Winter 2017-2018 Management · Digitalization · Strategy · Systems · Global Hau Thai-Tang Top Ford executive sees changing automaker-supplier relationship in new-tech era Start-up scene Ontario Young high-tech companies strengthen region's role in global automotive industry Blockchain Auto industry expects digital ledger to offer great potential for cost savings, data security Interview: Ola Kaellenius Daimler R&D boss values global network of competence centers INSIDE: DAIMLER SPECIAL IT and the changing face of automotive R&D (p. 19-26)
Transcript
Winter 2017-2018
Management · Digitalization · Strategy · Systems · Global
Hau Thai-TangTop Ford executive seeschanging automaker-supplier relationship in new-tech era
Start-up scene Ontario Young high-tech companiesstrengthen region's role in global automotive industry
BlockchainAuto industry expects digital ledger to offer great potential for cost savings, data security
Interview: Ola Kaellenius Daimler R&D boss values global network of competence centers
INSIDE:DAIMLER SPECIALIT and the changing face of automotive
R&D (p. 19-26)
Winter 2017-20182
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In 2018, information technology will even more strongly deter-mine the direction of the global automotive industry. Wheth-er it's new business areas for traditional car brands, making powertrains more environmentally friendly, or getting cars to drive without drivers at the wheel, the key enablers will have to be hardware and software.
There has been major progress on all these fronts in 2017 and this will continue in the new year. Advanced robotics will make car production smarter. Artificial intelligence and ma-chine learning will increase the likelihood that autonomous vehicles will one day help realize near-accident-free personal mobility. As ever-greater computing power becomes available, connected functionality in the car will become more usable and useful. And the new business models for transportation now under development will, with the help of seamless con-nectivity, make it easier for people to get from A to B in a prac-tical, comfortable and sustainable manner.
Are we actually going to see any tangible results from these developments in 2018 already? Probably not. But there will be continued progress. There will surely be more electric cars on the road and driver assistance will continue to improve on the
way to fully autonomous vehicles. Moreover, more powerful computers and software will increase manufacturing and sup-ply chain efficiency. And cooperation between automakers, IT service providers, regulators and city and regional authorities will undoubtedly move to the next level, as they jointly look for new mobility solutions.
In our outlook for the year 2018, which starts on page 55, we talk about artificial intelligence, blockchain, augmented reality, micro-services platforms and quantum computing as some of the key trends now embraced by automakers. All these tech-nologies come from the IT sector and all are finding strong use cases in the auto industry. It's further proof that these two worlds are now settling into a very productive phase of coop-eration.
The automotiveIT International team wishes you a happy and relaxing holiday season and a very good start to the new year!
Virtual reality. Automotive companies are beginning to deploy virtual and augmented reality in their factories and IT and production executives see major benefits. But the technology needs further refinement as users complain about heavy headsets, modest image quality and workers' unfamiliarity with the systems. Automakers BMW and Audi and VW's truck brand MAN are hard at work to make the systems fit to be used in a wide range of processes.
Ford's supply base. Top executive Hau Thai-Tang says the carmaker is adopting a new way to deal with its suppliers as focus increasingly shifts to software.
Artificial intelligence. Automakers agree that ma-chine learning will be essential in getting autonomous cars to behave properly in complex traffic situations.
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Winter 2017-2018 5
TABLE OF CONTENTS
New technology. Survey finds growing focus on next-generation connected-car technologies.
Global R&D. A worldwide network of competence centers helps Daimler meet local requirements.
Agile workplace. automotiveIT visits two carmakers that have already built new work environments.
CES & Detroit Auto Show. Preview: Two big trade shows will set the automotive agenda for 2018.
IT Trends 2018. AI, blockchain and quantum computing are set for growth in coming year.
Blockchain. Auto industry expects digital ledger to lower transaction costs and boost security.
Shifting boundaries. Daimler's IT department is providing support for digitalization programs.
Porsche. Digitalization chief moves sports car brand into a world beyond just the car.
LA Auto Show. Lines blur between automotive and IT as both industries pursue new mobility.
Germany’s top 25. IT service providers to the auto industry post strong business growth.
Ola Kaellenius. R&D boss looks for software talent across global network of development centers.
Ontario. The Canadian province strives to be a center for high-tech automotive development.
Ian Robertson. Retiring BMW sales boss sees role for car show-rooms in "multi-channel world."
Hyperloop. An exciting new mode of transportation faces a wide range of obstacles.
VW electrifies. German carmaker embarks on major electric-vehicle push as industry trend accelerates.
24 Management · Top 25 der IT-Dienstleister
automotiveIT 08/09 · 2017
_Unter Vorbehalt. Die 25 größten IT-Dienstleister in der Autoindustrie überraschen mit guten Zahlen und noch besseren Prognosen. Doch die Zukunft der Branche ist ungewiss und die Stimmung könnte jederzeit umschlagen.
T-Systems
18
IBM
13
DXC Technology
10
Computacenter
9
Accenture
6
Sonstige
44
In Prozent
Marktanteile der Top Five: Die fünf größten Anbieter können Boden gutmachen.
Qu
elle
: au
tom
oti
veIT
In Prozent
Umfrage: Welches Thema sollte bei den OEMs in den kommenden Jahren ganz oben auf der Agenda stehen?
Künstliche Intelligenz und Big Data
17
Vernetzte Mobilität und neue Services
63
Vernetzung von Produktion und Logistik
12
IT-Security
8
T-SystemsIBM
DXC TechnologyComputacenter
AccentureMHP
NTT DataInfosys
Atos Information TechnologyCapgemini
All for One Steeb
ESG Elektroniksystem und LogistikSulzer
AltranH&D International Group
CGIAbat
BT Germany
MVI Solve-IT
BearingPoint
Cenit
operational services
Allgeier
ckc
msg systems
8
28
44
55
12
30
4946
15
38
50 52
Daimler Special (p. 19-26)
20 22 24
Winter 2017-20186
DECISION MAKERS
automotiveIT: Please describe how Ford’s purchasing role is changing.Hau Thai-Tang: The supplier playing field has been leveled af-ter the crisis of 2008. There’s no longer a master-servant rela-tionship beween automakers and suppliers; there’s much more of a collaborative partnership now. We are forced to step back and think through how we can differentiate the Ford brand in an environment that is increasingly becoming more con-nected, more autonomous and more electrified. That drives
what we do our selves and the things we decide to outsource to partners.
And how is the relationship with suppliers today?We’re adopting a whole new way of dealing with the supply base. The shift from hardware to software is changing the cost structure. It’s no longer about capital equipment and as-set intensity, but much more about people and resources and recouping initial investments. Suppliers are changing much
This past June, Hau Thai-Tang, Ford Motor’s head of global purchasing, was given a second job as
executive vice president of product development. Thai-Tang, who joined the carmarker as a trainee in
1993, sees the combined responsibilities as an opportunity to get more out of the relationship between
Ford and a rapidly changing supply base. “We have to collaborate with our suppliers much earlier,” he
said in a telephone interview with automotiveIT. Thai-Tang, 51, also discussed Ford’s software-focused
strategic goals, the reasoning behind some of its recent investment decisions, and the implications of
the industry’s move to electric mobility.
“The shift from hardware to soft-ware is changing the cost structure”
An interview with Ford Executive Vice President Hau Thai-Tang
Interview
Winter 2017-2018 7
DECISION MAKERS
faster. With traditional hardware, we assume 10 year amor-tization and depreciation of physical assets. In the software space, assets may be out of date after a mere 10 months.
How do you decide which components and systems you buy, where you want to take equity stakes in specialist companies and whether you need to own a particular technology?We look at whether a technology is key to differentiating the brand, whether we expect there to be an imbalance between supply and demand and whether our product portfolio will have sufficient scale to justify the capital investment. And we ask the question: what value does it bring to the company?
With Ford's investment in Velodyne, you've clearly iden-tified lidar as a technology you want to own.We see lidar as a critical enabling technology for level 4 (auton-omous) driving and above. Lidar is an integral part of how we are developing our virtual driving system, so we felt we need-ed a very strong and close partnership with lidar companies. That’s why we took an ownership stake in lidar specialist Velo-dyne. And why our Argo AI subsidiary recently acquired (lidar sensor maker) Princeton Lightwave. If we we want access to that technology or have preferential treatment, it’s helpful to have an equity stake.
Batteries will also be key as the industry moves to elec-tric propulsion. Do you expect Ford to get into battery cells too?Battery cell production is very asset-intensive. Look at Tes-la’s Gigafactory, which will cost billions of dollars. It also requires quite a bit of scale to justify such an investment. At the moment, the Ford product portfolio doesn’t have enough volume to justify that level of investment. That’s why it would be better to buy battery cells from the supply base, which can leverage demand across various automakers and even across industries. For us, that’s a much more efficient and better use of capital. We’re also not sure whether battery chemistry will change. So today we cannot justify the investment. That may change over time.
How – and how fast – are electric vehicles changing the industry?Electric motors simplify things with much fewer moving parts than a combustion engine. Electric vehicles have really re-duced or even eliminated barriers to entry into the automotive space. The internal combustion engine has served as a barri-er to entry for 100 years, but now we don’t just find compa-nies such as Tesla, Apple and Google coming in, but also the likes of Dyson, which makes vacuum cleaners and hair dryers, and several Chinese start-ups. All can become automakers. But even if there will be a tipping point for electric vehicles around 2025, a big chunk of new products will be hybrids. The transition period will be a couple of decades, which means we will still have to master both electric-motor and combus-tion-engine technologies. But electric mobility will have a lot of repercussions all the way through the value chain. Fewer moving parts means less service revenue. It will affect the af-
termarket and dealerships, where a big part of the profits come from service. There will be no more oil changes and a lot of the traditional maintenance will go away.
Ford has embarked on a course to become a mobility and software company. How are things going with this massive culture change?We’re a public company but the family’s name is on the build-ing and Bill Ford is executive chairman. The perspective of the Ford family is very much long term. We realize the shift in the value chain is happening right before our eyes. Once the car becomes part of the internet of things, you’re no longer just selling a physical product. You have data and services you can provide and that’s where you’ll be able to capture value. Micro-soft CEO Satya Nadella told us that Google makes more money per PC than Microsoft does. Microsoft was slow to reocgnize the shift in value creation and that’s a lesson for Ford. We're going to make sure we still deliver great products, but we real-ize that the value creation will move beyond the physical hard-ware. That’s the future we’re trying to prepare for.
As of June 1 you head both purchasing and product development. Is that a good combination?I spent 25 years in product development before moving to pur-chasing these past four years. The biggest thing I learned in the past four years was that, if we want to deliver innovative solutions and bring new technology to market, we have to start collaborating with our suppliers much earlier. The tradi-tional product-development model, where you engineer a part and let purchasing request quotes, does work, but there’s a lot more that can be done to make designs more efficient. If the supply chain comes up with a great idea, it's typically too late to incorporate it. The shift we’re making is to let suppliers bet-ter use the parts and investments they’ve already made. That approach creates greater value and improves quality. There’s a huge opportunity for us to work together more efficiently with product development, purchasing and the supply base.
Like many executives in the auto industry, you have a mechanical engineering degree. Does that mean you’ve had to learn a whole lot of new skills as the automotive focus is moving more toward digital technologies?Evolving and learning is a lifelong process that doesn’t end when you get out of school. Having a good grounding in me-chanical engineering is a good solid technology foundation to build on.
And how do you divide your time between product devel-opment and purchasing?I spend most of my time managing the progression of the 60 or so product programs that are somewhere between engineer-ing, launch and mass production. That includes making sure we have the right supplier partners, are sourcing business to the right people and are delivering best value. I probably spend about 65 percent of my time on product-related measures and about 35 percent on the procurement side of the business.
Interview: Arjen Bongard
Winter 2017-20188
CAR IT
Pressure to innovateRankings show growing role for China
The auto industry is navigating choppy seas these days. Volkswagen Group’s diesel scandal, antitrust investigations at German car companies, the high cost of digitization, the electrification of the car, autonomous driving, new business models, etc. These are just a few of the challenges faced by global automakers today. Especially in Germany, VW’s admission of cheating on diesel emission tests has led to an erosion of trust in the auto industry as a whole. And it couldn’t have come at a worse time. After all, carmak-ers are engaged in a veritable paradigm shift from sheet metal to mobility. And, as they make the transition, they are encountering increased competition from non-automo-tive players.
Against this backdrop, it is good news for the industry that in-novation, as measured by the Connected Car Innovation Index (CCI), is alive and well. The index, calculated this year for the third time by Germany’s Center of Automotive Management (CAM) in cooperation with automotiveIT, compares the per-formance and innovative capacity of 19 automotive manufac-turers and the most important automotive nations based on a wide variety of core indicators. One trend already became clear last year: the number of connected-car innovations is steadily growing with the advance of the digital transforma-tion. While the share of such innovations was still at 33 per-cent in 2006, one out of every two are now networking solu-tions. This year the total even climbed to a new record: 621
VW's I.D. Crozz is a fully connected show car that feeds the
driver with all the information he needs while on the road.
Innovationindex
Illus
trat
ion:
VW
Winter 2017-2018 9
CAR IT
connected car innovations could be identified from the fields of telematics, safety systems and controls and display concepts within the 2016 survey timeframe.
The Audi factor
In 2016, both the overall number of innovations and the new connected-car products and services – adjusted for slight changes in methods – were higher than the totals for the pre-vious year. “An end to the enormous innovation dynamic in the connected-car area is not in sight,” the study’s manager, Stefan Bratzel of CAM, said. “Networking and digitalization remain central paradigms in manufacturers’ research and de-velopment.” Once again, the undisputed number one for inno-vations in vehicle technology is the Volkswagen Group. But as in previous years, its success depended heavily on its Audi pre-mium-car subsidiary, which scored 85 out of the VW Group’s 134 index points by itself. If the VW brand had competed in the ranking on its own, it would only have landed in midfield with 30 points. There are questions over whether Audi can continue its innovation course. “The VW Group has been badly battered lately, and now Audi has to meet ambitious cost-cutting goals in coming years,” Bratzel said. “It will be interesting to see whether the group will maintain its position.”
Mercedes-Benz scored the highest in the individual-brand ranking, giving Daimler a leap forward as well. It pulled past electric car pioneer Tesla to the second spot. Daimler owes its improvement over the previous year to the new innova-tion-packed E-Class. Tesla, the big surprise in 2016, was able to maintain its position ahead of BMW thanks to new tech-nology features in autonomous driving, parking and other areas. In general, the electric-car specialist seems to have es-tablished itself as one of the industry’s top innovators. Tesla exhibited the greatest innovation intensity of all 19 automak-ers for the third year in a row. The established players would be wise to take this as more than a hint. That would seem to apply to BMW. It slipped from the top three this year. The Mu-nich-based automaker was revealed to be a bit weak in “world-firsts.” Among other things, the market introduction of the new 5 Series might be to blame. It came along at the start of 2017 and thus was too late to be considered in the ranking. But the automaker should not be written off in the competition for the top spot: “BMW is a pioneer of connected-car technologies, which they have strongly advanced over the past 20 years,” said CCI juror and automotive analyst Hans-Georg Frischkorn. “Perhaps we are seeing a strategic shift in emphasis at BMW, perhaps towards mobility services. It is doubtful whether the same thing applies to other mid-range and low performers in the field.” The trend at the two giants General Motors and Toy-ota is especially dramatic. Between 2005 and 2009, they could still compete on a par with Germany’s manufacturers. In 2016, however, GM only managed a 5th place – up one spot from last year, while Toyota was 14th on the list, down from 10. And the number and quality of innovations at both companies was sharply below those of the two leaders, VW Group and Daim-ler, according to the CCI jury.
Vehicle-technology innovations
Innovation strength (Number and quallity of innovations)
0 20 40 60 80 100 120 140
Aut
om
aker
gro
ups
VW
Honda
Tesla
Toyota
BMW
Renault
Daimler
Mazda
Tata*
Nissan
PSA
Subaru
GM
Geely
Mitsubishi
Hyundai
Fiat Chrysler
Ford
Suzuki
No. of innovations (index points)
■ 2016 ■ 2015
BMW, No. 4 in the innovation rankings, aims to seamlessly
integrate the car into customers’ digital world. (Photo: BMW)
The Sedric. CEO Matthias Mueller shows what a fully autono-
mous Volkswagen vehicle could look lilke. (Photo: VW)
Winter 2017-201810
Mobility services are increasingly seizing the attention of the automotive companies. The CAM team examined them even more comprehensively than it did last year. The num-ber in the study has quadrupled to more than 400 – including products and services from new mobility players like Uber and Apple. Mobility services are also occupying an even larger share of the evaluation. It is clear that anyone wish-ing to make a change from manufacturer to mobility services provider must address these issues. “Manufacturers should focus on expanding their portfolio of services instead of of-fering their umpteenth vehicle variation,” Bratzel said. “The players pursuing the old business model will be severely at risk in the future.”
Mobility services
German auto companies in particular seem to have taken this to heart. With the widest ranging lineup of mobility services so far, Daimler, BMW and the VW Group can stand up to the new mobility players in the CCI ranking. In particular, the car-shar-ing services of Daimler and BMW, Car2go and DriveNow are making a substantial contribution to success in this category. “Mobility services are driven by the premium segment in the first place,” Frischkorn said. “In 2025, the premium standard will mainly be defined by the way a company is positioned for these new business models. This is also a great opportunity for the digital players.” These companies seem to have jumped at the chance, as can be seen in the ride brokering’s strength in the services field. Uber dominates this scene, followed by Chi-na’s Didi Chuxing. An established automaker, Daimler (My-Taxi, Blacklane), first shows up as number three on the list. CAM’s Bratzel said the German strategy to attack the chang-ing car market is expensive. “They are betting on success in the old vehicle world as well as on new services,” Bratzel said. “How long are they going to be able to afford that?”
A country-by-country comparison
The CCI index also looked at the relative performance of au-tomotive countries and here the survey showed that Germa-ny and China are catching up with the US in an overall com-parison of connected-car competitiveness. The US, with its strong ecosystem of carmakers, big-data players and digital technology companies, has for years dominated this part of the survey. But the 2016 data show that the country’s lead is shrinking, as US car companies’ innovation strength slips in relative terms.
