An Autonomous Car Roadmap for Suppliers
March 06, 2017
Autonomous vehicles, with their promising pilot programs and enormous potential, make headlines in business and technology news every day. Self-driving cars and trucks promise to dramatically change the economics of nearly every industry.
However, the path to this driverless future is more complex than a ﬁrst glance might suggest. Fully autonomous cars are likely to remain a small-volume market for some time. In the interim, assistive technologies will play a much larger role in the industry, as drivers come to rely on technology that guides them and supports their driving decisions. Mastering these new technologies will be essential for automakers and suppliers, and doing so will help build the capabilities they will need to deliver reliable, autonomous cars.
The implications for top-tier suppliers are that they will need to play in two closely related but distinct segments:
- Advanced driver assistance systems (ADAS). For at least the next decade, most consumers are more likely to buy vehicles that use technology only to assist drivers—things like automated emergency braking or assistive parking—rather than fully autonomous cars.
- Autonomous driving (AD). Fully autonomous vehicles are likely to remain elusively expensive for most car buyers over the next few years. But they will become increasingly attractive to taxi services and other shared mobility service providers who can justify their expense because it reduces their costs by replacing some drivers.
The business-to-business (B2B) market for assistive and autonomous technologies, promises to be attractive, even in pessimistic scenarios. Bain estimates that the global opportunity will be in the range of $22 to $26 billion annually by 2025, with yearly growth between 12% and 14%. Even in our most optimistic scenario, by 2025 only 10% of ADAS/AD systems will be partly or fully automated, replacing the driver or at least allowing drivers to divert their attention from the driving task under speciﬁc circumstances (conditional automation).
Implications for leading top-tier auto suppliers in the ADAS/AD market
Play in both AD and ADAS segments. Develop a flexible, scenario-based strategy and invest in both ADAS and AD projects.
Monitor the market for signs of strategic surprise and disruption. Focus on new entrants—not just tech players but also low-cost suppliers.
Develop key capabilities. Gain competency in software engineering, especially raw data fusion and machine learning and create a tech culture.
Pursue mergers, acquisitions and partnerships. Improve necessary skills, technologies and talent.
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