|By PR Newswire||
|January 13, 2014 12:01 AM EST||
DETROIT, Jan. 13, 2014 /PRNewswire/ --The global automobile industry is entering a new golden era of innovation and advancement, and the ability to innovate in four key areas—power train, lightweight materials, connectivity, and active safety and assisted driving—will be a major factor in individual carmakers' success in the years ahead, according to new research by The Boston Consulting Group (BCG).
The research, released today during the press preview of the North American International Auto Show in Detroit, draws on several sources, including the results of a new U.S. consumer survey, an analysis of patent filings, BCG's annual study of the world's most innovative companies, and the firm's experience working with major automotive companies around the world. The findings will be published in a BCG report later this month. Here are a few highlights:
Innovation in the global automotive industry is intensifying.
- Fourteen automakers are among the top 50 most innovative companies in BCG's 2013 survey, compared with 10 carmakers in 2012 and only five in 2005. Three companies (Toyota, Ford, and BMW) rank in the top 10, and nine automakers are in the top 20. For the first time since BCG began conducting this survey nine years ago, there are more auto manufacturers than consumer companies in the top 50 and more carmakers than technology companies in the top 20.
- R&D spending at these 14 original equipment manufacturers (OEMs) increased at an annual rate of 8 percent since 2009, while spending at leading tier-one suppliers rose by 5 percent a year.1
- From 1995 through 2011, the number of patent applications filed by OEMs increased by only 3 percent annually, while the number of filings by tier-one suppliers rose 6 percent a year. A recovery from the 2008 crisis has resulted in the number of applications by tier-one suppliers leaping 37 percent, while the number by OEMs has jumped by 28 percent.
The focus on innovation has been in four areas: power train, lightweight materials, connectivity, and active safety and assisted driving.
- The four areas had patent application growth rates of 6 to 15 percent from 1995 through 2011, compared with an average growth rate for all patent filings by OEMs and tier-one suppliers of only 4 percent.
- Filings in all four areas showed only an 8 percent decline from 2008 through 2009, compared with an average drop in the number of applications of 25 percent.
- Filings increased 10 percent faster than the average growth rate in the bounce-back years from 2010 through 2011.
Consumers value the introduction of new technologies and features.
- New BCG research on U.S. consumers shows that most car buyers want to purchase a car from a company seen as innovative—almost 60 percent say this is a very or somewhat important consideration.
- A key characteristic of an innovative automaker, according to car buyers, is being the first to introduce new technologies.
- U.S. consumers see features related to connectivity, safety, and fuel economy as the most innovative in today's vehicles. Most U.S. consumers rank connectivity and safety features in the top 5 of some 20 new features in vehicles today (see exhibit).
"Innovation in the automotive industry is retaking center stage," said Xavier Mosquet, a BCG senior partner and coauthor of the study. "Consumers want to buy cars from companies that bring new technologies to market, and connectivity, safety, and fuel efficiency are three of their top priorities. The ability to innovate in these areas will be a major factor in individual automakers' success in the coming years."
Regulatory and marketplace demands with respect to fuel efficiency, connectivity, and safety, as well as technological advances that are making new features possible and reducing their cost, are driving the renewed focus on innovation.
Mosquet, who coleads BCG's global Automotive practice, and his coauthors say that OEMs and tier-one suppliers need to address three areas with a sense of urgency:
- The shift from mechanical to software-driven vehicles. Cars are no longer primarily mechanical devices. Rather, automobiles are increasingly becoming software driven (literally, as well as in other ways). Given the rise of electronics and the fact that software features reduce tooling cost, as well as allow for configuration later in the product development cycle, the shift to more software in cars will continue. This shift requires auto executives to think about product life cycles—and the involvement of their companies with them—in new terms.
- The quickening pace of product development. Consumer electronics and technology companies have taught consumers to expect a rapid pace of innovation. This expectation will make it more and more difficult for automakers and their suppliers to adhere to the current three- to five-year product design and development process. Car manufacturers will need to experiment with alternative design processes, new development models, and in the longer term, advanced manufacturing techniques. The ability to discern early what consumers see as the most valuable innovations will also create an advantage.