The jurors noted that Germany’s rise primarily reflects the high R&D spending of the country’s automotive companies, which aren’t helped by a perceived weakness in Germany’s digital industry. That, in turn, could imply that, in coming years, China will take over the lead in the country standings.
By Yannick Polchow
0 10 20 30 40 50 60 70 80 90 100
Country index
Innovation strength of global car manufacturers
Germany 9695
4761
3265
1319
109
89
816
Japan
USA
France
India
South Korea
Italy
China
816
(In percent)
■ 2016 ■ 2015
0 10 20 30 40 50 60 70 80 90 100
Connected-car country strength (Index value)
China 9694
USA 6468
Japan 4344
South Korea
3723
Germany
3682
Italy
3333
France 3230
30
India
31
35
Market size and digital strength per country (In percent)
■ 2016 ■ 2015
Methodology
The Connected Car Innovation Index (CCI) measures the performance and innovative strength of automotive manufacturers and countries in the connected-car area. The focus is on types of technical innovation relating to a vehicle’s networking with its environment or occupants. Service innovations and market strength flow into this empirical comparison, along with automakers’ qualita-tively evaluated technical innovations. The strengths of the key automotive countries (Country Index) in the con-nected-car field are analyzed and gathered in terms of three groups of factors: the countries' highest performing and most highly innovative global carmakers, the size of the market and digital strength, plus the importance of the big-data players in the consumer electronics, inter-net and mobile wireless industries within these countries. The quantitative data have been indexed, aggregated and weighted to provide a picture of the countries’ con-nected-car strengths comparable numerically.
CAR IT
Winter 2017-2018 11
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Winter 2017-201812
Pho
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Ill
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ogel
With the versatility of a Swiss Army knife, blockchain is rapidly attracting interest across the automotive indus-try. The technology may not be ready for a major role in business processes just yet, but its time is coming rapidly.
Bruce Pon, the CEO of BigchainDB, is optimistic. “The internet has reduced the costs of transferring information by a factor of 1,000, blockchain will cut transaction costs by a factor of 1,000,” predicts the CEO of the Berlin-based operator of a scal-able database that can provide an easy entry into the block-
BlockchainDigital ledger technology set to grow in auto industry
Security & efficiency
ENTERPRISE SYSTEMS & SOFTWARE
Winter 2017-2018 13
chain world. Blockchain, which was originally developed as an accounting system for the online currency bitcoin, is a technol-ogy that could become an extremely powerful force in stream-lining data and business processes. It employs a decentralized ledger that allows digital information to be distributed across a multitude of computers. It lets users of digital currency keep track of their transactions without central accounting. And be-cause data is distributed widely across many computers, it is held more safely and is less subject to fraud.
New initiatives
The auto industry has recognized the potential, but, when it comes to implementation, it’s early days. Still, several auto-makers and suppliers are beginning to use blockchain:
· Daimler has started to deploy blockchain in some finan-cial transactions. Together with Germany’s Landesbank Baden-Wuerttemberg (LBBW) the premium car group used blockchain to arrange a 100m euro loan. Blockchain digi-tally took care of origination, distribution, allocation and execution of the loan agreement as well as the confirmation of repayment and of interest payments. Daimler’s finance chief, Bodo Uebber, said the project was the “first step in testing the wide variety of possibilities for using blockchain technology and assessing this technology’s potential for fu-ture transactions and financial processes.” Kurt Schaefer, vice-president at Daimler’s treasury, said he saw wider po-tential as well. “Other possible applications of blockchain technology in the financial sector include payment trans-actions, the securities trade, and the cross-border shipment of goods,” he said.
· In July, Renault announced a prototype for a digital car maintenance book it developed together with Microsoft and digital service company Viseo. The project used block-chain technology to make sure that data in the document are transparent and stored securely. “This digital car main-tenance book will enable us to provide our customers with new services in an ecosystem alongside insurers and deal-ers,” said Elie Elbaz, Renault’s digital & connected vehicles director. “Blockchain technology is able to create a reliable trust protocol.”
· Toyota said in May it was working with partners exploring how blockchain and distributed ledger technology could help accelerate development of autonomous driving tech-nology. The Japanese carmaker said its advanced research arm, the Toyota Research Institute (TRI), believed block-chain may bolster trust among its users by creating greater transparency. TRI also said blockchain could reduce fraud risk and reduce or eliminate transaction costs.
· Together with partners, supplier ZF Friedrichshafen has developed a so-called Car eWallet, which uses block-chain technology provided by IBM. The digital assistant allows secure payments, even while a car is in motion. It
also can perform other tasks in the vehicle, such as opening the trunk or doors. Blockchain makes it possible to secure-ly synchronize the information of each participant in the network and ZF believes the open automotive transaction platform could radically change e-commerce between au-tomakers, suppliers, service providers and customers.
· Automotive supplier Robert Bosch has expressed strong support for the technology and is looking into at least one application that could be ready for the market in a few years. “For us, blockchain and its related technologies are strategically very important,” Bosch CEO Volkmar Denner said in September.
· And Audi indicated recently that it is testing whether block-chain could be used across its operations. One possible ap-plication would be its use in documenting international logistics processes. In this case, shipping documents would be replaced by blockchain entries that represent individual deliveries or components with the help of so-called digital twins. Adoption of blockchain would enhance transparency.
More efficient
Auto industry insiders said they are keen to adopt the new technology, in particular because of the added data security it provides. But that sentiment contrasts with a poll published in September during the Frankfurt Auto Show by Germany’s high-tech association Bitkom. The survey showed that a mere one-third of automakers and suppliers had heard of block-
Source: Bosch
Bosch CEO Volkmar Denner says blockchain is "strategically
very important" for the supplier group. (Photo: Bosch)
ENTERPRISE SYSTEMS & SOFTWARE
Winter 2017-201814
chain as a technology to be used in company processes. Bitkom asked 177 management board member of companies with at least 20 employees. But BigchainDB chief Pon sees big oppor-tunities for automotive companies. “The current IT landscape in the auto industry doesn’t work 100 percent at the moment,” he said. Particular areas for improvement are ERP and MES systems that produce car data and control manufacturing processes. That’s because these systems have to communicate with numerous other systems that all rely on data. “This com-plexity makes business processes less agile and leads to a par-tial loss of information or to contradictory information, when data come from different sources,” Pon said. His vision: Block-chain provides a reliable source of data that can, ideally, make parts of companies’ middleware superflous. That, in turn, can help simply the IT landscape.
Autonomous vehicle testing
Blockchain may also help solve one of the major R&D challeng-es the auto industry faces when it wants to test autonomous vehicles. Today, it is virtually impossible to devise a cost-ef-fective way to absolve the tests necessary to get regulatory ap-proval for a driverless car or the assistance systems for such vehicles. The reason: Because highway accidents statistically only occur every 5 million kilometers driven, an autonomous vehicle would have to be tested over 50 million kilometers to get a reliable test result. That would cost about 50 million eu-ros. Moreover, every time a carmaker modifies a car, new tests would be necessary. The Toyota Research Institute earlier this year addressed this problem, together with the MIT Media Lab. One of the ideas that came out of this cooperation was to have companies and individuals share driving information securely with the help of blockchain. A market for this data would be created where the information would be available to interested parties. All this information could be used for the testing of autonomous cars and a range of other applications. “Hundreds of billions of miles of human driving data may be needed to develop safe and reliable autonomous vehicles,” TRI’s director of mobility services, Chris Ballinger, said in a statement. “Blockchains and distributed ledgers may enable
pooling data from vehicle owners, fleet managers, and man-ufacturers to shorten the time for reaching this goal, thereby bringing forward the safety, efficiency and convenience bene-fits of autonomous driving technology.”
Odometer fraud
Yet another use case for blockchain could be the reliable doc-umentation of a car’s history. The technology would allow, for example, the verification of car components without the need for a central authority or a critical mass of participants. Two partners would be sufficient to start the system. BigchainDB, Volkswagen Financial Services and German energy company Innogy worked on such a project in a hackathon earlier this year. “The idea is a digital vehicle file that can be used in an interoperable way,” said Carsten Stoecker, senior manager at Innogy Innovation Hub. One concrete implementation the three companies are researching is how to combat odometer fraud, which helps make a car look younger than it is by wind-ing back the gauge that records kilometers driven. Bosch, to-gether with testing company TUEV Rheinland, is engaged in similar research. Using blockchain, a car would get a digital certificate that verifies the data is authentic. And because data is distributed across a multitude of computers, it is safer and cannot be manipulated easily. A Bosch spokesman said a prod-uct to fight odometer fraud using blockchain could be ready for market introduction “in 2020 at the latest.”
A digital certificate would also be an asset in manufactur-ing and supply chain logistics. Cryptographic signatures can be used to confirm the identity of parts across the transport and after-sales process. Bosch said such a system could im-prove quality and efficiency and lower costs. Innogy’s Stoeck-er agreed that there are many use cases for blockchain. Said Stoecker: “There are umpteen kinds of data that would be in-teresting for other conceivable applications.”
By Michael Vogel
and Arjen Bongard
ZF's Car eWallet uses blockchain technology developed by
IBM. (Photo: ZF)
Renault has produced a digital car maintenance book with
the help of blockchain technology. (Photo: Renault)
ENTERPRISE SYSTEMS & SOFTWARE
Winter 2017-2018 15
A fter years of declining revenue growth, the trend is clear-ly rising for the third year in a row. That puts the automo-
tiveIT survey in line with data from Bitkom, Germany’s high-tech assocation, which also registered a sharp improvement in IT business activity. “In the Bitkom sector, the mood is even better than in the overall economy,” association President Achim Berg said.
The top 25 IT service providers have every reason for opti-mism. Last year, the companies in the ranking were able to break through the 4 billion-euro barrier for the first time. And the forecasts for the current year are turning out even rosier. The top service providers expect their total volume of auto-motive business to reach nearly 4.5 billion euros. That would
be an increase of nearly 10 percent. A closer look at the table shows that increases in business were posted almost across the board, with, especially, the top 10 making strong gains. That means the downward trend for the industry’s largest service providers has come to a stop for now. At the top, T-Systems was able to register a slight increase after years of stagnation. After seeing its revenue decline, IBM showed a clear jump from 490 million euros to 524 million euros. DXC Technolo-gy, the company formed after Hewlett Packard Enterprise’s acquisition of CSC, locked in the number 3 position on the list with an increase in revenue to 405 million euros in 2016 from 358 million euros the year before. Jochen Fauser, a partner at the business consulting firm Deloitte, said the good industry numbers reflect the auto industry’s need for reliable partners
ENTERPRISE SYSTEMS & SOFTWARE
24 Management · Top 25 der IT-Dienstleister
automotiveIT 08/09 · 2017
_Unter Vorbehalt. Die 25 größten IT-Dienstleister in der Autoindustrie überraschen mit guten Zahlen und noch besseren Prognosen. Doch die Zukunft der Branche ist ungewiss und die Stimmung könnte jederzeit umschlagen.
T-Systems
18
IBM
13
DXC Technology
10
Computacenter
9
Accenture
6
Sonstige
44
In Prozent
Marktanteile der Top Five: Die fünf größten Anbieter können Boden gutmachen.
Qu
elle
: au
tom
oti
veIT
In Prozent
Umfrage: Welches Thema sollte bei den OEMs in den kommenden Jahren ganz oben auf der Agenda stehen?
Künstliche Intelligenz und Big Data
17
Vernetzte Mobilität und neue Services
63
Vernetzung von Produktion und Logistik
12
IT-Security
8
T-SystemsIBM
DXC TechnologyComputacenter
AccentureMHP
NTT DataInfosys
Atos Information TechnologyCapgemini
All for One Steeb
ESG Elektroniksystem und LogistikSulzer
AltranH&D International Group
CGIAbat
BT Germany
MVI Solve-IT
BearingPoint
Cenit
operational services
Allgeier
ckc
msg systems
Germany’s top 25 IT service providers
A year ago, the top 25 IT service providers to the German auto industry still expected growth of
5.6 percent for 2016. Now, they are looking back on a year where revenues were up 7.9 percent.
And, even better, they expect to post increases of up to 10 percent in 2017.
Winter 2017-201816
during a period of major change. “In light of the complexity of the challenges ahead, customers are increasingly turning to strategic and trusted partnerships with established provid-ers,” he said. In this context, bigger service providers can often offer an overall view of the total value creation chain, from consultation to implementation, and even the operation of the IT systems. Said Fauser: “The providers can especially score points if they have the right mix of broad and deep technology expertise.”
According to this year’s automotiveIT survey, automakers to-day have future-oriented topics high on their agendas, with new mobility solutions and services leading the way as the hottest industry topic for the IT service sector. And, notes De-loitte’s Fauser: “All the new business models, future topics and trends are technology-driven.” Companies such as NTT Data
benefited in particular, boosting revenue 70 percent to 228 million euros in 2016. The rise in revenue moved the provider, a subsidiary of Japanese technology and telecommunications group NTT, from ninth to seventh place.
A look at the forecast for 2017 reveals that IT service provid-ers expect further growth almost across the board. But that doesn’t mean the upward trend is guaranteed to continue. Digital services are on the specification sheet for every auto-maker, but IT companies will have to position themselves as key partners to get their business. That’s especially the case if they want to team up with the auto industry to jointly de-velop new services and business models. Several factors are at play here. First, even though appropriate value-added services are being planned everywhere, many of them aren’t ready yet. Success is, therefore, far from guaranteed. Second, with most
Top 25: The biggest IT service providers in Germany – 2017
Sou
rce:
aut
omot
iveI
T 20
17, n
o cl
aim
to
com
plet
enes
s
In millions of euros
Up/down Rank
Rank2016 Company
SalesAutomotive 2016 Germany
Sales Automotive 2015 Germany
Forecast 2017
1 T-Systems International GmbH 1) 720.0 710.0 720.0
2 IBM Deutschland GmbH 1) 524.0 490.0 534.0
3 DXC Technology 1) 3) 405.0 358.0 425.0
4 Computacenter AG & Co. oHG 1) 348.9 309.5 387.0
5 Accenture GmbH 1) 265.0 230.0 305.0
6 MHP Management and IT Consulting GmbH 240.0 210.0 276.0
7 NTT Data Deutschland GmbH 1) 228.0 133.0 250.0
8 Infosys Ltd. 1) 4) 198.0 165.0 228.0
9 Atos Information Technology GmbH 1) 170.0 160.0 250.0
10 Capgemini Deutschland GmbH 1) 150.0 130.0 170.0
11 All for One Steeb AG 118.1 102.0 132.0
12 msg systems ag 88.0 77.0 90.0
13 ESG Elektroniksystem- und Logistik-GmbH 1) 78.0 81.0 82.0
14 Sulzer GmbH 77.0 75.0 80.0
15 Altran GmbH & Co. KG 1) 72.0 60.0 89.0
16 H&D International Group 1) 62.0 70.0 75.1
17 CGI Deutschland Ltd. & CO. KG 1) 47.8 42.0 60.0
18 Abat AG 42.5 39.0 45.0
19 BT Germany GmbH & Co. oHG 1) 40.0 36.0 42.0
20 MVI Solve-IT GmbH 1) 2) 38.0 38.0 40,0
21 BearingPoint GmbH 38.0 35.0 42.0
22 Cenit AG 37.2 38.3 37.2
23 operational services GmbH & Co. KG 34.0 – 55.0
24 Allgeier SE 25.2 27.1 29.5
25 ckc ag 23.7 23.4 25.0
1) Where company does not provide data, estimates by automotiveIT 2) MVI Solve is a member of the MVI Group3) Data for 2016 includes sales of HPE and CSC 4) Corrected 2015 data • New in the rankings
ENTERPRISE SYSTEMS & SOFTWARE
Winter 2017-2018 17
ENTERPRISE SYSTEMS & SOFTWARE
24 Management · Top 25 der IT-Dienstleister
automotiveIT 08/09 · 2017
_Unter Vorbehalt. Die 25 größten IT-Dienstleister in der Autoindustrie überraschen mit guten Zahlen und noch besseren Prognosen. Doch die Zukunft der Branche ist ungewiss und die Stimmung könnte jederzeit umschlagen.
T-Systems
18
IBM
13
DXC Technology
10
Computacenter
9
Accenture
6
Other providers
44
In percent
Marktanteile der Top Five: Die fünf größten Anbieter können Boden gutmachen.
Qu
elle
: au
tom
oti
veIT
In percent
Umfrage: Welches Thema sollte bei den OEMs in den kommenden Jahren ganz oben auf der Agenda stehen?
Atos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgemini
All for One SteebAll for One SteebAll for One SteebAll for One SteebAll for One SteebAll for One SteebAll for One SteebAll for One SteebAll for One SteebAll for One SteebAll for One SteebAll for One SteebAll for One SteebAll for One SteebAll for One SteebAll for One SteebAll for One SteebAll for One SteebAll for One SteebAll for One SteebAll for One SteebAll for One SteebAll for One SteebAll for One SteebAll for One SteebAll for One SteebAll for One SteebAll for One SteebAll for One SteebAll for One SteebAll for One SteebAll for One SteebAll for One SteebAll for One SteebAll for One Steeb
ESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikSulzerSulzerSulzerSulzerSulzerSulzer
AltranAltranAltranAltranAltranH&D International GroupH&D International GroupH&D International GroupH&D International GroupH&D International GroupH&D International GroupH&D International GroupH&D International GroupH&D International GroupH&D International GroupH&D International GroupH&D International GroupH&D International GroupH&D International GroupH&D International GroupH&D International GroupH&D International GroupH&D International GroupH&D International GroupH&D International GroupH&D International GroupH&D International GroupH&D International GroupH&D International GroupH&D International GroupH&D International GroupH&D International Group
Poll: Which issue should be top of the agenda for automakers in coming years?
