles.

Other suppliers will need to be similarly proactive going forward in order to stay in the fast lane.