- The increasingly prominent role of tier-one suppliers in innovation and technological development. The importance of tier-one suppliers in innovation and product development will escalate. These companies are already playing a bigger role in innovation in the areas of power train, interior design, and chassis components—historically the R&D domains of carmakers. In addition, the determinants for differentiation are shifting toward connectivity and active-safety features, in which tier-one suppliers have substantial expertise. Those manufacturers that construct the most effective collaboration models, encouraging and rewarding supplier R&D investment, will build a long-term advantage.
"Other areas of innovation loom large as well, such as alternative fuels and assisted driving," said Massimo Russo, a BCG senior partner and coauthor of the study. "Those automakers that determine how to organize themselves to harness and direct fast-moving developments in power train, lightweight materials, and, most critically, software, electronic components, and connectivity will establish a decided advantage over competitors in the near and longer term."
A copy of the upcoming report, Accelerating Innovation: New Challenges for Automakers, will be available later this month at www.bcgperspectives.com.
For more information on the research or to arrange an interview with one of the authors, please contact Dave Fondiller at +1 212 446 3257 or [email protected].
About The Boston Consulting Group
The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients from the private, public, and not-for-profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 81 offices in 45 countries. For more information, please visit bcg.com.
Bcgperspectives.com features the latest thinking from BCG experts as well as from CEOs, academics, and other leaders. It covers issues at the top of senior management's agenda. It also provides unprecedented access to BCG's extensive archive of thought leadership stretching back 50 years to the days of Bruce Henderson, the firm's founder and one of the architects of modern management consulting. All of our content—including videos, podcasts, commentaries, and reports—can be accessed by PC, mobile, iPad, Facebook, Twitter and LinkedIn.
1 OEMs include Toyota, Ford, BMW, General Motors, Volkswagen, Hyundai, Honda, Audi, Daimler, Kia, Nissan, Tesla, Fiat, and Renault. Tier-one suppliers include Continental, Denso, Bosch, Panasonic, Valeo, TRW, and Hyundai Mobis.
SOURCE The Boston Consulting Group
SYS-CON Events announced today that SoftLayer, an IBM Company, has been named “Gold Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2016, at the Javits Center in New York, New York. SoftLayer, an IBM Company, provides cloud infrastructure as a service from a growing number of data centers and network points of presence around the world. SoftLayer’s customers range from Web startups to global enterprises.
May. 2, 2016 03:30 PM EDT Reads: 1,013
The IoTs will challenge the status quo of how IT and development organizations operate. Or will it? Certainly the fog layer of IoT requires special insights about data ontology, security and transactional integrity. But the developmental challenges are the same: People, Process and Platform. In his session at @ThingsExpo, Craig Sproule, CEO of Metavine, will demonstrate how to move beyond today's coding paradigm and share the must-have mindsets for removing complexity from the development proc...
May. 2, 2016 03:00 PM EDT Reads: 267
SYS-CON Events announced today that Ericsson has been named “Gold Sponsor” of SYS-CON's @ThingsExpo, which will take place on June 7-9, 2016, at the Javits Center in New York, New York. Ericsson is a world leader in the rapidly changing environment of communications technology – providing equipment, software and services to enable transformation through mobility. Some 40 percent of global mobile traffic runs through networks we have supplied. More than 1 billion subscribers around the world re...
May. 2, 2016 02:45 PM EDT Reads: 1,044
You think you know what’s in your data. But do you? Most organizations are now aware of the business intelligence represented by their data. Data science stands to take this to a level you never thought of – literally. The techniques of data science, when used with the capabilities of Big Data technologies, can make connections you had not yet imagined, helping you discover new insights and ask new questions of your data. In his session at @ThingsExpo, Sarbjit Sarkaria, data science team lead ...
May. 2, 2016 02:00 PM EDT Reads: 914
SYS-CON Events announced today that Peak 10, Inc., a national IT infrastructure and cloud services provider, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Peak 10 provides reliable, tailored data center and network services, cloud and managed services. Its solutions are designed to scale and adapt to customers’ changing business needs, enabling them to lower costs, improve performance and focus inter...