On the record:
“Carmakers that don’t want to miss out on a big trend today don’t get around artificial intelligence and big data. Especially with the complexity of autonomous driving, traditional algorithms are no longer sufficient as a solution.”Henrik Ljungstroem, executive vice president & head of automotive, Capgemini Deutschland
“While artificial intelligence will make autonomous driving possible in five or 10 years, the question that’s decisive for customers today is who offers the best connected mobility services”Ansgar Gruendler, sales director automotive, BT Germany
“Analysis of car data with the help of big data and AI platforms opens the door to data, the new gold of the 21st century.”Ruchir Budhwar, regional head manufacturing Europe, Infosys
“Especially the fusion of on-board and off-board technologies represents a central and differentiating work area for engineering service providers.”Berthold Puchta, executive vice president automotvie division, ESG
“Autonomous driving turns the auto industry’s traditional business model on its head. In the battle with new tech players, key is who will dominate tomorrow’s mobility ecosystem.”Axel Schmidt, managing director, automotive, Accenture
“The horizontal and vertical networking of people, machines and goods, even across different plants, makes it possible to make today’s heavily sequential production process more flexible. That will massively increase efficiency and flexibility.”Thomas Garn, sector director, Computacenter
“Increasing hacker attacks show that protection against cyber attacks while driving in a connected car has become one of the most important challenges for the automotive industry.”Dominik Neumann, vice president, CGI Germany.
Market shares of the top 5: The five largest suppliers make up ground.
companies now employing chief digital officers (CDOs), they are more likely to develop programs on their own in-house. A third problem is the public’s loss of confidence in the auto industry, following revelations of cheating on emissions tests, allegations of collusion between German carmakers and other news that has raised questions about the integrity of the indus-try. Insiders say such an environment is not conducive to the
introduction of services based on customer and vehicle data. Finally, industry sources say, the hard-fought “war for talent” is proving to be a real obstacle to the development of new con-cepts.
By Pascal Nagel
24 Management · Top 25 der IT-Dienstleister
automotiveIT 08/09 · 2017
_Unter Vorbehalt. Die 25 größten IT-Dienstleister in der Autoindustrie überraschen mit guten Zahlen und noch besseren Prognosen. Doch die Zukunft der Branche ist ungewiss und die Stimmung könnte jederzeit umschlagen.
T-Systems
18
IBM
13
DXC Technology
10
Computacenter
9
Accenture
6
Other providers
44
In percent
Marktanteile der Top Five: Die fünf größten Anbieter können Boden gutmachen.
Qu
elle
: au
tom
oti
veIT
In percent
Umfrage: Welches Thema sollte bei den OEMs in den kommenden Jahren ganz oben auf der Agenda stehen?
Atos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyAtos Information TechnologyCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgeminiCapgemini
All for One SteebAll for One SteebAll for One SteebAll for One SteebAll for One SteebAll for One SteebAll for One SteebAll for One SteebAll for One SteebAll for One SteebAll for One SteebAll for One SteebAll for One SteebAll for One SteebAll for One SteebAll for One SteebAll for One SteebAll for One SteebAll for One SteebAll for One SteebAll for One SteebAll for One SteebAll for One SteebAll for One SteebAll for One SteebAll for One SteebAll for One SteebAll for One SteebAll for One SteebAll for One SteebAll for One SteebAll for One SteebAll for One SteebAll for One SteebAll for One Steeb
ESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikESG Elektroniksystem und LogistikSulzerSulzerSulzerSulzerSulzerSulzer
AltranAltranAltranAltranAltranH&D International GroupH&D International GroupH&D International GroupH&D International GroupH&D International GroupH&D International GroupH&D International GroupH&D International GroupH&D International GroupH&D International GroupH&D International GroupH&D International GroupH&D International GroupH&D International GroupH&D International GroupH&D International GroupH&D International GroupH&D International GroupH&D International GroupH&D International GroupH&D International GroupH&D International GroupH&D International GroupH&D International GroupH&D International GroupH&D International GroupH&D International Group
Connected cars are beginning to pave the way for new mobili-ty ventures and automotive use cases are on the rise. Already, shared mobility or mobility on demand is gaining ground in markets traditionally dominated by classic automotive retail, private car ownership and the corporate leasing of vehicles. The auto industry is facing a paradigm shift, which is especial-ly clear in the views expressed by younger consumers. Accord-ing to a Ford Motor study, four out of 10 so-called millennials are, in principle, willing to share cars. And, if traffic congestion in ever-expanding urban centers is to be addressed effectively, new mobility concepts have to be developed. Carmakers and other transportation stakeholders are hard at work to develop car-sharing, ride-hailing and other new forms of mobility. And traditional dealerships will have to evolve from providers of sales and maintenance to moblity service providers.
In Europe, a recent example provided evidence that the retail sector is, indeed, on the move. In July, AMAG, a large Switzer-land-based dealer group, said it had acquired a majority stake in car sharing company Sharoo, in a transaction specifically designed to meet customers’ changing mobility needs. “Mobil-ity requirements are changing constantly and we want to meet these requirements in the future as well,” AMAG CEO Morten Hannesbo said in a statement. “ For AMAG, it means that, next to sales, financing, repairs and spare parts, car sharing will be-come another source of revenue. Said Hannesbo: “The prom-ising start-up expands our service portfolio perfectly.” AMAG already owns part of Catch a Car, a provider of free floating car services in Basel and Geneva.
Volvo Cars also is working with its dealers to offer new ser-vices. In 2015, the Swedish car brand offered dealers the op-tion to offer short- and long-term rentals. “The goal was to ex-pand Volvo’s often very rigid leasing offerings,” said Thomas
Bauch, managing director of Volvo Cars Germany. He said the program in particular offers as much flexibility as possible on the term of a lease. The program also offers dealers the option of starting a car-sharing scheme, which would be another step in the transformation to mobility service provider.
Opportunities
In many cities, established car-sharing companies such as BMW’s DriveNow and Daimler’s car2go dominate the mar-ket, but the situation is different outside major urban centers. “In rural areas, there are opportunities for car dealerships to become active on their own with new forms of mobility,” said Stefan Bratzel, who heads Germany’s Center of Automo-tive Management (CAM). A study by the Carl von Ossietzky University in Oldenburg in northern Germany confirmed that dealerships are well positioned for new mobility offerings out-side big cities. Car dealers already have rental and test vehi-cles available and they have knowledgeable staff and an infra-structure in place, the study said. Those factors provide a good starting point for the development of a car-sharing product. The university researchers warned, however, that regional car dealerships will have to be ready to move quickly, once they see demand for shared mobility grow in their area. If they don’t, bigger and already established providers could move in and they would lose a possible first-mover advantage.
By Werner Beutnagel
What about the dealer?Automakers are developing new forms of personal mobility that move away from traditional car
sales. If the trend picks up speed, car retailers will have to adapt their business models.
Source: Car Sharing Association, Statista
Nu
mb
er o
f u
sers
Car sharing becomes more popular: Number of registered users in Germany
2,000,000
1,500,000
1,000,000
500,000
02013
453,000
2014
757,000
2015
1,040,000
2016
1,260,000
2017
1,715,000
Shared mobility
DIGITAL RETAIL & SERVICE
19
D A I M L E R S P E C I A L
Winter 2017-2018
Daimler's R&D operations are changing, much like the premium car group itself. And
new business processes are in line with the transformation of the auto industry as a
whole. The company now has development centers all over the world and is imple-
menting new technologies across its process chain. automotiveIT discussed Daimler's
R&D strategy and the group's digitalization with R&D chief Ola Kaellenius and explored
some of the issues he confronts as the car group readies itself for a new era. More
stories on Daimler's engineering operations can be found at: www.automotiveIT.com.
Daimler’s globalization
Idea generatorWorldwide R&D and engineering centers make localization easier and provide new ideas.
Shifting boundariesDaimler IT is supporting the digital transformation of the company's global R&D operations.
Ola KaelleniusR&D boss says future cars will see systematic decoupling of software and hardware.
20
D A I M L E R S P E C I A L
Winter 2017-2018
Research and development begins and shapes the automotive process chain. Daimler AG has
strategically distributed its R&D facilities around the world – and benefits from an expanding trove
of experience.
Idea generator and trailblazer
T he figures speak for themselves: Daimler is now provid-ing more than 7.5 billion euros for research and develop-
ment, the largest sum in the company’s history. In late 2016, it had 24,200 people working in R&D. Engineers in Group Research & Mercedes-Benz Cars Development continue to constitute the largest share: More than 17,000 employees at 24 locations in 12 countries form the nucleus of a global R&D network. “The know-how, the creativity and the motivation of these employees are key factors in the success of our vehi-cles in the market,” said board member Ola Kaellenius. In an exclusive interview with automotiveIT, the head of Group Re-search and Mercedes-Benz Cars Development, said: “Over the
years, we have built up an international network and defined various competency themes. The locations were chosen very deliberately.” For example, Sunnyvale in the heart of Silicon Valley is one of the leading centers in North America, along with Long Beach (California), Portland (Oregon) and Redford (Michigan). In Asia, the key hotspots are Bangalore (India), the global hybrid center in Kawasaki (Japan), and the research and development center in Beijing.
The strategy makes sense: It puts the complany as close as pos-sible to the customer, even with research and development. Daimler needs international facilities so it can understand
Germany
Powertrain and testing, R&D department, design, future-oriented products, testing and technical center, mobility services
USA
Design and telematics, powertrain development, E-drive components,testing and emissions, autonomous driving, advanced vehicle design
China
Telematics and infotainment, powertrain and testing, design, localization, safety, comfort, authorizations and patents, trends and innovation
India
Design and telematics, IT, CAD simulation, E/E development
Daimler also has R&D centers in Canada, the UK, Italy, Sweden, Israel, South Korea and Japan.
A global R&D network
21
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Winter 2017-2018
what is happening in the world. For instance, if you are trav-eling on Indian roads, you don’t see what you see in Sindelfin-gen. It is not a matter of putting more development hubs on the map. In car manufacturing, the trick is building up a globally integrated network and managing it efficiently without losing the company’s identity. “We have replaced ‘Made in Germa-ny’ with ‘Made by Mercedes.’ It no longer makes a difference where our engineers work worldwide,” Kaellenius said. And the already respectable network is growing: In late 2016, a new technology center in Tel Aviv went into operation – the research projects in Israel especially revolve around digita-lization. Sajjad Khan, Daimler AG’s connectivity chief, went into the details: “Aside from developing and testing pilot proj-ects for new operating concepts, we are building a network of local partners, universities and high-tech companies.” Then, in Lisbon, the opening of the first-ever Mercedes-Benz Digital Delivery Hub followed in early May 2017. The goal of the agile unit in the Portuguese capital: Along with the inventive spirit of young talent, the brand’s strengths and experience are sup-posed to lead to new digital products and business models. So it can expand the Digital Delivery Hub, Mercedes Benz is look-ing for talent with backgrounds in software development, app programming, big data, cloud computing, Java, JavaScript, and Adobe Experience Manager.
Design drawings on your phone
„Digitalization is Daimler’s greatest asset since the invention of the automobile,” said CEO Dieter Zetsche. More and more, the digital transformation is changing the entire auto indus-try, he added. To shape the mobility of tomorrow and to link trends, future technologies and individual customer needs, the company must systematically digitize the value creation chain – starting with the engineering methods and IT tools that are used in the development area. In the core Smaragd system, for example, Mercedes engineers do not just manage the CAD design data for all the mechanical parts. They are in-creasingly storing data from electric and electronic systems, even information from functional and requirements specifi-cations. Employees along the entire automotive value chain, including those in manufacturing and after-sales, can access these central data hubs.
Changes in developers’ workplaces have gone hand-in-hand with the extra functions that state-of-the-art applications of-fer. “We work in a composite world: There are many full-time designers that use high-performance workstations with two screens. And we have occasional users, mobile workers who travel for test drives and work while they are on the road. They prefer to use lean end devices such as tablet computers,” said Siegmar Haasis, who is in charge of IT equipment in the Mer-cedes-Benz Cars R&D area. Today, design drawings can even be called up on smartphones, which may make sense when fast visualization is needed. In any case, the number of mobile users is growing significantly because the mechanical share of development work is on the decline, and the proportion of
electric/electronic systems and software is growing. The re-sult: The once purely CAD-dominated design chain is looking more and more like a software-based design chain. Daimler IT serves it with a multitude of partners that are highly net-worked with the automaker. The job at hand is no longer sim-ply the programming of control devices but rather a universal responsibility, reaching all the way to software deployment with updates over the air.
IT tools for the user
The operating departments and IT share the job of building up the enthusiasm of R&D employees for new digital tools, pro-gramming interfaces, and workplaces. It takes the best possi-ble user experience for the R&D engineers to work effectively. One of the new insights is that the enthusiasm for IT tools is not a question of age. It always comes down to the technical requirements that are embedded in the user role. Employees in charge of components, for example, don’t just work with-in a CAD program. They work in a multitude of core systems every day. It would be a great start if IT could offer them a smart interface cockpit for this, and it effectively bundled all the applications and clearly aggregated the data that they constantly need. Jan Brecht, Daimler’s CIO, is frank about IT’s prior focus. “In IT, we have been looking at the back side of the screen for too long and have been optimizing the functional-ity in individual systems. The time has come to take the user’s perspective.” Here information technology closes the circle between research, design, development, production and sales. In coming years, Daimler wants to play a role in shaping mo-bility with pioneering innovations and to advance digitaliza-tion across the company. Especially in future strategic fields, including networking (Connected), autonomous driving (Au-tonomous), flexible use and services (Shared & Services) and electric powertrains (Electric), it is imperative to know the needs of the customer as precisely as possible throughout the world and respond to them flexibly.
By Ralf Bretting
Photos: Daimler
Heavy R&D focus on cars
Research and development expenditures for Daimler business areas in 2016 (in billions of euros)
Daimler Group 7.57
Mercedes-Benz Cars 5.67
Daimler Trucks 1.26
Mercedes-Benz Vans 0.44
Daimler Buses 0.20
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Shifting boundaries
International locations, short development cycles, greater virtualization – Daimler IT is supporting the
digital transformation of R&D with process know-how and technical expertise.
T he times are long past when Daimler vehicles were exclusively designed in the Mercedes-Benz Technology
Center in Sindelfingen, Germany, and the powertrains were produced in the Neckar Valley. Today more than 17,000 engineers work in a global development network, at locations spread throughout the world. This is made possible by standardized processes, sophisticated methods and above all state-of-the-art IT tools. They connect developers in California, India and China with Germany like a nervous system. “More than 50 centrally operated core systems such as Smaragd and Dialog provide a uniform database at any time. It doesn’t matter where a Mercedes designer works in the world – he benefits from direct remote access to individual
applications, nearly without the loss of performance,” said Siegmar Haasis, CIO, Research & Development Mercedes-Benz Cars. The menus in the programs are multilingual, and the concept for authorizations and roles is clearly defined across all disciplines. “That last part is especially important because we cooperate with third-party companies in joint ventures and want to integrate our development partners closely into the processes,” Haasis said. “Each user only gets to see the data that are relevant for his activity and form of cooperation.”
New technologies such as virtual and augmented reality are explicitly included. When engineers in the United States, Germany and China collectively ponder a component, vivid
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visualization makes it easier to understand the specific tasks and coordinate the local work packages with one another. Since CAD applications always also store the internationally standardized graphic format JT, all the engineering data can flow back and forth without difficulty. Meanwhile, even VR/AR representations can be generated with JT. The information reaches the displays of mixed reality glasses directly, via inte-grated converters. A tedious translation process is eliminated. This helps to speed up development cycles and systematically bypass hardware in the product development process. The dig-ital boundary keeps moving toward the launch of series pro-duction. The most important transformation project currently in R&D is PDM 2020. It revolves around the so-called “digital
twin.” The goal is to produce a digital picture of all vehicles over their entire lifecycle. Core systems are not being repro-grammed from the ground up for this; they are being strength-ened with micro services. “With the digital twin approach, we will address the backend system on a targeted basis and feed mobile apps with data relevant to development and produc-tion, using a multiway connector with defined interfaces,” Haasis said. In the future, thanks to in-depth integration with-in a three-layer-model framework, process control data will be available in role-based cockpits, whatever upstream system they are coming from. Engineering IT is working on the digital twin at full speed. It wants to deliver up to 15 usable building blocks each year between now and 2020 that can collectively form the complete solution in specific products.
CIO: AI is next springboard
To Jan Brecht, Daimler’s CIO, it is clear that vehicle develop-ment will continue to digitize. “Over the decades, we have learned how to depict hardware-related development process-es in information technology – in CAD design systems, in wind tunnel measurements, crash simulations and maturity valida-tion. Now we are seeing more challenges due to the exponen-tial growth in the importance of electric/electronics systems and software.” The S-Class upgrade is underway with tens of millions of lines of programming code. They not only need to be programmed; they need to be tested as well. “The inter-play with the vehicle’s hardware must function perfectly. This entails massive changes in our system environment.” Brecht points to urgent responsibilities that continue right up until deployment. For example, the effects that software updates over the air have on the parts list alone are enormous. Release times, patch management, documentation – the decoupling of hardware and software lifecycles seems like open heart surgery. But that’s not all: “Artificial intelligence is the next springboard that I see: it isn’t merely playing a main role in au-tonomous driving; it is woven across domains into the processand IT landscape, and naturally in the R&D field as well,” Brecht said in an interview with automotiveIT. The buzzwordis cross-functional system responsibility: today such topics asremote parking cut across multiple development disciplines, and engineering IT has to map this out. The boundary betweenIT projects and adaptations of engineering processes is becom-ing fluid. A model-based system platform can provide techni-cal support with applications that allow IT to create digital pro-totypes. State models, dependencies, simulation of complete functions and cross-domain effects – the description of all the requirements is no longer text-based but model-based. It’s an approach that even allows a high degree of maturity in the ear-ly phases of specification– just the way everyone in research and development always wanted. Lately the Mercedes-Benz S-Class has been comprehensively modernized in this way and is now confirming its role as a technological trailblazer.
By Ralf Bretting
Photos: Daimler
It doesn’t matter where the designer works – without any
loss of performance, he has direct remote access to individual
applications.
Virtual and augmented reality are becoming important tools.
When the engineers explore new systems, a plastic visualizati-
on makes it easier to understand the assignment.
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In Daimler’s global development network, each facility has its core competency and is tightly networked
with the operating departments. Ola Kaellenius, the head of Group Research and Mercedes-Benz Cars
Development, talks about the current distribution of responsibilities and upcoming challenges as the
auto industry forges ahead on the path to zero-emission mobility.
