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Auto industry moves beyond manufacturing
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SOME 130 years after cars first appeared, the automotive industry is in the throes of reinventing itself. What was once manufacturing for manufacturing’s sake is now shifting to what is being called “mobility services.”
Much of the transformation has come about because of the omnipresent Internet, with its power of computing and connecting, its ability to wring more value out of a car through ride-sharing, car-sharing and a connected driving experience. A carmaker’s market profile depends more and more on figures beyond car sales.
General Motors, joining Daimler, Volkswagen and Ford, is the latest carmaker to draw attention to its shift toward a services company in China. Part of its 2016-2020 corporate strategy, announced earlier this week, is to capitalize on the future of personal mobility.
“By 2020, all Cadillac, Buick and Chevrolet products will be connected in one way or another,” said Matt Tsien, executive vice president of General Motors and president of General Motors China.
According to China’s industrial roadmap for 2025, 80 percent of cars made in the country when the century passes the quarter mark will come equipped with telematics. Thirty percent are targeted for application of V2X, or vehicle to everything, technologies, a futuristic vision of cars “talking” to each other and of dedicated channels to improve traffic efficiency and safety.
Aside from a car-sharing pilot program run out of Shanghai Jiao Tong University, GM’s plans rely heavily on the telematics specialty of subsidiary OnStar. Its subscription-based, on-board communications and vehicle security functions have drawn 1 million active users in China and become a profitable business.
Underlying the broader range of services is enhanced connectivity — faster speeds and more secure networks of the kind promised by 4G LTE. This latest on-board wireless Internet technology was first introduced to China on Cadillac ATS last October, and it has since become available on Chevrolet Malibu XLs and New Buick Lacrosses, all bundled with OnStar services.
The innovations are a work in progress for a people-vehicle-life eco-system. General Motors earlier this month announced the integration of OnStar’s 4G LTE telematics with smart household technologies from Chinese home appliance maker Midea Group. Visions of motorists on the road being able to communicate with appliances back home are also the basis of Ford’s cooperation with home appliance maker Haier.
The Ford approach is to develop an eco-system of connected car services that is more open-sourced. Its SmartDeviceLink technology platform welcomes third-party contributions, similar to the way Apple built an app developers’ community around its products. The accomplishment is more about in-car infotainment functions, like social media, music players and navigation systems, rather than deeper data integration with emergency assistance or with security applications such as car-sharing based on digitally transmitted encrypted keys.
The former are creating more buzz than the latter, despite their reverse order of importance. The digital daily life of many people now takes place in their cars these days, turning travel time into a new source of Internet traffic. Be it booking a restaurant, paying for a parking spot in advance or calling for a designated driver, a car’s infotainment system could be a prime outlet for selling services and advertisements.
Though the in-vehicle system hasn’t proved its worthiness as a money-spinner yet and smartphones remain the dominant gateway to infotainment services in the cabin, carmakers don’t want to be left out of a trend that could prove hot.
That fear of being left behind is also driving the likes of Apple and Android. The world’s biggest two smartphone operating systems have developed their own respective, incompatible car-adapted operating systems for the control console.
It’s indeed getting to be a crowded field. IT companies are now encroaching into what was traditionally the domain of mechanical engineers as they explore new applications for their specialties, no matter how far-fetched they often seems at the start.
LeEco, formerly known as Letv, last week announced six domestic automotive industry partners will be included in its smartphone-connected vehicle infotainment eco-system — a stepping stone for its own grand carmaking plans. The system’s most recognizable advantage is LeEco’s accumulating and exclusive content from its once core business as a video streaming website.
LeEco’s ambition is to bring 400 live shows, 3,000 live sports games, 100,000 popular TV dramas and movies into cars. Demonstrations on BYD, Dongfeng and BAIC cars were on display at last week’s event.
LeEco offers its subscribers a 6G free data plan for 4G LTE in-vehicle usage every month via brought-in smartphones. That compares with OnStar’s 6.6G free data for the first six months’ use of its built-in 4G LTE WiFi module. Streaming videos over 4G LTE can be extremely data-consuming.
It might seem a little weird to see driver-distracting content offered in such a cavalier way, but watching TV dramas on a mounted smartphone while driving is no strange time-killer to many professional drivers in China. LeEco stressed that it takes safety issues very seriously, and the videos are mainly for passengers, who can also watch from rear seat screens.
“Before the era of autonomous driving comes, the need for in-vehicle entertainment co-exists with safety issues,” said Liu Jie, vice president of LeAutolink in charge of LeEco’s vehicle infotainment. “We will try to satisfy users with audio programs mainly.”
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