Automotive Manager Report: Tech Rivals OEMs in Connected and Autonomous Vehicle Patents
July 17, 2017

The global automotive industry is at a turning point. The automobile is undergoing a transformation, moving from a means of conveyance to becoming a data center on wheels. For car manufacturers to maintain their leverage, they have to build alliances and concentrate on R&D resources, according to Oliver Wyman’s new Automotive Manager 2017 report.

“This is one of the most exciting times in the auto industry in decades, perhaps for a century. However, the excitement also brings challenges,” said August Joas, Head of Oliver Wyman’s Automotive Sector. “Success – and possibly survival – depends on being nimble, flexible, and imaginative.”

The Automotive Manager report identifies five key trends affecting the auto industry: the patent race, driver assistance systems, big data, e-vehicles, and how the industry needs to change the way they sell cars.

The Patent Race

Who will be the first company to put consumers behind the wheel of autonomous automobiles — automakers or technology companies? The race is on. In an analysis of patents involving connected and self-driving cars, there were almost 1,200 patents filed between 2012 and 2016. Close to one-third were filed by tech companies, led by Google. Google almost ties the leader (Audi 223) in the connected car and self-driving category, with 221 patents. Google filed more than BMW (198) and Daimler (159) individually, and more than GM (141) and VW (75) combined. The other five in the non-auto group were Apple, Facebook, Microsoft, Amazon, and Uber.

Advanced Driver Assistance Systems (ADAS)

Technology that helps drivers stay on the road, brake in case something unexpected happens and provides parking assistance will be in half of all cars in the world by 2030 according to Celent, a division of Oliver Wyman. While these innovations are loved by consumers, they are increasingly complex and could become the Achilles’ heel of next-generation vehicle design without proper safeguards. For example, parking assistance systems alone rely on more than 12 ultrasonic sensors. As the complexity of these components increase, automakers will need to reorganize their quality management controls.

Getting Plugged In: The Future of E-vehicles Global

Many in the industry consider electric vehicles to be the future of the automotive industry, however, uncertainties remain — and have increased significantly. Current estimates predict e-vehicles will account for 30 percent of production share by 2025 assuming many regulators will take action. However, taking the questionable development of the market into account, this number can vary in either direction. Legislation changes and infrastructure are the key drivers in setting the pace for increasing electrification of cars globally. Until progress is made on these fronts, this once promising sector is at a standstill.

Big Data: Leaving Money on the Table

Automotive companies could generate additional value between $500 to $1,000 per car by analyzing and optimizing commercial patterns with big data. However, the industry needs better strategies for managing and monetizing big data. Non-traditional players with significant data experience are waiting in the wings to benefit and traditional automotive players need to leverage their knowledge of the end-customers to ask the right questions to get big data working for them.

Industry Needs New Approach to Selling Cars

Car pricing is more of an art than a science and the industry needs an overhaul in its approach. For example, automakers need to stop rewarding customers with undifferentiated discounts and incentives. The industry can reduce distribution cost and incentives by 30 percent without compromising sales volume. Car dealerships need to re-examine their approach to maintain their relevance and market share, based on new roles and responsibilities in the future automotive ecosystem.