»We are now making the largestdevelopment investments in the
company’s history«
An interview withDaimler R&D boss Ola Kaellenius
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Daimler’s R&D network extends from the West Coast of the United States to facilities in Germany, Israel and India, all the way to China’s eastern seaboard. How can individual development tasks be effectively managed in this global network? We have built up an international network over the years and defined various competency areas. The facilities have been chosen very deliberately. This might help you understand it: The headquarters of the network continues to be Sindelfingen, Germany, for vehicles and Untertuerkheim for powertrains. We have been in Silicon Valley for more than 20 years, intensi-fying our connection with the tech industry on site. On Amer-ica’s West Coast, we are primarily further developing user interfaces for our connected-car features or are advancing au-tonomous driving. We now have 400 employees working for us there. In India, our focus is on new interior issues, among other things. And in China, in addition to the localization of individual models, we are now starting to develop special derivatives for the Chinese market.
An A-Class derivative? Something like the sedan you showed at the auto show in Shanghai?(Laughs) An independent model in the high-volume segment. Stay tuned. If I may, I would like to briefly follow up with the point that you brought up. Two new competence centers are now being added: Tel Aviv and Seattle. Israel is very strong in the area of cybersecurity, and Seattle is the world‘s cloud com-puting capital. So you see that every facility has its own exper-tise, its own logic – and is clearly networked with the operat-ing areas. That is our plan for success.
More than 17,000 engineers now work in your area worldwide. Will this number continue to rise over the next five years?It depends on how you look at it. On the manufacturing side, we are assuming a vertical integration of about 30 percent in our development work. In other words, there are numerous engineers on the supplier side who interact with us. What I mean is, we do not consider growth to be the objective we are pursuing. Instead we have to define the technologies that we need for vehicles and how cleanly we map their implementa-tion in the process. So the keyword is flexibility. This is the only way that we can appropriately anticipate technological trends and define the vertical integration ourselves and thus have an impact on it.
At the moment, the value creation chain is undergoing permanent change. Electric cars require fewer compo-nents. What will happen to the development specialists for internal combustion engines, for example? We are now experiencing what is likely the most intensive phase for internal combustion engines ...
In the debate over its fitness for the future perhaps …No, in the technology! We are now bringing out a series of new high-tech power-trains. In the recent model upgrade for the S-Class, for example, the engine lineup is nearly completely new. We’ve developed an in-line six-cylinder engine with an
integrated starter generator, which simultaneously feeds en-ergy into the battery thanks to efficient recuperation. The belt drive is eliminated due to the starter generator, which means less installation length on one hand and reduced com-plexity on the other. With the new powertrain, we’ve made a huge leap in drivability, performance and fuel consumption. And then there is the new diesel family with the OM654, an advanced four-cylinder diesel with fourth-generation com-mon rail fuel injection. The powertrain is already designed for the future emissions legislation RDE (real driving emissions) stage 1. And last but not least, over the summer we introduced the OM656, a new six-cylinder diesel. As I said, we are going through an intensive phase.
Which does not hide the fact that electric mobility is the future, or is it?Of course, you are right on that: In the long run, the impor-tance of electrification will increase dramatically. We are ultimately on the way to zero-emissions mobility. At Mer-cedes-Benz Cars, we are launching a broadly based electric offensive with 10 models by 2022 and are investing 10 billion euros in the expansion of the EQ family alone. In 2025, we are expecting between 15 and 20 percent of overall sales to come from purely electric, battery-powered vehicles. Yet the interim goals that we are addressing with the new internal combus-tion engines are enormously important as 75 to 85 percent of the vehicles will still have an internal combustion engine as their main drive module. And these powertrains will have to be low-emission, fuel-efficient and high-performing.
In your estimation, how quickly can the costs of a kilo-watt hour be reduced for electric mobility? The costs for the range that we are targeting are still substan-tially above the mark that we are familiar with from the world of the internal combustion engine. As 2025 approaches, they will look significantly better, both in terms of energy density and the costs per kilowatt hour.
Can you give us specific figures on this?I wouldn’t like to discuss our purchasing prices in public, but they are definitely moving in the right direction. We can’t say with certainty when the crossing point will be reached where the figures for the classic internal combustion engine and the electric motor may be comparable. We assume that will be around the year 2025 in some segments.
»The physical product continues to
be important«
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One key issue in the German auto industry is whether it makes sense to manufacture cells in Germany? You need large volumes for cost-effective cell manufacturing. For our company, that definitely doesn’t make sense because you would really have to run extremely high volumes to keep up with players who build huge factories around the world and supply all kinds of manufacturers. On the module and system levels, as far as batteries are concerned, we’ve made an equally clear decision: We are building them ourselves.
What is happening with the fuel cell, which was given a huge push a few years ago?We are working at full speed on a production-ready version of a GLC as a fuel-cell plug-in hybrid, which the first customers are likely to see in the very near future. The system is more compact, higher-performing, and substantially more afford-able than just a few years ago. Still, the question naturally aris-es: Where do we go from here? We are taking multiple routes on our path to zero emission mobility, and the fuel cell is defi-nitely an integral component of the strategy. It has two great advantages: You can fill up in less than three minutes and it has a greater range than battery-electric vehicles. On the other hand, there are the production costs. In addition, infrastruc-ture has to be especially created for the technology. One thing is clear: Both technologies are important. But the major indus-trialization will take place first in the battery-electric field.
On another topic that is likely to keep development departments busy: In the battle for the best IT and
software talent, Daimler is in direct competition with highly desirable employers such as Amazon, Google and Microsoft. How can you arouse interest and passion for the automobile as a “device.” We have ramped up our software competency by adding sev-eral hundred people and we will grow significantly in this dis-cipline in the future. For starters, I do find that cars continue to be a source of fascination. They are, so to speak, the third living space after the home and the office. As a product, the au-tomobile is attracting increasing numbers of computer science engineers. So we are continually ramping up our recruiting. Here our motto is, let’s go where the people are – let’s go where the talent is. This fits our global network perfectly. Thanks to the fact that the Mercedes-Benz brand is known worldwide, we have a strong position with young software talent.
For marketing and sales, the digital ecosystem outside the vehicle now seems to be more important than the vehicle itself. In any case, automotive advertising has made the switch …The physical product continues to be important. Even in the case of the smartphone, the aesthetics and quality of the hard-ware, among other things, are important. Naturally the digital ecosystem – from iTunes to the App Store and everything that I can do with them – is decisive for the purchase decision. But ultimately it is an intelligent symbiosis between hardware and software. The ecosystem that we have created with “Mercedes me” is becoming increasingly significant, and it is becoming more and more important to expand it further. Hardware and software are part of the purchase decision. Both are highly rel-evant to us.
In the context of the digital transformation, automakers are evolving into mobility providers. What are the con-sequences for your area? In addition to private ownership, mobility services are grow-ing substantially in importance. That’s also the reason why we initiated car2go and established Blacklane – to cite just a couple of examples. These are fast-growing fields, and, in the future, we will have to integrate our vehicles into these mobil-ity services systems.
What does this specifically mean for your R&D area? We are now making the largest development investments in our company’s history because the major technological trends are tied to increases in investment. This is already preparing us for the mobility of tomorrow. In a way, we are reinventing the automobile. At the same time, we are paying close atten-tion to see that every vehicle project and every business case are sound. Our company must be both an automaker and a mo-bility provider. It’s a little like a good football game: You have to score out front and deny the other team any goals.
Interview by Ralf Bretting and Hilmar Dunker
Ola Kaellenius was born on June 11, 1969 in Vaestervik in south-eastern Sweden. He completed masters-level studies in international management and finance and accounting at the Stockholm School of Economics and the University of St. Gallen (Swit-zerland), attending them from 1988 to 1993. In that year, he joined the international junior-level group of what was then Daimler-Benz AG. Since January 2015, Kaellenius has been a board member of Daimler AG. In January 2017, he assumed responsibility for Group Research and Mercedes-Benz Cars Development. A longer version of this interview can be read on
www.automotiveIT.com
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Silicon Valley: the Detroit of the 21st century?
Silicon Valley is host to some of the world’s leading disruptive technology companies, including Apple, Google, and Facebook. Each is synonymous with high shareholder value and innovative approaches to delivering compelling new products and services that improve countless lives. These companies have created new business models and upended established industries almost overnight with innovative ideas that challenged the status quo. Their influence is so ubiquitous that no industry is insulated from their effects upon customer expectations on products and services.
Silicon Valley upstarts such as Uber, Lyft, and Tesla have taken Detroit to task by injecting a healthy dose of innovation into a fundamental element of most consumer’s lives—transportation and automotive retail. Empowered with bold ideas and approaching the problems of manufacturing and mobility with an innovation mindset, each has created exciting alternatives to “business as usual” focused on a future in which mobility can take a variety of forms and fossil fuels and even drivers are no longer required.
Inspired by a new generation of connected and technology-hungry global consumers, technology start-ups have grown into new automotive titans with massive market capitalization by challenging traditional automotive companies’ long-held beliefs about customer behavior. In fact, our Capgemini Cars Online 2017 survey showed that 57% of global customers surveyed might switch from their current car brand to a vehicle offered by Google or Apple. Will the “New” automotive industry unseat Detroit? Only time will tell, but customers definitely expect more from automotive companies and dealers as digital disruption impacts every facet of our lives. And Detroit is taking note.
In fact, the leading Detroit OEMs, their European counterparts, and leading Tier 1 automotive suppliers all have a local presence in the Valley. Alongside scrappy start-ups, each is taking advantage of the local talent pool to invest in the future of mobility: new connected vehicle Internet of Things (IoT) business models, vehicle electrification as a sustainable alternative to fossil fuels, sharing as a more social, affordable and convenient way to travel, and autonomous vehicle technology as possibly the safest way to travel in the future. And of course, harnessing the many petabytes
of data from connected vehicles, which can unlock new value propositions for comfort, convenience, and safety for mobility of the future.
The need for automotive companies, dealer retail networks and Tier 1 automotive suppliers (from Detroit and around the world) to transform to digital is increasingly important. The challenges each automotive company faces, while touching common themes, are unique to each company’s brand, customer base, and customer journey. Our teams at Capgemini have partnered with some of the world’s leading automotive, large dealer group and Tier 1 automotive supplier clients to tackle digital transformation together and realize results. Through our global Capgemini Applied Innovation Exchange (AIE) laboratory network, we partner with leading technology start-ups from the local ecosystem, our technology experts, and our clients to support leading-edge digital strategies supported by real business cases and results.
As an experienced partner, Capgemini can help not only craft your digital strategy but also bring it to life, focusing on business transformation, digital innovation, enabling technology, and complete digital transformation. Our global automotive team would be happy to discuss your company’s unique needs and the realization of your digital transformation journey.
I f you think that, today, you can still work in a traditional office environment and be productive, think again. Ag-
ile methods are rapidly becoming standard for project work across the auto industry. Specification sheets are out and task boards are in. Waterfall communication is replaced by scrum sprints. And small, connected teams are conquering old-fash-ioned hierarchical silo approaches. The goals are clear: Less bureaucracy, more efficient processes, extreme proximity to customers and the constant availability of IT tools and soft-ware should enable total concentration on the results. But most important is the location: a lab, a garage or a complete factory hall will work. Key is that the slightly morbid charm of the old economy is still tangible, even while it is being pepped up to become start-up-fit with the help of a range of hipper ac-cessories. That means lounge corners, white-board-like walls, open kitchens with coffee machines and, whenever possible, a foosball table. And the strangest thing of all is that it could actually work. automotiveIT has visited two of the new auto-
motive workspaces. One is the Xtron Lab located at the Mer-cedes-Benz Research and Development Center in Menlo Park, California. The other is the so-called “agile process workplace” near Audi headquarters in Ingolstadt, Germany.
Xtron
Xtron doesn’t look like much from the outside. There’s no company name on the building, no Mercedes star on the door. Inside, all is pure creative chaos. Neal Ulrich, who works in product development at Mercedes-Benz Vans, rides his bicycle to within inches of our meeting room table. We get two coffees and talk about connected package deliveries. The discussion is all about algorithms that run the logistics processes and can steer delivery vans to their destinations in the fastest possible way. Three or four solutions are being worked on at the same time. And if a red light comes on at one of the projects, the lab
Out of the office
»The level of freedom that we enjoy in the Xtron Lab is different from other R&D operations in the Daimler Group« Neal Ulrich, Mercedes-Benz Vans Future Transportation
The auto industry is adopting agile project development methods. As a result, traditional desk jobs are
being redefined as workers take care of business in new and different ways. automotiveIT has taken a
look at two of the new work environments.
The agile workplace
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ENTERPRISE SYSTEMS & SOFTWARE
continues to work on the other ones. Prototypes are ready in a matter of days. The interdisciplinary garage work force takes care of that. Interesting to note: Only a few of the colleagues have an automotive background. There are electrical and soft-ware engineers, a few carpenters and machinery builders and many Silicon Valley university graduates that have been born and raised in the local innovation culture. In late June, the lab had 25 workers, double the number of a few months earlier. “The level of freedom that we enjoy in the Xtron Lab is dif-ferent from the other R&D operations in the Daimler Group,” said Ulrich. “That lets us work faster and in an agile way on projects.”
In the Xtron Lab, the team is, in first instance, working on ways to make the cargo space of delivery vans intelligent. That can be done with sensors that help van drivers quickly find packages and deliver them in a speedy manner. In a second move, the receiver of a package can be involved in the deliv-ery process. “That’s not easy,” said Ulrich. “Solutions that are interesting to fleet managers and drivers are often different from the ones that are advantageous for the receiver.” But the overriding goal is to increase efficiency, Ulrich said. How that is achieved is less relevant to the customers. What’s important is that the solution works.
Audi
At Audi’s workshop, things are no different. The carmaker has gathered experts from different business areas and put them in a room with IT specialists. The common assignment: Speed
up the digitization and optimization of core processes. In con-crete terms, that means improving all phases of data manage-ment as cars are being developed. It’s a hard nut that can be cracked, however, when the 50 strong colorful mix of experts overcomes classic company boundaries and cooperates with a high degree of freedom. In this new world, the project goals and the work methods have been set out, but there is no specification sheet and the final result of the process is open. The work is approached according to the onion layer model: you start on the inside and work your way out. The project got underway with an intial proposed solution and now the scope is gradually expanded. “To make fast progress we are optimizing processes and, in parallel, are developing the necessary IT tools,” said Arno Lang, project manager at Audi Consulting.
Important for the success of the project is the way it is orga-nized. Engineers report into the project organization and not into the individual business areas. The team works three days a week at the process workshop, using sprints and agile meth-ods to come up with concrete process and IT solutions. The other two days, each engineer works in his “normal” office environment. Audi CIO Mattias Ulbrich has actively pushed the agile process workshop. “We create optimal transparency about our progress and we have an intensive information ex-change with the business units,” he said. “This way we achieve our common goals faster and with higher quality.” Audi says it wants to use the approach in other company processes as well.
By Ralf Bretting
Photos: Claus Dick, Jasmin Van T
»We create optimal transparency about our progress and we have an intensive information exchange with the business units« Mattias Ulbrich, CIO Audi
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K oslowski says that the far-reaching changes that are com-ing to the marketplace for personal mobility will affect
every automotive segment, from small cars to mainstream volume models, to luxury sedans, to sports car brands. Hence, Porsche will also be affected. Koslowski embraces the change. He says that, while the digital transformation message has hit many automakers in the form of a threat to their long es-tablished practices, for Porsche it means a huge opportunity. “We’re optimizing what we can do for the customer and will be enhancing the Porsche experience,” Koslowski said in an interview at the Frankfurt Auto Show. Since he joined Porsche, Koslowski has increased the digitalization team from two ini-tially to 50 today. And the team continues to grow. Around 70 projects are in the works across the company. The challenge
Koslowski faces is unusual because the brand has one of the strongest images in the global auto industry and people buy a Porsche for reasons that likely won’t change radically in future. That’s as it should be, Koslowski says. But he believes a broad-er offering of digital services will improve the relationship of the customer with the brand, strengthen the ownership expe-rience and make driving a Porsche even more enjoyable. “Our customers are used to premium offerings and expect the best,” he says, adding that new service offerings will seamlessly tie in with that image.
Most of Porsche’s new digital products will start coming to market in 2018, Koslowski says. The company announced in September that it was investing in a start-up called home-iX,
Digital options
It’s been 20 months since Thilo Koslowski moved from market researchers Gartner to Porsche.
The new digitalization chief has built a team that continues to grow and he has been hard at
work adding a whole new digital dimension to the iconic sports car brand’s image in the market.
Porsche builds new services around core brand values
Digitalization strategy
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which specializes in so-called “smart living solutions.” The car should be part of this new world and, for the CEO of Porsche Digital, smart living is “a crucial milestone on the road to a digital lifestyle.” Parking also is a focus area for Porsche, be-cause the time-consuming act of finding parking spots is con-sistently seen by drivers as one of the worst parts of the ur-ban driving experience. Earlier this year, Porsche invested in Evopark, a German start-up that is developing a nationwide digital parking service. It’s part of Koslowski's goal of provid-ing “more meaningful” services to Porsche owners. Another improvement Porsche plans to offer is over-the-air updates. The coming ability to update key software features in the cars remotely will be a major improvement in the ownership expe-rience, Koslowski says. “We cannot do that remotely today, but will be able to very soon.”
Not a robo-taxi
No industry has been disrupted to the extent the automotive sector is being transformed at the moment, Koslowski says. But he feels automakers are looking too much at the opportunities made possible by new technology and not enough at the cus-tomer experience. While many automotive companies, includ-ing the Volkswagen Group, Porsche’s parent, are on the way to becoming technology companies, Porsche, says Koslowski, is on a dual trajectory. “We’re already a technology company and now we’re adding a digital technology component,” he said. “But I also see us as an experience company; we want to excite the customer with the Porsche experience, which you cannot get anywhere else.”