May. 2, 2016 12:30 PM EDT Reads: 1,260
You deployed your app with the Bluemix PaaS and it's gaining some serious traction, so it's time to make some tweaks. Did you design your application in a way that it can scale in the cloud? Were you even thinking about the cloud when you built the app? If not, chances are your app is going to break. Check out this webcast to learn various techniques for designing applications that will scale successfully in Bluemix, for the confidence you need to take your apps to the next level and beyond.
May. 2, 2016 12:00 PM EDT Reads: 1,533
There is an ever-growing explosion of new devices that are connected to the Internet using “cloud” solutions. This rapid growth is creating a massive new demand for efficient access to data. And it’s not just about connecting to that data anymore. This new demand is bringing new issues and challenges and it is important for companies to scale for the coming growth. And with that scaling comes the need for greater security, gathering and data analysis, storage, connectivity and, of course, the...
May. 2, 2016 11:45 AM EDT Reads: 923
So, you bought into the current machine learning craze and went on to collect millions/billions of records from this promising new data source. Now, what do you do with them? Too often, the abundance of data quickly turns into an abundance of problems. How do you extract that "magic essence" from your data without falling into the common pitfalls? In her session at @ThingsExpo, Natalia Ponomareva, Software Engineer at Google, will provide tips on how to be successful in large scale machine lear...
May. 2, 2016 11:30 AM EDT Reads: 1,310
Peak 10, Inc., has announced the implementation of IT service management, a business process alignment initiative based on the widely adopted Information Technology Infrastructure Library (ITIL) framework. The implementation of IT service management enhances Peak 10’s current service-minded approach to IT delivery by propelling the company to deliver higher levels of personalized and prompt service. The majority of Peak 10’s operations employees have been trained and certified in the ITIL frame...
May. 2, 2016 11:30 AM EDT Reads: 1,023
SYS-CON Events announced today that Fusion, a leading provider of cloud services, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Fusion, a leading provider of integrated cloud solutions to small, medium and large businesses, is the industry's single source for the cloud. Fusion's advanced, proprietary cloud service platform enables the integration of leading edge solutions in the cloud, including cloud...
May. 2, 2016 10:00 AM EDT Reads: 2,617
In his session at @ThingsExpo, Chris Klein, CEO and Co-founder of Rachio, will discuss next generation communities that are using IoT to create more sustainable, intelligent communities. One example is Sterling Ranch, a 10,000 home development that – with the help of Siemens – will integrate IoT technology into the community to provide residents with energy and water savings as well as intelligent security. Everything from stop lights to sprinkler systems to building infrastructures will run ef...
May. 2, 2016 10:00 AM EDT Reads: 1,015
Digital payments using wearable devices such as smart watches, fitness trackers, and payment wristbands are an increasing area of focus for industry participants, and consumer acceptance from early trials and deployments has encouraged some of the biggest names in technology and banking to continue their push to drive growth in this nascent market. Wearable payment systems may utilize near field communication (NFC), radio frequency identification (RFID), or quick response (QR) codes and barcodes...
May. 2, 2016 09:15 AM EDT Reads: 853
The increasing popularity of the Internet of Things necessitates that our physical and cognitive relationship with wearable technology will change rapidly in the near future. This advent means logging has become a thing of the past. Before, it was on us to track our own data, but now that data is automatically available. What does this mean for mHealth and the "connected" body? In her session at @ThingsExpo, Lisa Calkins, CEO and co-founder of Amadeus Consulting, will discuss the impact of wea...
May. 2, 2016 08:45 AM EDT Reads: 779
Unless you don’t use the internet, don’t live in California, or haven’t been paying attention to the recent news… you should be aware that self-driving cars are on their way to becoming a reality. I have seen them – they are real. If you believe in the future reality of self-driving cars, then continue reading on. If you don’t believe in the future possibilities, then I am not sure what to do to convince you other than discuss the very real changes that will roll out with the consumer producti...
May. 2, 2016 08:45 AM EDT Reads: 657
SYS-CON Events announced today that Enzu, a leading provider of cloud hosting solutions, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Enzu’s mission is to be the leading provider of enterprise cloud solutions worldwide. Enzu enables online businesses to use its IT infrastructure to their competitive advantage. By offering a suite of proven hosting and management services, Enzu wants companies to foc...
May. 2, 2016 08:30 AM EDT Reads: 1,072