Amid all the change, Koslowski says Porsche will make sure that core brand values are maintained and that new apps,
functions, services and other offerings will only be added if they make sense to the Porsche customer. “We want to make sure that we offer a strong value proposition,” Koslowski says. Porsche will likely also offer full autonomous driving some-time in the future, but the technology will have to be part of the overall offering. Three questions will need to be answered: Will tomorrow’s Porsche give the driver more time for him-self, will he become more efficient and will he still get the full Porsche experience? Especially with regard to the latter, an autonomous Porsche will always have a steering wheel and pedals for key vehicle controls, Koslowski predicts. Even if the industry eventually moves to Level 5 full autonomous driving, a Porsche owner will want to retain the option to drive him-self. “If you’re stuck in traffic and don’t feel like driving, you can push a button that gives you autonomous capability,” he says. “But if you eliminate the steering wheel and pedals, you essentially become a bus or a robo-taxi, and that’s not the way we think.”
By Arjen Bongard
Porsche has acquired a minority stake
in home-iX, which is developing a
"smart living as a service” platform.
“... smart living is a crucial milestone on
the road to a digital lifestyle”
Pho
tos:
Por
sche
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ENTERPRISE SYSTEMS & SOFTWARE
Pho
to: W
aym
o
Learning is typically defined as the act or experience of ac-quiring new knowledge, behaviors and skills, or modifying existing ones. Humans thus learn to drive the same way they would acquire other skills. Teaching these skills to a "self-driv-ing" car will be fundamentally different, as it will require cre-ating a series of algorithms that work in conjunction with the vehicle's various sensors, as well as predetermined data such as GPS coordinates and street maps. One of the challenges is
that a deep learning system for driverless cars has to recog-nize patterns as well as context, said Aman Atak, technology analyst at market research firm IDTechEx. "There will need to be a very powerful system to handle the processing of the algo-rithms," she said. And there are many more challenges to over-come. Training these systems could itself present problems, said Anirudh Venkitaraman, senior analyst for autonomous driving and ADAS at market researchers Frost & Sullivan.
Machine Learning
While automotive executives, analysts and journalists debate how realistic the timetable for autono-
mous driving is, they agree that driverless cars won’t be able to reach their potential without artificial
intelligence and machine learning. There are just too many different possible traffic situations for
human programmers to deal with. For a fully computerized car to drive independently, it will, there-
fore, have to learn on its own. But that’s not as easy and straightforward as it sounds and chances are
that AI development, initially, could even slow down the rollout of autonomous vehicles.
The challenging task of teaching a car to drive
Google's Waymo has been testing a fleet of
driverless Chrysler Pacifica minivans on public
roads this year.
Artificial intelligence
Winter 2017-2018 33
ENTERPRISE SYSTEMS & SOFTWARE
"It is difficult for the programmers to validate what the sys-tem has learnt after training," he said. Several simulations are required to assess the software capability. Literally millions of miles will need to be driven as well to consider different variables. That’s because so-called neural networks need to be repeatedly trained to include all possible traffic situations an autonomous vehicle could encounter. "Unless this is done with highest accuracy, transfer of control from the human driver to system and vice-versa could be dangerous as the system," Ven-kitaraman said.
The algorithms governing a driverless car’s moves will behave to the exact letter of the law and no truly autonomous car will exceed the speed limit, fail to stop at red lights or make illegal turns. However, this could present another unique problem that designers will need to work out. "We could see situations where multiple intelligence systems have to make a decision," said Jim McGregor, principal analyst at high-tech trend advisers TIRIAS Research. "Whose car has a right of way if they are going the same speed in the same direction and both want to change lanes?" McGregor added that human drivers would know to slow down or speed up, but he wondered how artificial intelli-gence would handle such a situation.
Data Gathering
Human drivers typically rely on visual information and, to a lesser extent, on sound. Autonomous vehicles will have mul-tiple visual cues from sensors, but will need to ensure that this data is processed accordingly – especially if some of it is contradictory. "One of the largest issues with respect to AI and machine learning for autonomous vehicles (AVs) is the qual-ity of data gathered from all the sensors onboard the vehicle itself and their compatibility with other forms of data," said Alexander Wyglinski, senior member of the IEEE technical association and associate professor of electrical and computer engineering at Worcester Polytechnic Institute. Lidar, radar and vision systems are generally considered to be the primary means by which AVs will collect sensor data to obtain real-time situational awareness and most experts agree that multiple
sources of sensor data are needed to make reliable driving de-cisions. However, for computers to learn to make reliable de-cisions based on all this data, each piece of information needs to be properly time-aligned. That means all data samples need to be from the exact same moment and have the same resolu-tion. Said Wyglinski: “AVs cannot have one sensor producing low-resolution data and the other producing high quality data; that will throw off the AI/machine learning algorithms." And the computer engineering expert warned: "This issue needs to be resolved in order to make AVs more reliable and safe.”
Localized Systems
One of the promises of the connected vehicle is that it can share data, so weather events as well as road conditions can be passed on to other vehicles. This is one area where the cloud will play an important part, but problems arise when there are no other vehicles to share the data, or when connectivity is not available."Rural areas won't be able to afford creating a smart grid, and there will be times in remote areas where there ar-en't other cars on the road," said TIRIAS researcher McGregor. "That only increases the challenges of onboard machine learn-
Delphi has conducted extensive tests across the US with a
modified driverless Audi model. (Photo: Delphi)
Automakers use machine learning to allow the car to
Tesla's Autopilot is one of the early systems that allowed
longer periods of hands-free driving. (Photo: Tesla)
Winter 2017-201834
ing. AVs can't rely on the cloud in these cases." Instead, the intelligence will have to be centralized in the vehicle, which will then have to be more self-reliant. And that pushes the de-mands of machine learning. If connectivity is available, anoth-er issue looms on the horizon. "Going forward, connected cars could create several terabytes of data each day," said Shriram Ramanathan, senior analyst at Lux Research. But the cloud or the connection from the car may not have the capacity to han-dle such volumes in a speedy manner. Still, passengers in to-morrow’s autonomous vehicles will expect AV software in the car to be robust and offer full redundancy under any circum-stances. That's why it will be important to train AVs' neural networks on representative datasets that include examples of various situational conditions. "Human drivers often associate their driving decisions, especially in adverse conditions, with relevant past experiences," said Wyglinski. "AVs will need to be able to do the same thing in case they are faced with a driving scenario they have not experienced before." For that reason, databases stored inside the vehicles are going to be important. Said Wyglinski: "Prior experiences will help prepare neural networks to make the correct decision when a new situation occurs."
New techniques needed
To reap the full benefit from artificial intelligence and machine learning, the technologies will have to be refined. "Ensemble learning would be a very relevant technique for AVs, especially when there exists a wide range of operational environments to deal with," Wyglinski said. Ensemble learning employs multiple learning algorithms to achieve a better predictive result. A neural network selects an appropriate network from an ensemble and applies it to the vehicle in real time. If the car’s computers have never encountered a particular situation before, a new neural network is formed and training can be-gin. The systems face a particular challenge when decisions
need to be made in split seconds. Then, sensors will be most important, and the algorithms are called upon to make some hard choices. "Machine vision is great at recognizing people or animals, but only in a controlled environment," said Lux Research’s Ramanathan. "It will be up to complex algorithms to decide what to do when sensors don't know what they are seeing. There is always going to be a situation that comes up that the system may not have dealt with before." This is where transfer learning could become even more important. "The car will need to think like a human," Ramanathan said. He offered the example of whether a car, heading for an unavoid-able collision with humans, should decide to hit one child or five grown-ups. "Most humans can't make such a decision, so do you even program that into these systems?" he asked. One thing is clear, said Ramanathan: “"It will take years to develop this technology." By Peter Suciu
Nvidia has invested in JingChi. The Chinese self-driving car
company has already tested its autonomous technology on
public roads in China. (Photo: Nvidia)
NEWS IN BRIEF +++ NEWS IN BRIEF +++ NEWS IN BRIEF +++
Audi trains staff in big data, AIAudi is expanding its staff training programs to build up expertise in key
areas such as big data and artificial intelligence. The premium car maker is
working with the online platform Udacity to get its work force ready for a
digital future. Focus areas for the so-called “data.camp” program are
blockchain technology, the analysis of large volumes of manufacturing data
and machine learning as it applies to accounting operations. “In our areas
of the digital future, the rapid development of new IT skills is a critical com-
petitive factor,” said Michael Schmid, who heads the Audi Academy, which
coordinates all training activities across the carmaker. Automotive compa-
nies are facing a shortage of skilled IT workers as the industry increasingly
requires software expertise to develop its new business models. Audi will offer a range of training modules, from basic data analysis
to more complex topics such as machine learning. All employees will get training in big data.
ENTERPRISE SYSTEMS & SOFTWARE
(Pho
to: A
udi)
Audi’s data.camp program aims to improve the digital skills of the carmaker’s work force.
Winter 2017-2018 35
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Winter 2017-201836
PRODUCTION & LOGISTICS
T he worker is again trying to find the physical position al-lowing him to use his screw gun without difficulty. His
task: To attach a device holder on the longitudinal support of the truck chassis that stands before him in the assembly area. But no matter what he does, the protruding steering gear gets in his way. The designer of the vehicle undercarriage is there watching the scene.
“It just doesn’t work that way,” the worker says with resigna-tion. The designer examines the source of the difficulty and then agrees: “Yes, that has to be changed.” In reality, the work-er and the designer are not in the same room, much less the same building. They are in two widely separated sites that belong to commercial vehicle manufacturer MAN, part of the Volkswagen Group. Both are standing in a “cave,” a space for the production of virtual environments using projectors. Even the truck, the object of the worker’s fruitless efforts, is only present virtually. But the data are real. They come from the Catia files of the CAD system that is used companywide. The information is converted to the JT graphic format, rendered by high-powered graphic computers in real time and projected in
stereo onto the cave’s internal walls. The scene in a MAN man-ufacturing hall shows that the virtual reality (VR) technolo-gy that emerged from the computer game scene has become part and parcel of corporate IT. There is the same opportunity to move through a world of images created by data and to in-teract with it. But the objective has changed. The heroes of cor-porate VR don’t have to survive exotic adventures. They solve everyday problems.
There is a precisely defined objective when design and produc-tion come together at a new vehicle that only exists in CAD systems. At an early phase in the vehicle’s development, en-gineers can determine whether the vehicle can be built with-out difficulty. At MAN and many other vehicle manufacturers, virtual reality has become part of the everyday IT routine. “VR promotes front-loading,” said Martin Raichl, who is responsi-ble for virtual processes at the pre-series center at MAN in Mu-nich. Front-loading is defined as handling as many of the fine adjustments as early as possible in the development process. At that point, changes are relatively easy to make and are less costly than they would be later.
A question of presentationFine-tuning VR and AR technologies
Can it be done? A VR representation
uses CAD data to answer the question.
Virtual and augmented reality are hot technologies in the auto industry. But the sector has to
work on the details if it wants to realize the full benefit of these powerful tools.
New Tech
Winter 2017-2018 37
PRODUCTION & LOGISTICS
MAN is not the only vehicle manufacturer turning to virtu-al reality in its development and production processes. For example, Audi, which, like MAN, is part of the Volkswagen Group, uses VR to check the look and feel of vehicle surfaces virtually and to see if they are executed correctly. “VR is one of the major issues. It is considered to be an evolutionary devel-opment of the human-machine interface,” said Jens Angerer, technology developer in Audi’s production lab. Here, among other things, the staff develops VR technology and options for its deployment. The company’s users can be found along the entire development process. And, as the VR glasses get their images right from the design data, developers and planners can view their work in life-sized dimensions. Development er-rors are quickly discovered, long before a prototype is built. As a result, the use of VR saves real money. “We see great po-tential for VR in many areas – from the first design ideas to production,” Angerer said. For example, production processes are checked for their feasibility and ergonomics. “The range of scenarios goes from the processes at sheet-metal presses all the way to final assembly,” he said
Using Google Glass
Audi’s premium brand competitor BMW has refined the use of the technology a bit further. BMW is gearing its VR cinema for a diverse group. Depending on the situation, applications are being developed for board members, high-level manag-ers or other participants all the way down to project manag-ers and development engineers. “If it is used as a discussion or work medium for designers and engineers, it is important to be able to display and play the various versions quickly,” said Marc Eckel, who is responsible for VR methods at BMW. The BMW engineers’ approach goes beyond just the science of virtual reality. “Our approach is mixed reality,” a source at BMW said. Mixed reality means that the visual presentations are combined with a highly simplified hardware model. BMW has turned to a computer farm from the game industry’s arse-nal and virtual acoustic sources that are precisely positioned spatially. This shows that it values representations that are as realistic as possible. Eckel says high-performance VR glasses produce a greater degree of immersion. “And a higher degree of immersion creates a good basis for making decisions on the validation,” he said.
At Audi, engineers are gaining experience with another ver-sion of the reality-data consolidation: augmented reality. Here work-related data is projected into the viewer’s field of vision – increasingly in glasses such as Google Glass or Mic-rosoft’s HoloLens. For example, in its engine production op-eration in Hungary, Audi has a special production process for engines that must be available as replacement parts long after the series production is phased out. Instead of storing the en-gines in large spaces, Audi decided to convert its operations: The engines are only produced one at a time to meet a cus-tomer’s need. The array of products covers more than 100 dif-ferent variations. Every job is different, so it’s a challenge for employees who have to rethink their tasks again and again,
even though they are very experienced. So the company has launched a test that projects information via augmented reali-ty with Google Glass in the worker’s field of vision, much like a head-up display. Angerer says the AR approach has advantag-es over the system used previously. It guides the employee us-ing presentations on a computer screen. “The solution is more mobile and, due to the speech capability of Google Glass, the system has a back channel.”
A matter of trust
Many questions are still up in the air. VR and AR users still run up against the limits of the technology all too frequently. Eck-el, for example, laments the still modest image quality, saying it is insufficient for his purposes. “The limited resolution is still a disadvantage,” he said. “The high resolution 4K video for-mat is still not available as a standard feature. We expect that something will happen in this area soon.” VR users at MAN also complain about such technical shortcomings. The current cave is designed for the use of lighter, more active stereo glass-es. The heavy head-mounted displays (HMDs) that are used in game scenarios – and at BMW – were tested and then put aside. The users’ conclusion: The resolution, field of vision and wearing comfort leave much to be desired. In Raichl’s opinion, the actual problem with VR and AR is the mental factor. When HMDs are used, coworkers in the same room remain invisible. It takes at least some time to get used to that.
In addition, many users have to fight off a kind of malaise similar to seasickness. That’s not likely to promote rapid ac-ceptance. These factors limit VR sessions to much less than an hour. Even more serious is the fact that users do not trust the VR system as intuitively as they do their classic measurement and control instruments. This makes it harder to adopt virtual reality as a genuine tool for project management. “It is a ques-tion of acceptance,” said MAN team leader Raichl. “To begin with, you first have to trust yourself to make real-life decisions based on the virtual representations – even if the experience at MAN clearly shows that VR makes a valuable contribution to front-loading.”
By Christoph Hammerschmidt
Photos: Audi, MAN
32 Entwicklung · Virtual/Augmented Reality
automotiveIT 08/09 · 2017
Fokus auf Fertigung: Viele Unternehmen nutzen Augmented Reality, um Mitarbeiter zu schulen
trachters eingespiegelt – immer öfter in eine Brille wie Google Glass oder die HoloLens von Microsoft. Das geht so: In seiner Motorenfertigung in Ungarn betreibt Audi einen speziellen Fertigungsabschnitt für Motoren, die als Ersatzteil noch lange nach Ende der Serienfertigung verfügbar sein müssen. Statt die Motoren in großen Hallen zu lagern, hat Audi die Fertigung umgestellt: Die Motoren werden nur noch individuell nach Kundenbedarf produziert. Die Produktpalette liegt bei mehr als hundert verschiedenen Varianten. Jeder Auftrag ist anders – eine Herausforderung für die Mitarbeiter, die trotz viel Er-fahrung immer wieder umdenken müssen. Daher startete das Unternehmen den Versuch, die jeweiligen Informationen per Augmented Reality mit Google Glass wie ein Head-up-Display ins Sichtfeld einzuspiegeln. Gegenüber der früher eingesetzten Lösung, die Mitarbeiter über Darstellungen auf Computerbild-schirmen anzuleiten, bietet der AR-Ansatz Vorteile, meint An-gerer: „Die Lösung ist mobiler und durch die Sprachfähigkeit der Google-Brille hat das System einen Rückkanal.“ Noch aber sind viele Fragen offen, noch stoßen Anwender von VR und AR allzu häufig an die Grenzen der Technik. BMW-Experte Eckel beispielsweise kritisiert die für seine Zwecke immer noch be-scheidene Bildqualität. „Die begrenzte Auflösung ist schon ein Nachteil“, gibt er offen zu. „Das hochauflösende Videoformat 4K ist immer noch nicht serienverfügbar. Wir erwarten aber, dass sich hier bald etwas tut.“ Solche technischen Unzuläng-lichkeiten monieren auch die VR-User bei MAN. Die gegen-wärtige Cave ist auf die Verwendung relativ leichter, aktiver
Stereobrillen ausgelegt. Die in Gaming-Szenarios – und auch bei BMW – verwendeten schweren Head-mounted Displays (HMDs) wurden getestet und anschließend wieder weggelegt. Auflösung, Sichtfeld und Tragekomfort ließen zu wünschen übrig, so das Fazit der Testanwender.
Die eigentliche Problematik mit VR und AR liegt nach Auf-fassung des MAN-Fachmanns ohnehin woanders: In der man-gelnden Berücksichtigung psychischer Faktoren bei den Usern. Dass bei Verwendung von HMDs die realen Kollegen im selben Raum unsichtbar bleiben, erfordert zumindest einige Gewöh-nung. Auch dass viele Anwender bei Verwendung solcher Bril-len erst einmal mit einem gewissen körperlichen Unwohlsein ähnlich der Seekrankheit zu kämpfen haben, dürfte der Ak-zeptanz nicht unmittelbar zuträglich sein. Zudem beschrän-ken diese Faktoren VR-Sessions auf deutlich weniger als eine Stunde Dauer. Noch gravierender ist, dass die User dem VR-System noch nicht so intuitiv vertrauen wie ihren klassischen Mess- und Kontrollinstrumenten. Dieser Umstand erschwert es, die virtuelle Realität als echtes Werkzeug des Projektma-nagements anzunehmen. „Es ist eine Akzeptanzfrage“, sagt MAN-Teamleiter Raichl. „Man muss sich erst mal trauen, an-hand der virtuellen Darstellungen echte Entscheidungen zu treffen – auch wenn die Erfahrungen bei MAN klar zeigen, dass VR einen wertvollen Beitrag zum Frontloading erzielt.“
Autor: Christoph Hammerschmidt
Production focus: Many companies use augmented reality to train workers.
Winter 2017-201838
Silicon Valley isn’t the only high-tech cluster that wants to make its mark on the global automotive industry. Today’s technology start-up scene is spread across the world, with Bangalore, Berlin, Eindhoven, Shanghai, Suwon, Tel Aviv, Toronto and other regions all vying for a piece of the action. The Canadian province of Ontario is offering strong sup-port for industry and academia in its efforts to play a major role in the transformation of the auto industry.
WATERLOO, Ontario – Ontario is one of the biggest automotive regions in North America. In 2016, the Canadian province built 2,359,391 cars and trucks, according to IHS Markit. That’s more than any other US or Mexican state, even including Michigan, the heartland of the US auto industry. Fiat Chrysler, Ford, Gen-eral Motors, Honda and Toyota all have manufacturing plants in Ontario, while the province claims to have more than 700 parts suppliers. But the question faced by Ontario is no different from
Ontario commits to automotive high-tech cluster
Focus: Ontario
A former leather tanning factory from the 1850's houses Communitech and Velocity, two organizations playing a key role in fostering the start-up culture in Kitchener and adjacent Waterloo.
NEW TECHNOLOGY AND START-UPS
Winter 2017-2018 39
the challenges confronting every other auto-making region: How do you prepare your economy for the coming transforma-tion of the auto industry? Ontario’s answer lies in a close cooper-ation between industry, provincial government and universities. Jointly, they are working to get the region’s ecosystem ready for the new technologies that will define personal mobility.
The small university town of Waterloo, 100 km (160 miles) east of Ontario, is at the center of the Toronto-Waterloo innovation corridor. The region has 15,000 tech companies, 200,000 tech workers and more than 5,000 start-up companies. The corridor is at the core of Ontario’s IT industry, which is the second largest in North America, only bested by Silicon Valley. In and around Waterloo, technology companies such as Apple and Google operate R&D facilities, participate in the fostering of new busi-nesses and look for fresh talent. The city is home to Blackberry, whose QNX software powers connected functions in a multi-tude of car models. Waterloo and adjacent Kitchener have two organizations that offer start-ups a home during critical phases of their early growth. One is Communitech, founded in 1997 by a group of entrepreneurs to give start-ups a place to work in their very early days. GM runs a small innovation outpost with-in Communitech and there are various cooperation projects with other big firms. The other is Velocity, which claims to be the largest free start-up incubator in the world. Velocity, which is run by the University of Waterloo, doesn’t help start-ups on the ground floor, but offers them assistance at a slightly later stage. Its building in downtown Kitchener offers lab or work space, tools, meeting rooms, internet, access to a network of ad-visers and other services. “If you walk around Velocity, you can find almost anything you are looking for,” said Jean-Christophe Petkovich, CTO of embedded software company Acerta. “If you need help in a particular area or just need advice, you can find it from almost any industry.”
Academic underpinnings
The University of Waterloo plays a central role in the growth of the regional start-up cluster. The university, with more than 36,000 students enrolled, has a strong engineering depart-ment with a range of programs that are directly relevant to the auto industry. It also is home to a dedicated research institute that studies quantum computing, which is one day expected to play a major role in autonomous driving. And Waterloo’s Centre for Automotive Research (WatCAR) has a reputation fo cutting edge research in automotive growth areas such as connectivity, cybersecurity, artificial intelligence and auton-omous driving. But what’s arguably the university’s most im-portant contribution to the automotive start-up culture in On-tario is its advanced cooperative education program. The work experience program requires virtually all students to spend several months a year in a real work enviroinment. By the end of their studies, they will therefore have, on average, two years of work experience. The program is cited as one of the key reasons companies are attracted to the Waterloo region – and to its graduates. “The idea of work-integrated learning is really powerful and we run up to two dozen co-ops in our
center,” said Brian Tossan, who heads General Motors’ Canadi-an Technical Centre just north of Toronto. Added Ford Motor’s head of purchasing and product development, Hau Thai-Tang: “The University of Waterloo is really a hotbed in Ontario; it’s been a great source of talent for us.”
Other factors that support the greater Toronto region’s start-up cluster is a university policy to let students and researchers keep the intellectual property rights to their inventions. “The IP stays with the inventors, which is an incentive for start-ups,” said John McPhee, professor of systems design engineering at the University of Waterloo. Acerta’s Petkovich said he co-start-ed his company as a research project at Waterloo. “One reason the University of Waterloo is such a great place for start-ups is that it doesn’t hold on to intellectual property.” He added that this is a big incentive for students and researchers to start a business. Kurtis McBride, co-founder and CEO of Miovision also agreed that IP is important, but he noted that Canada still has work to do when it comes to helping entrepreneurs mon-
Powertrain tests are conducted at one of WatCAR's labs.
The University of Waterloo and city and regional authorities support office and lab facilities to help start-up companies develop new technologies.
NEW TECHNOLOGY AND START-UPS
Winter 2017-201840
etize their patents. McBride, who studied at Waterloo before founding his company, which makes traffic monitoring sys-tems, said other countries have a more comprehensive regula-tory and government procurement strategy to make domestic patents an industry standard. “It’s no accident that some coun-tries become ICT leaders,” he said.
Official support
Ontario is working on many fronts to boost innovation. The University of Toronto runs a so-called Creative Destruction Lab. Its goal is to foster new, disruptive technologies and businesss models. The CDL is a seed-stage program aimed at helping early-stage companies turn research projects into po-tentially viable businesses. It uses a mentoring approach, with a range of company executives providing expertise in regu-lar meetings. The Lab brings together start-ups with entre-preneurs, angel investors and potential providers of venture capital. Daniel Mulet, associate director, said one of his main challenges is attracting business people capable of judging projects. Many of them are located in Silicon Valley and that’s where their main focus is. He also said potential investors con-tinue to be discouraged by the relatively slow pace of devel-
opment in the automotive industry compared with other sec-tors. But Mulet said technology startups are attracting broad interest, also from the auto industry. Recent investments have come from carmakers including GM and Honda.
The broader mobility industry is also taking notice. The Lab started "a machine learning program" in 2015 and Uber an-nounced earlier this year that it would open a self-driving research facility in Toronto that would be run by Raquel Ur-tasun, an associate professor at the University of Toronto. “Toronto has emerged as an important hub of artificial in-telligence research, which is critical to the future of trans-portation,” Uber’s then-CEO, Travis Kalanick, said in a press release in May. Kalanick also said he hoped to draw from the “impressive talent pool” in the Toronto-Waterloo corridor. CDL sees opportunities for start-ups slightly farther down the road. “There are few new opportunities in today’s car technol-ogy,” said Mulet, “but early-stage companies can play a role in what can or will emerge.” The Ontario government also runs another program aimed at boosting innovation, the Ontario Centres of Excellence (OCE). Raed Kadri, director automotive technology and mobility innovation, said OCE aims to provide a bridge between industry and academia. “The change in the automotive supply chain is a huge opportunity,” he said, add-
Velocity, in downtown Kitchener, provides work space for young entrepreneurs in an open-plan setting.
NEW TECHNOLOGY AND START-UPS
Winter 2017-2018 41
ing that OCE is particularly focused on making sectors like the auto industry aware of relevant technology developments in other industries.
Autonomous vehicles have this year become a focus area for Ontario. In November, Ontario Premier Kathleen Wynne offi-cially opened a new autonomous vehicle demonstration zone in Stratford, 150 km west of Toronto. The track is part of the Autonomous Vehicle Innovation Network (AVIN) the province launched with OCE. AVIN also aims to provide better indus-try access to academic research, while offering fledgling tech companies opportunities in the auto industry. Wynne made clear that AVIN is key to the future of Ontario’s role in the auto industry. “We have an opportunity to make sure our province is a global leader in this revolution,” she said in a statement. The Ontario government is investing 80 million Canadian dollars in AVIN over the next five years.
Autotech
At an Autotech Symposium held at the University of Waterloo in October, companies from the region showed their resolve to play a key role in automotive industry transformation. “Inago’s goal is to build Knight Rider,” said Ron Di Carlantonio, CEO and founder of the company, which makes intuitive and intelli-gent voice control systems for cars. Knight Rider was a popular 1980s TV series featuring a car that could converse intelligent-ly with its driver, actor David Hasselhoff. Other speakers rep-resenting a broad range of small and medium-sized companies focused on some of the core issues facing the auto industry. Jean Le Bouthillier, senior vice president technology at Emrys Analytics, said a total redesign of vehicle architectures is over-due. “There’s lots of technology that hasn’t changed since the 1980s,” he said. “The IT environment is at a breaking point.” Emrys, a predictive analytics specialist based in Kitchener near Waterloo, sees cyber risk as the other major challenge facing carmakers. The company says a software and hardware suite to address these problems needs to offer at least a ro-bust automotive operating system connected to an in-vehicle
Brad Duguid is minister of econo-mic development and growth for the Canadian province of Ontario. In this capacity, he plays an im-portant role in helping the regional automotive industry stay compe-titive. Duguid recently spoke to automotiveIT International at the Ontario Parliament offices in Toronto.
automotiveIT: How do you assess the sweeping chan-ges in the auto industry today?Duguid: I believe automotive companies recognize this is a very difficult time and they are going to have no choice but to be extremely nimble in the years ahead. If they don’t, they will see themselves become a thing of the past. It’s always difficult for large organizations in disruptive en-vironments to become dramatically innovative. That’s why I believe consumers, rather than companies, will lead the change. The connected car is led by an insatiable desire of consumers to have the new technology in their cars. Consumers aren’t quite ready in North America for clean cars, but once they are, they’ll be ready en masse.
The electric vehicle revolution is, indeed, slow to take off in North America.I think the trigger is reducing range anxiety. What’s needed is a charging-station infrastructure. And then consumers need to be educated. A second trigger is convenience. It’s very challenging to ask people to do something that is not convenient. An example is when it takes half an hour to charge a car.
How do you ensure that Ontario's automotive start-up culture is competitive with Silicon Valley and other high-tech clusters? I actually like where we are compared with Silicon Valley. It all comes down to one thing: talent. We are today produ-cing what is considered the best and most sought-after ta-lent in North America. That’s because we have embedded in our education system a culture of entrepreneurialism. And we’re leading the world with experiential learning.
Start-up cultures require a willingness to take risks. Is that willingness there in Ontario?Ten years ago it wasn’t. We were relatively conventional and conservative and that served us well and helped us weather global recessions well. But in today’s economy, that approach is not going to cut it. That’s why 12 years ago we launched an innovation agenda that transformed our talent pipeline. The agenda helped insert an element of entrepreneurial thinking and a commitment to innovation.
Interview by Arjen Bongard
Interview: Brad Duguid
NEW TECHNOLOGY AND START-UPS
Canadian senators Pierre Boisvenu (l), Dennis Watson and Art Eggleton (r) try out an autonomous test vehicle from the Waterloo Centre for Automotive Research.
Winter 2017-201842
ethernet network. Optional would be an infotainment inter-face connected via hypervisor technology, situational analysis and sensors attached to the operating system, and a car data management system. Waterloo-based Isara is one of the few companies specifically addressing automotive security risks resulting from the greater power that will come with quantum computing. “Quantum computing will break today’s public key encryption standards,” warned Paul Lucier, vice president of the Waterloo-based company. Isara offers software that de-ploys quantum-safe cryptography. Jim Alfred, general manag-er at Blackberry’s Certicom subsidiary, agreed that cyber secu-rity is a major challenge for tomorrow’s cars, but he also noted that the IT and communications industries can use experience gained in other environments. “Security problems and threats are real,” he said, “but we’ve seen them before in networks and mobile devices and these are problems we can solve.”
By Arjen Bongard
Photos: University of Waterloo, Arjen Bongard
Brian Tossan heads General Motors’ new Canadian Technical Centre in Markham north of Toron-to. The 150,000 square foot facility develops new autonomous vehicle software and controls, active safety and vehicle dynamics systems, infotainment and connected vehicle technologies. The Canadian outpost, located less than 250 miles (400 km) from GM’s headquarters in Detroit, is a high-tech hotspot that is looking to grow. Tossan spoke to auto-motiveIT International about Canada’s auto industry and the way GM taps into Ontario’s start-up culture.
First of all, why is GM here?We’re here to take advantage of a very rich ecosystem, particularly in the Toronto-Kitchener-Waterloo corridor. It’s a very talent-rich area that is very pro-innovation and it has some of the leading universities. We’re part of a very den-se information and communication ecosystem with almost 400 ICT firms just in this region north of Toronto. There’s a lot of start-up activity, which allows us to establish some amazing collaborations and there’s a mature industry here as well, with a lot of software talent available.
What is your focus here in Markham?Our growth mandate focuses on three areas: First, connec-ted vehicle technology and the development and design of next-generation infotainment systems. Second, advanced active safety and vehicle dynamics. And third, software diagnostics in the autonomous space.
How do you decide what you do yourself and what you outsource?We make an inventory of what’s available in the ecosys-tem. Then we look at where we have mutually aligned objectives and then, natural partnerships tend to occur.
The co-op system, which allows engineering students each year to spend a relatively long stretch in a real work environment, is generally seen as a big driver of talent here. Do you participate in the scheme?Work-integrated learning is really powerful and we are very much engaged in the Canadian university co-op system. We run up to two dozen co-ops in our center and we expect that to grow. We don’t just see the co-op system as a great opportunity to develop talent, but often also as a tremendous opportunity to innovate. We also sponsor collegiate competitions where we challenge students to undertake various tasks. We get a tremendous return on investment from .
Interview by Arjen Bongard
NEW TECHNOLOGY AND START-UPS
Four questions for GM's Brian Tossan
For more news on Ontario’s automotive start-up cluster and longer versions of the interviews with Brian Tossan and Brad Duguid, please go to www.automotiveIT.com
Waterloo University wants to be a leader in autonomous vehicle research.
GM's Canadian Technical Centre, located in Markham north of Toronto, is looking to add software engineers. Many of them will come from area universities.
Winter 2017-2018 43
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DIGITALIZATION STRATEGY
T he auto industry has increasingly chosen the Las Ve-gas-based CES high-tech exhibition to showcase its
advances in technology and its progress in making the car part of the Internet of Things (IoT). CES, which starts with a couple of press days January 8 and 9, will again feature a strong automotive presence. All the major brands, most of the world's biggest automotive suppliers and a smattering of new specialist car companies will be present and several plan key announcements. Automotive companies will likely use the Las Vegas show to focus attention on the evolving nature of their digital-innovation efforts. "There will be a much more broad-based focus on automotive and mobility applications," predict-ed Christoph Stuermer, global lead analyst at consultants and market researchers PwC Autofacts. He added that he expects automotive companies and IT service providers to the indus-try to focus more on the growing service infrastructure that is being developed around the car. And there will likely be a
greater focus on applications, many of them using artificial intelligence (AI). "Up to now, the automotive presence at CES has been quite hardware-oriented," Stuermer said, "but I ex-pect this year to see more news on the software side."
CES traditionally features one or more major automotive key-note addresses. In 2018, Ford Motor CEO Jim Hackett will talk about the mobility business the carmaker is developing as part of its drive to broaden its operations. The changing face of personal mobility will also be addressed by Lyft President and Co-Founder John Zimmer, who, according to the US Consum-er Technology Association (CTA), which organizes CES, will talk about "America’s third transportation revolution and how the upcoming shift from car ownership to transportation as a service will shape the future of our cities and communities." He also will discuss what new mobility schemes will mean for US car ownership and how they may change the way cities are
Digitalization and connectivity will again be central themes at the Las Vegas consumer electronics
exhibition and the Detroit Auto Show, which kick off the new year in January.
New technologyPreview: CES & NAIAS
set agenda for 2018
Winter 2017-2018 45
DIGITALIZATION STRATEGY
built. Lyft is one of the early-ride sharing companies in North America. In 2016, GM invested 500 million dollars in Lyft.
Detroit
The Detroit Auto Show, officially called the North American International Auto Show (NAIAS) starts with AutoMobili-D on Sunday, January 14. The exhibition, like the show, is located in Cobo Hall in downtown Detroit, features displays by start-ups and other tech companies as well as a program of keynote addresses. AutoMobili-D also is teaming up with the Michigan Economic Development Corporation (MEDC) to launch the PlanetM awards, a competition that will acknowledge compa-nies that have a strong impact on the mobility industry. Awards will be given in the areas of autonomous driving, connected car, electric mobility, mobility services and smart cities. The Detroit show, the biggest in North America, will continue to serve as a platform for new model launches in 2018, despite the automotive presence at CES and exhibitions such as Bar-celona’s Mobile World Congress. PwC's Stuermer said there is a role for product-focused auto shows, even in an era where consumer attention is shifting to connectivity features and the sharing of vehicles. Said the PwC analyst: "At CES, you want to show off your technology, your next-level interfaces and appli-cations, and your integration with other types of technology, while in Detroit you want to show the metal."
By Arjen Bongard At CES 2017, ZF presented a truck concept featuring its latest technology.
The 2017 Detroit Auto Show featured various virtual reality implementations (Photos: Arjen Bongard)
Winter 2017-201846
NEW TECHNOLOGY
T he Volkswagen plan, named “Roadmap E,” calls for direct investments of more than 20 billion euros in technologies
to put an electrified fleet on the road. Included are plans for two entirely new electric platforms, upgraded plants, a charging infrastructure and battery technology and production. And VW Group brands will bring 80 new electric vehicles to mar-ket by 2025. The world’s largest automaker by unit sales isn’t the only player to step up its electrification efforts. In recent months, virtually all major car brands have announced plans that, more often than not, are only slightly less ambitious than Volkswagen’s. The accelerating focus on battery technology marks a growing belief in the industry that the tide is turning for a powertrain that has been slow to gain traction in recent years. Part of the reason for that is Volkswagen’s manipulation
of diesel emission tests, which has raised public awareness of the pollutants generated by diesel engines. Following revela-tions that diesel emissions in many cases contain much higher quantities of poisonous nitrogen oxide (Nox) than previously thought, many major cities have been moving to ban the pow-ertrain from future car sales altogether. As a result, many po-tential car buyers are taking a fresh look at EVs. Another major reason for the growing popularity of electric vehicles is their technical improvements. The current and next EV generations will have driving ranges of 400 km or more. And in the not too distant future, 600 km will be possible. At the same time, automakers believe they will have to offer the cars at a com-petitive price and most will do so. “The discussion is moving away from range to how much range you get per euro,” said
VW electrifiesIndustrywide EV push intensifies
On the eve of this year’s Frankfurt Auto Show, Volkswagen Group unveiled a new strategy to
drive electrification across its model range and make sure it has access to the batteries needed
to power its cars. VW and other brands are stepping up their electric-vehicle investments amid
signs of fresh market momentum.
Electricmobility
At the Los Angeles Auto Show VW presented three electric show cars, all members of its new I.D range.
The cars are based on an architecture designed for electric drive systems.
Winter 2017-2018 47
NEW TECHNOLOGY
Thomas Hausch, who, until recently, headed Nissan sales in Europe’s biggest car market, Germany. C-segment EVs such as the Nissan Leaf, the Hyundai Ioniq and VW’s e-Golf all offer good value for money and the kind of total cost of ownership that’s comparable to having a traditional car, Hausch said.
Industrywide trend
Volkswagen Group went all out at the Frankfurt show to demonstrate its commitment to electric mobility. CEO Matthi-as Mueller, eager to give the carmaker a new focus away from the diesel scandal, wants electrification to be at the center of all of the company’s efforts. Roadmap E “is not some vague declaration of intent,” he said in Frankfurt. “It is a strong self-commitment which, from today, becomes the yardstick by which we measure our performance.”
The stronger focus on electrification is picking up speed across the industry.
· Just in November, premium carmaker BMW announced a new competence center for battery cells near its Munich headquarters. The company, which plans to invest 200 mil-lion euros in the project over the next four years, said the commitment doesn’t mean it will actually produce battery cells itself. “By producing battery-cell prototypes, we can analyse and fully understand the cell’s value-creation pro-cesses,” said BMW’s head of manufacturing, Oliver Zipse. “The knowledge we gain is very important to us, regardless of whether we produce the battery cells ourselves, or not.” BMW wants to launch 20 new all-electric vehicles by 2023.
· This summer, Volvo Cars, a subsidiary of China’s Geely, announced that, from 2019, every new Volvo car will have an electric motor on board. “People increasingly demand electrified cars and we want to respond to our customers’
current and future needs,” Volvo CEO Hakan Samuelsson said in July. The Swedish brand, together with its new Pole-star performance unit, plans to launch five fully electric cars between 2019 and 2021.
· Daimler’s Mercedes-Benz also plans a big push. “”We will electrify the entire Mercedes lineup by 2022,” Daimler CEO Dieter Zetsche said at the IAA. He pledged “at least one electrified alternative” in each Mercedes model range. That means a line-up of more than 50 electrified model variants by 2022..
· US carmaker General Motors also recently provided fresh insights into its EV strategy. “General Motors believes in an all-electric future,” said Mark Reuss, GM’s executive vice president of product development, purchasing and supply chain. In the next 18 months, the carmaker plans to unveil two new all-electric vehicles that are part of a 20-car EV roadmap through 2023.
· Ford Motor recently unveiled a high-powered hybrid police car that is the second of 13 new EVs it plans to in-troduce over the next five years. Ford has earmarked 4.5 billion dollars for improving EV technology. “Electrifying our next generation of vehicles is core to our unwavering commitment to sustainability,” Joe Hinrichs, president of Ford’s Americas operations, said in April.
· Renault-Nissan, together with new partner Mitsubishi, sold a market-leading 424,797 EVs in 2016. The alliance, which recently announced a cooperation with partner Dongfeng to build EVs for the Chinese market, plans to launch 12 models with electric powertrains through 2022.
At the Volkswagen brand, Christian Senger, the executive in charge of electrification, has developed a strategy that takes into account the cars’ performance, the business model, the
Honda unveiled an electric sports car concept at the 2017 Tokyo Auto Show. The Japanese carmaker said the show car features electric vehicle performance combined with artificial intelligence.
Winter 2017-201848
NEW TECHNOLOGY
marketing and the barriers that continue to exist, specifical-ly the continued absence of a viable EV charging infrastruc-ture. In an interview with automotiveIT at the Frankfurt Auto Show, Senger said so-called range anxiety will abate with the next generation of electric cars. These can travel 300 to 400 km on a charge. “That covers what a normal person will drive in a week,” he said. The new I.D. Crozz, which VW showed in Frankfurt, will even manage up to 600 km in future. Senger acknowledged that longer-distance driving continues to be a challenge, but this is being addressed in Europe by a joint venture with BMW, Daimler and Ford that is building 400 ul-tra-fast charging stations across the continent. “The venture is on its way,” Senger said. “We are acquiring properties, have defined the technology and have the first prototypes ready.” Senger said the joint venture is now deciding how many char-ger are needed. One thing’s for sure, he said: “There will be more than Tesla and they won’t be proprietary.” Tesla runs its own network of superchargers, but only Tesla models can use them.
Despite the new electric push across the industry with new models, higher range, more chargers and competitive pricing, most experts say it will be a while before EVs make a sizable dent in a market dominated by combustion-engine-powered cars. Christoph Stuermer, global lead analyst at PwC Aut-ofacts, said the push to rapidly introduce electric vehicles without sufficient charging infrastructure is problematic. “ We’re introducing smartphones, but don’t yet have a wireless network,” he said. PwC projects that EVs will become price competitive with combustion-engine powered cars by the mid 2020’s and that, by 2030, they will make up a sizable part of new-car sales. But, with most cars lasting 10-20 years or longer, the global car parc will be dominated by gasoline and diesel-powered vehicles for a long time.
By Arjen Bongard
Photos: VW, Honda, BMW
The VW Group plans 80 new electrified vehicles, of which 23 will be VWs. Are we talking about a combination of hybrids and full battery-electric cars?When we’re talking about the 2025-2030 period, there are still some things that are not fully decided. In the medium term we will also need plug-ins and hybrids, but when we go into big volume production, I think the only real value for the customer is a pure electric vehicle.
How are you planning to address the charging infra-structure requirement?Building cars with a bigger range comes first. The first e-Golf had a range of 190 km; now it has 300 km. The I.D. Crozz will start with a range of 400 km and we will offer a range of up to 600 km. We’re also planning a very affordable offer to instal a home-charging unit. We’re working in a joint venture (with Daimler, BMW and Ford) to build a fast-charging network across Europe.
Where does the fuel cell fit into your electrification plans?We’ve made a lot of progress with the technology, but we don’t yet have the charging infrastructure. It’s also very tough to explain all the different powertrains to people. We already ask a lot with gasoline, diesel, electric and natural gas. In the medium term, we’re focusing on jumping into pure electric mobility. There could be a place for fuel cells in the commercial vehicle area, because of their fast charging ability. On the passenger car side, the biggest competitor for fuel cells is the continuing improvement in battery technology.
Three questions for VW electrification chief Christian Senger
BMW's electric i3 models now come with a greater driving range. And German press reports say even greater battery capacity will provide a range of around 400 km in 2018.
Winter 2017-2018 49
The disruption created by the automotive IT revolution was apparent at this year's Los Angeles Auto Show and it was sometimes hard to tell who was a carmaker, a tech compa-ny or an entertainment firm. But amid the corporate cross dressing, some of the leading players offered fresh insights into how they hope to make money in an era of new mobility.
BMW CEO Harald Krueger sounded very much like a tech exec-utive, stating, “as is usual in the IT sector, we expand features in rapid cycles.” With the integration of Amazon’s Alexa and Google Assistant into its vehicles, BMW is “working hard to de-liver the seamless integration of the user’s digital lifestyle.” But then, to dispel any notion that BMW is putting tech over per-formance, he went on to introduce the BMW i8 plug-in hybrid sports coupe, complete with gull wings and acceleration to 60 mph in 4.2 seconds. Brian Krzanich, CEO of Intel, on the other hand, sounded very much like a car company executive, stat-ing that “many people are talking about autonomous driving, but we’re one of the only ones building autonomous driving.” Intel will start road-testing its technology with a fleet of 100 cars next year, Krzanich said, but just when he was starting to sound like General Motors, he also announced a partnership with Warner Bros. to explore how to integrate Warner's movies, games and TV shows into the self-driving car. The vision goes beyond making calls or watching a movie in an autonomous ve-hicle, to creating a fully immersive virtual reality experience. Earlier this year, Intel funded a study that found the self-driv-ing car industry will be worth 7 trillion dollars by 2050, largely driven by enhanced passenger experiences.
Waymo
Given the amount of attention Waymo’s growing fleet of au-tonomous vehicles has been getting, it would be easy to think that the Alphabet-backed company was planning to be the next Tesla. But when Waymo CEO John Krafcik took to the stage he quickly quashed the notion, stating, “We are really not a car company.” With the help of its autonomous driving platform, Waymo wants to create “the world’s most experienced driver,” he said. Krafcik for the first time outlined in some detail how Waymo plans to make money off autonomy. First, it will launch its transportation service over the next few months. Next, it will enter the logistics sector, applying the sensory technology de-veloped in transportation services to large trucks. But the big-gest opportunity will be selling the technology to automakers as well as to cities interested in applying autonomy to the last mile of their transportation infrastructure, Krafcik said. Volvo Cars, meanwhile, is looking to make money by adopting an approach more akin to the cellular phone business. Because buying a car is “not pleasant, complicated, and lacks transparency,” Anders Gustafsson, CEO of Volvo Car USA, presented a new subscrip-tion product called “Care by Volvo.” Acquiring the service will
be “like buying a cell phone,” he said. The system is already being rolled out by Lynk & Co, a new car brand owned by Chi-na-based Geely, which also owns Volvo. Under the program, customers can go online and in 10 minutes gain ownership of a new Volvo for as little as 600 dollars a month, with no down payment. The customer receives a 15,000 annual mile allow-ance with a 24-month subscription, with insurance thrown in at a flat rate. And like with a cell phone, you can upgrade to a new car after 12 months.
Semi-autonomous future
Toyota took a more conservative approach in its presentation at the LA Auto Show, and by doing so probably described the clear-est route to large-scale marketing of its autonomous driving technology. That is, that the focus should be on getting semi-au-tonomous cars on the roads rather than on the deployment of full autonomy. Gill Pratt, CEO of the Toyota Research Institute (TRI), can draw on roughly 1 billion dollars in funding from parent Toyota to push forward work on artificial intelligence, robotics and advanced materials. But rather than focus on pure autonomy, he highlighted the benefits of his company’s more modest “Guardian” system, which employs a series of partial au-tonomy features designed to avoid crashes. In Pratt’s view, full autonomy remains fraught with problems, such as insurance liability, regulatory hurdles, and inherent human uneasiness over trusting your life to a machine, even when the machine is the better driver. Simply put, autonomous vehicles need to be perfect. “If autonomous cars ever crash, it’s catastrophic from a business point of view,” Pratt said. And it will be years before au-tonomous cars can be perfect. Semi autonomy can start saving lives earlier than full autonomy, Pratt said. “The near-term solu-tion that carmakers should be aiming at is the banding together the competence of humans and machines.”
By Jason Booth
CAR IT
The LA Auto Show
BMW revealed new versions of its i8 electric sports car at the show (Photo: BMW).
Tech meets automotive
Winter 2017-201850
DECISION MAKERS
At BMW, the official retirement age for top managers is 60, which partly explains why Ian Robertson, the group’s youthful, 59 year-old management board member for sales and marketing, is retiring after 38 years in the automotive industry. Since 2008, Robertson has been the lone Briton on the board of the German premium car group. He’s re-turning to the UK in early 2018 and will be succeeded in Munich by Pieter Nota, a senior executive at Dutch elec-tronics group Philips.
Looking back at his career, which took him by way of Rover to BMW, Richardson sees an automotive landscape that is chang-ing much more rapidly than ever before. “The structure of the industry continued to improve for more than 100 years, but it was pretty much the same,” he said in an interview at BMW
headquarters in Munich. “In the last 10 years, though, some new elements have been introduced.” These include new man-ufacturing and engineering processes, different ways for cars to come to market and the arrival of new players, especially in the supplier commmunity. “In the past you had to be a big play-er to be a tier one component supplier. Now, you can be a start-up with smart bits of kit, many of them digitally oriented.” Op-portunities for companies making high-tech components “are greater than ever before.” Those possibilities are also there for aspiring new auto brands and Robertson cites two key reasons. First, because the auto industry is a mature industry, newcom-ers literally don’t have to reinvent the wheel. Robertson notes that Tesla, for example, borrowed ideas and parts from more established automotive companies to build its own cars. And it benefited from an early partnership with Daimler. “The Daim-
»Don’t write off the experience world«
Ian Robertson, departing BMW sales boss:
Winter 2017-2018 51
DECISION MAKERS
ler investment gave Tesla access to a range of components,” he said. The second reason is the relative simplicity of the electric motors that are likely to replace combustion engines in coming decades. “The complexity of a combustion engine vehicle is far higher,” Robertson said.
The departing sales chief sees other changes redefining the industry, in particular in manufacturing. For one, the struc-ture of the average car is evolving from the traditional tem-plate. Steel is being replaced by carbon fiber, like in BMW’s i3 and i8 models. Paintshop requirements are changing as well as more self-colored components go into vehicles. And, on the commercial strategy side, the need to develop new business models such as the group’s DriveNow car sharing service is bringing car companies into much closer, direct contact with their customers. “We’re in for more change than we’ve seen in 100 years in all aspects of our business,” Robertson said.
The digital world
Before he moved to Munich in 2008, Robertson spent four years at the head of BMW’s Rolls-Royce luxury brand. Earlier, he was managing director of BMW South Africa. In the 1990s, before BMW bought Rover in 1994, he headed Land Rover Vehicles. Robertson, thus, has almost 25 years of experience with the sale and marketing of a broad variety of vehicles. Like the rest of the automotive value chain, the commercial side of the business also is undergoing a deep transformation, he says. The biggest change is people’s advance knowledge, gained online before they enter the showroom. “The customer knows exactly what he wants and what price he wants to pay.” But fewer visits to the showroom, which is a fact throughout the industry, doesn’t mean the physical experience of seeing, touching and test-driving a car is a thing of the past. “It’s a multi-channel environment where people may spend most of their time in the digital world, then come to touch, feel and drive in the physical world and then go back into the digital world. When you spend 50,000 or 100,000 euros on a car, the experience world still has a lot to offer.” Auto shows will con-tinue to play their part in showing real-world automobiles to
drivers and others interested in personal mobility. But Robert-son believes that, with competition from consumer electron-ics events heating up, auto shows will move away from static car displays and have more action on the stands. BMW has for years built a driving track for itself at the Frankfurt Auto Show and, this year, it added a show that ran at least once an hour. “There’s room for auto shows, but only if they make direct con-tact with the customers,” Robertson said. “Shows that move in that direction will survive and those that don’t will fall off the agenda.”
No golf
The retiring BMW executive looks back on his almost four de-cades in the car business with appreciation for the dynamism that characterizes the industry. “There’s never been a dull day and if you expect periods of stability, you’re in the wrong indus-try,” he said. “This industry is probably the most competitve in the world; it is brutal, it has unexpected interference from reg-ulators, customers, governments and local politicians. That’s what makes it so much fun.” He refuses to identify low points in his career, saying instead that many of the challenges he faced on the way prepared him better for future tasks. “Not all days were happy, but you learn and develop and get strong and improve. If you don’t have challenges, you don’t improve.” Looking ahead, Robertson says no one knows what cars and the auto industry will look like in 30 or 40 years. “The trend to zero emissions has been on the cards for quite some time, but nobody knows what the final outcome will be,” he said. “The level of uncertainty grows, the further out you look.” He gives the example of the time he was purchasing director at the Rov-er Group in the early 1990’s and went to supplier Robert Bosch to buy anti-lock brakes. “I thought we were getting into the top end there, but 10 years later they were already in every car.” Another example of the speed at which new technologies become mainstream: Self parking systems, which BMW intro-duced in 2010. These started showing up in much smaller vol-ume cars less than two years later. Said Robertson: “We know that, over the next 30 years, cars will develop, but we don’t know what will power them.”
Once he leaves the BMW board in January, Robertson will con-tinue to work for the carmaker for another six months before officially retiring in June. In his final months at BMW he will advise the company on a range of issues related to Britain’s planned departure from the European Union and the impact of that move on the carmaker. BMW builds Mini models in the UK and owns Rolls-Royce Motor Cars. In 2016, the group sold 251,577 BMW and Mini vehicles in the UK, making it one of its biggest national markets. Once Robertson officially retires, he expects to take on a few more board assignments and may well tackle a new project. One thing’s for sure, he says: “I won’t just sit at home and play golf.”
By Arjen Bongard
Photos: BMWDuring his years as head of BMW's South African opera-tions, Ian Robertson meets with Nelson Mandela.
Winter 2017-201852
NEW TECHNOLOGY
E lon Reeve Musk is a mover and shaker. When the auto in-dustry couldn’t figure out this electric mobility thing, he
took the matter in hand. He founded Tesla Motors and built a battery factory as well. When NASA could not get rolling on a manned mission to Mars, the South African self-made man started SpaceX to move the idea forward. If you are worth 17 bil-lion dollars, you have what it takes to give things a push. Musk is a child of the new economy. As an Internet pioneer and investor, he is accustomed to fast-moving developments. It is hard for him to accept the experience of physical gridlock in an age of lightning-fast data transfers. It wasn’t just the traf-fic jams on the highway south of San Francisco that were so irri-tating. Musk found it hard to accept that there was no apparent alternative.
Musk, whose shoot-from-the-hip tweets are only surpassed by those of the US president, proudly announced in July that he had verbal approval for a subterranean hyperloop line from New York to Washington, D.C. At the time, as The Guardian uncovered, the responsible authorities didn’t even know that they had granted an approval. Speed of execution is part of the genetic code of the current generation of Silicon Valley entrepreneurs. And their approach to business often clashes with the way things are traditionally done. For example, Cali-fornia’s government has, for the past 10 years, been planning a high-speed train link connecting Sacramento, the state capi-tal, to San Diego, almost on the Mexican border. This would al-low the chronically clogged horror of Los Angeles to be quick-ly traversed. It would connect cities that are generally too far
Internet billionaire Elon Musk would like the hyperloop to revolutionize transportation. The race
is on to see whether the cross between a maglev train and a tube mail system will someday
carry passengers at the speed of sound. Or whether it is just hot air.
A hyper leap forward – or death in a tube?
Winter 2017-2018 53
NEW TECHNOLOGY
apart to drive but almost too close for air travel. Musk could likely live with a maximum travel speed of about 400 km/h but not with the timeline for the project’s completion. The first section is supposed to be finished in 2025, the entire route in 2030. The cost: at least 40 billion dollars, but more likely 70 billion dollars when all is said and done.
Carnival ride
On a good day, the 800-km route from Sacramento to San Di-ego can be covered in eight hours. An airplane takes 1.5 hours to travel from the California’s northernmost metropolis to its southernmost. A conventional Amtrak train with a diesel lo-comotive takes 12 hours for just the 600-km stretch between Oakland and Los Angeles. Musk wants to do it in a half-hour. He has a long way to go, however, and parallels with earlier ambitious transportation projects abound. Today only a tiny test track remains from a hyperloop project jump-started in 2013. In May 2016, the company sent a sled with electric drive over 900-meter track without a vacuum tunnel. The light aux-iliary rail vehicle accelerated to 190 km/h in 1.9 seconds. It was hardly a great breakthrough; it was more of an effort to show the public something tangible. The first section of tube was completed in Nevada in May 2017. Hyperloop One talks about its first “major test.” Three prototypes from different scientific institutes competed, and the fastest traveled for five seconds and hit a speed of 112 km/h, exactly a tenth of what is envisioned. The roughly three-ton capsules are supposed to speed through tubes about three meters wide at roughly 1,125 km per hour. The projectiles do not have to break through the sound barrier since the air pressure in the tunnel is only about 100 pascals, or a thousandth of normal air pressure. The bed is on stilts to save space. This is supposed to keep the cost of land acquisition down, which has been the main financial burden for a Californian railway project known as CAHSR. To keep things simple, Musk would like to proceed even more inexpensively and with even less effort by sending the route over the center strip of Interstate 5. From an environmental standpoint, the hyperloop is not only designed to speed its pas-sengers invisibly and soundlessly along the US West Coast. It is designed to be emission-free as well. The energy to pump out the air and drive the capsules is supposed to come from solar panels mounted on the tube itself. Musk expects that energy
surpluses could even be generated since the drive system oper-ates extremely economically. The kind of conventional linear motors common in industry constantly reverse polarity and produce magnetic forces that drive the vehicle forward with attraction in front and repulsion at the rear.
The braking is also electric, and there is an extra wheel drive for emergencies. The principle is the same as the magnetic levitation train Transrapid, but almost without air resistance. The Transrapid locomotive, which can weigh between 16 and 26 tons depending on its function, glides on a thin cushion of compressed air to minimize friction. The cushion is a maxi-mum of 1.3 mm thick. Presented four years ago, the concept promises trips faster than air travel on routes of up to 1,500 km and at prices less than the cost of a train ticket. The capsule is expected to carry up to 28 passengers, and the term “cap-sule” reveals that the trip is somehow more like space travel than a normal trip. The aluminum structure is expected to be 1.35 meters wide and 1.1 meter high. By comparison, the very narrow Apollo 11 lunar module was nearly three times as spacious with a diameter of 3.91 meters. As in a rocket, the passengers are buckled into a nearly recumbent position and then shot into the darkness. Critics complain that this doesn’t quite seem like relaxed travel. But with the trip’s brevity and its spectacular speed, the customer might have to view it more like a carnival ride. If you undergo a computer tomography brain scan, you have to spend just as much time in an even narrower tube as you would on a trip from Stuttgart to Frank-furt (15 minutes). If you travel by hyperloop from Munich to Nuremberg it should take 12 minutes for the 170 km stretch, compared with a little over an hour with Germany’s high-speed trains today.
Major obstacles
The plans for a European project are already complete. A near-ly 2,000-km ring road is supposed to connect Germany’s most important cities. A roundtrip won’t even take 2.5 hours. It is called the “Vision for Europe” at Hyperloop One. There are major plans for a north-south connection in the United King-dom, and another circular course through the Netherlands. The Baltic cities of Helsinki, Stockholm and Tallinn virtually become one urban zone. The Baltic Sea, which separates Fin-
Winter 2017-201854
land, Sweden and Estonia, dwindles into a puddle between two streetcar stops., Naturally, the line can’t run on stilts there. An undersea tunnel could handle it, though. Musk has already formed a tunnel boring company and acquired a tun-nel boring machine, which is now due to be dismantled and checked for opportunities to make improvements. The “warp speed” of transportation certainly bears the signature of the start-up billionaire.
But major obstacles stand in the way of the hyperloop idea. Musk’s route doesn’t enter metropolises as the route of the California railway does, but merely goes by them like an au-tobahn. There are indeed plans for shock absorber systems in the pylons, but experts doubt their safety in the event of earth-quakes. What happens when a truck driver loses control on the highway and collides with one of them? In an emergency, how can you brake capsules propelled through the tube at mach 1? At roughly 1,000 km/h, the braking distance would be much like that of an ocean liner, about 2 km. How could the occu-pants leave the tube if there were a defect or accident? What happens if a fire breaks out? Even without breakdowns and accidents, there are still fundamental questions such as: How will the oxygen supply be secured for the occupants in all sit-uations? How will the enormous heat generated by the drive system be dissipated from the tube? Then there are the esti-mated travel times and the cost projection of 7 billion dollars at most. Many critics consider Musk’s estimates to be sugar-coated or just plain unrealistic. Some look at the great vision-ary’s scant interest in investing his own money in the project and conclude that the risks are too great for his taste. The fi-nancing is supposed to be secured from investors using crowd-funding, and the technology divided up and further developed
much as open source software would be. A total of 27 teams were allowed to present their concept to Musk, and three were invited to the trials.
Yet it would be premature to dismiss the hyperloop idea as the fantasy of a bored oligarch. After all, this is no competi-tion for nerds or garage tinkerers. A team from the Technical University of Munich is currently out in front. Its capsule was the fastest in the test run. But the team members aren’t closing their eyes to the technical obstacles. “Learning by doing” is the philosophy at the Scientific Working Group for Rocket Tech-nology and Space Flight (WARR). One of its financial backers is the aviation giant Airbus. There are other major names in play as well: Lufthansa is interested in the hyperloop; it wants to know whether Germany’s domestic air routes could be re-placed. The airline has reached an agreement on a study with a Hyperloop One rival, Hyperloop Transport Technologies (HTT). An official request has come from Slovakia to deter-mine whether Hyperloop One might be able to link Bratislava with the Czech capital Prague. In the United Arab Emirates, people are interested in shortening the two-hour freeway trip from Dubai to Abu Dhabi. The sheikhs definitely would have the petty cash to carry out a project. If hyperloops prove to be workable, the Emirates would likely be the top choice for one. Beside the Munich-based WARR group and the Technical Uni-versity Delft in the Netherlands, one of the top addresses in the science community is in the race to develop the best technolo-gy: the Massachusetts Institute of Technology.
By Markus Stier
Photos: Hyperloop
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Winter 2017-2018 55
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In 2018, the automotive industry will focus even more directly on new business models, autonomous driving, enhanced connectivity and the efficiency improvements that come from innovation across the entire value chain. And underpinning it all will be a number of hot new in-formation technologies that are transforming industrial processes as we know them.
Artificial intelligence (AI) and blockchain are quickly becom-ing core themes in the digitalization discussion. Both are like-ly to penetrate every area of companies’ operation as digital transformation picks up pace. Three-quarters of automotive companies have an expansion of their digitalization on the agenda for 2018, according to the latest IT Trends study from consultants Capgemini. But that doesn’t mean there’s strong
Trends 2018AI, blockchain lead the way in IT innovation
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IT TRENDS 2018
progress across the board. “All have set out on this path. No one has yet arrived,” summed up Rainer Mehl, a digital and automotive expert at Capgemini. That is why many of the top issues from the last two years are still top issues today. They include topics such as digital twins and the continuing efforts to make companies and IT departments more agile. There’s clearly progress on that front, said Gabriel Seiberth, manag-ing director of Accenture’s automotive division. “We are seeing many attempts to break out of the classic structures.”
Artificial intelligence
Along with deep learning, machine-learning, image and speech recognition, artificial intelligence tops the list of im-portant IT trends for 2018 and beyond. So far, AI implemen-tation is still in its infancy, but experts expect it to penetrate every field and revolutionize processes, apps, data analysis and security. AI will even give a push to immersive technolo-gies such as virtual and augmented reality. In a survey, market researchers Gartner found that 59 percent of companies now collect information specifically to bolster AI strategies. “Arti-ficial intelligence is making inroads in vehicles, manufactur-ing and logistics,” Seiberth said. “This will have a clear impact on classic IT departments.” The Accenture consultant sees a learning phase in this area in 2018, both for IT departments and service providers. In many areas, he said, prototypes have been created to see how processes can be optimized with ro-botics. “The next revolution in efficiency is ahead,” he said.
All automakers are experimenting with AI as, arguably the best approach to making autonomous driving work. But AI also is considered in other areas. Practically every car compa-ny is currently working on systems to handle interactive voice responses in vehicles, mostly based on Nuance technology. More of this will be seen in 2018. Manufacturing also is an area where AI implementations will have an impact. Gerard Richter, senior partner and digital manager at McKinsey Ger-many, said it will boost human-machine cooperation and col-laboration between robots. And it will affect supporting pro-cesses. “The trend of the millennium’s first decade was to have your processes in offshore centers, but this is going to change considerably,” he said. The prospect of labor costs falling 5 to 10 percent as a result will bring about a major change in think-ing, not just in finance but in HR, marketing, sales and custom-er contact systems as well, he added. Given the volumes of car, manufacturing and other data that will become available in coming years, IT managers have high hopes that AI will help them produce virtual simulation data and handle the kind of analysis that would take too long otherwise. “Machine learn-ing systems that can completely train themselves will usher in a breakthrough,” Accenture’s Seiberth said. The notion that we will see software that develops software on its own defi-nitely seems realistic in the next few years. In the Google Labs, an AI program was able to create an application to judge the quality of various speech modeling systems. It is better than comparable applications developed by human beings.
Blockchain
Mainly hyped as the technological basis for the digital cur-rency bitcoin until now, the virtual ledger or decentralized accounting system known as blockchain can be used for prac-tically anything involving the adherence to rules and safe-guarding information. Blockchain is an encrypted database that runs on many computers and in which all transactions are stored unalterably. Ethereum, the second generation of the blockchain architecture, is now emerging; it implements de-centralized applications. Capgemini’s Mehl considers block-chain technology to be the number-two trend. Over the next year, he said, it is imperative to clarify where the technology of the “decentralized ledger” could be used in finance, HR, lo-gistics and customs duties. “Blockchain is a good fit wherever you are dealing with the efficient transmission and archiving of complete, correct information,” Mehl said. IT consultants say, in 2018, the first projects will particularly be seen in the quality and cost-efficiency fields. There also are scenarios for applications in after-sales and vehicle communications as well as in charging and payment processes for electric mobility. When it comes to quality and compliance, the complete histo-ry of components and entire products from the supply chain to the customer can be traced without any gaps. It is now impera-tive to find out precisely how the technology is integrated and can interact with existing software systems such as Product lifecycle management (PLM). [See also story, page 12]
Augmented reality
Until now, companies have approached immersive technol-ogies tentatively. But once there are glasses that are worn as conveniently as sunglasses, at the very latest, the expanded reality could improve even more processes in development, production, logistics and continuing education. The secre-cy-shrouded augmented reality (AR) glasses from Magic Leap are expected to finally reach the market next year, according to announcements. AR, enriched with virtual information, may well gain an edge over virtual reality (VR) in 2018, but companies have to adapt to the new technology and develop applications for their own specific deployment scenarios. “You need entirely different capabilities in an IT department to build these kinds of applications,” Seiberth said.
Proponents say blockchain will make
transactions safer and more transparent.
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IT TRENDS 2018
Platforms for micro-services
With cloud-bases services becoming the mainstream, IT ex-perts see major changes in companies’ ERP environment. McKinsey’s Richter said fundamental changes in the handling of data are underway. “Some companies are considering the notion of shrinking the current ERP system to basic function-alities and building platforms that rely on micro services,” he said. In a survey of attendees at the recent McKinsey ERP summit, 70 percent of the respondents indicated that they were turning to micro services as a best-of-breed strategy. By contrast, only 30 percent swore by the dominant SAP Hana in-memory database platform. The development of individu-alized services is seen as a high priority everywhere and Goo-gle, Amazon Web Services and Microsoft are providing the platform for them. Accenture’s Seiberth potentially sees micro services as the next architecture paradigm for business soft-ware providers as well. “There will be less customizing, and the man-years spent on adaptations will be a thing of the past,” he said.
Quantum computing
In 2018 major IT players will also invest more heavily in the development of quantum computing. Experts are convinced that a different approach to computing is needed to handle ex-ploding requirements. Quantum computing, which is based on quantum mechanics, can give an enormous boost to AI appli-cations. Development is slowed down, however, by a scarcity of specialists in the area. And it takes hard work to build up expertise. “IT departments need to grapple with trends such as quantum computing so they have answers when the busi-ness side makes inquiries about them and if they want to bol-ster their relevance,” said Mehl of Capgemini. In recent years, he said, the industry has seen IT departments chasing after concepts such as cloud computing or “bring your own device.” There has already been a change of thinking on these matters. Simulation in particular will require the kind of computing power that, most likely, only quantum computers can deliver.
By Daniela Hoffmann
The technology company Cisco sees five major trends in transportation in 2018:
1. Data. Transportation authorities will start to use improved analytics to create business models out of the growing amounts of traffic and vehicle data they collect. This can lower costs, improve safety and make travel more efficient. Kyle Connor, transpor-tation industry principal at networking group Cisco, says projects are underway in the Netherlands, the state of Tennessee and elsewhere to provide traffic data to commercial companies such as TomTom, Here and Google.
2. Mobility as a Service (MaaS). Ride-sharing and other new modes of transportation will see broader use in 2018 and there will be increased integration with mass transit. This will reduce congestion and provide a more seamless travel experience. Connor predicts more cities will offer consumers a single transportation fare that covers public transport, ride hailing and other modes of transportation.
3. Car ownership declines. The growing use of alter-native mobility services coupled with electrification will reduce miles driven in combustion-engine-pow-ered cars. This will cut into tax revenues. As a result, local and state governments will start looking for new data-based services to generate replacement revenue.
4. AI and machine learning. These new technologies will play a greater role in transportation in 2018. Im-proved weather forecasting and better use of traffic data will reduce disruption on the roads, lower costs and make travel safer. Cisco’s Connor cited one program that uses AI to predict where a police offer will be needed.
5. Integration. Governments and transportation agencies will work more closely with consultants, systems integrators and other parties to deploy new technologies. More cities and state governments are expected to appoint chief innovation officers.
By Arjen Bongard
Transportation 2018
Quantum computing will be one way to deliver the power needed for tomorrow's simulation technology.
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PREVIEW
In the next automotiveIT international:
CES, Detroit Auto Show set stage for automotive 2018
automotiveIT reports from the two major trade shows that tradition-ally start the year for the global auto industry. Stories, interviews and analyses from the Consumer Electronics Show (CES) in Las Vegas and the Detroit Auto Show will highlight the automotive potential of new IT products and systems.
Issue Spring · 2018
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Editorial:Editor-in-chiefArjen [email protected] Hilmar Dunker, Ralf Bretting, Pascal Nagel, Christian Raum, Markus Stier, Ted Siefer, Jason Booth, Peter Suciu
Automakers are working closely with IT security specialists to make sure fully connected vehicles are protected against cyber attacks. While car brands each have their own approach to security, they also are increas-ingly cooperating to develop a standard defense against digital attacks.
IoT platforms gaining ground
As cars become a more tightly connected part of the Internet of Things, IoT platforms will be essential to control the way in which mobile and static devices interact with each other. IoT platforms also will play a crucial role in realizing the new business models the auto industry is developing.
The next issue of automotiveIT international will be available in March 2018!
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Winter 2017-2018 59
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EXCLUSIVE INTERVIEWS with C-level executivesfrom the global automotive and IT industries:
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Management · Digitalization · Strategy · Systems · Global
December 2017 – February 2018
miz
Spezial · Connected 33
04 · 2017
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Spezial
Infotainment
Die Wortkombination klingt locker und gefällig, aber im Auto ist Infotainment ein Knochenjob – für Entwicklungsingenieure wie Fahrer gleichermaßen. Knöpfe, Ges-ten, Sprache: Bei Smartphone-Integration und Navigation wird wild ausprobiert, was technisch geht. Nicht alles ist zielführend.
30 Management · Apps in der Produktion
_Flinke Finger. Im Markt für Produktions-IT rumort es heftig. App-Entwickler wollen die Vormachtstellung monolithischer Großsysteme brechen und schicken ihre Helferlein zu tausenden ins Gefecht.
automotiveIT 06/07 · 2017
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InterfaceThe HMI is getting better, but carmakers continue to search for intuitive controls
JungwirthVolkswagen Group CDOdrives digital transformation across 12 car brands
Production appsDespite security risks, mobile apps are making their way into manufacturing IT
Formula E As car brands test new technology, is autonomous racing next?
PLUS:Auto industry
searches for the perfect business
model (p. 36)
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