Delphi, Mobileye deal may hasten decline of car brands
|Christiaan Hetzner is Automotive News Europe's Germany correspondent.|
Can automakers design a satisfying brand experience for a fully autonomous vehicle? How can competitors better differentiate themselves from one another when getting into a car could be like boarding a train in the future?
As long as you know how long it takes to travel somewhere in driverless mode, would you still care about horsepower, torque or other performance metrics – after all how many people who take France's famous bullet train from Paris to London honestly know much more than its top speed? Audi's autonomous concept "Jack" for example is moving in the exact opposite direction: no hasty moves, sharp curves or sudden bursts of speed that might alarm passengers while reading a book.
When all consumers might care about is using the time productively, the biggest difference then will be comfort instead of performance. Premium brand customers will arrive at their point of destination relaxed and refreshed while the rest are consigned to the economy class trappings offered by mass-market cars. The key point is the amount of time actually spent engaging with the car and driving it will likely be reduced to a bare minimum, which is why Porsche has so much trouble with the concept.
These questions need to be answered and soon now that Mobileye and Delphi announced the development of a drop-in solution that turns an everyday automobile into a robocar at little cost and no upfront investment in the technology for an OEM by 2019.
Delphi and Mobileye will develop a new platform called CSLP (Central Sensing Localization and Planning) that will use a high resolution camera, software algorithms and realtime mapping technology based on swarm data to navigate the vehicle, relying only on a solid-state LiDAR sensor as a redundancy to maintain a low price tag.
Mobileye Chairman Amnon Shashua say this will "bring the cost of the entire system to a few thousands of dollars." The first cars on the roads commercially could come in just three years. While still just an announcement, the two plan to demonstrate the technology at the upcoming Consumer Electronics Show in Las Vegas in January, so they must feel pretty confident.
The partnership means that the top classifications of self-driving cars - Level 4 (fully autonomous but still able to be operated by a human) and Level 5 (fully autonomous, with no option for human driving) could become an affordable reality available to anyone in this decade even if it may be an off-the-rack experience that differs little between models or brands.
By comparison Bosch, the world's largest supplier and a keen believer in autonomous driving, doesn't expect to launch its own Level 4 system until after 2025, partly because of concerns relating to transport regulations, technological challenges and the time it takes to run tests over millions of kilometers. It's typical of German companies to wait until all legal uncertainties are removed while the U.S. and Israel (where Mobileye is based) forge ahead creating facts on the ground even if might mean fighting the one or the other courtroom battle.
Mobileye and Delphi say the timetable to autonomous driving is accelerating at a more rapid pace than initially thought because regulators want fewer accidents and municipalities are struggling with heavy congestion and the challenges of limited parking.
Are carmakers such as Mercedes-Benz or Audi interested in purchasing such a "turnkey" solution? Not on your life. They have far too much invested already and have no appetite for sourcing a system as core as that entirely from a supplier. Not only would they be dependent, it would be harder to control its application and integration in their vehicles – their single best bet at shaping a unique customer experience. "Any self-respecting carmaker would not buy into a black box like this," a German executive told me.
Mobileye and Delphi acknowledge that and spin the product more as an alternative for automakers that don't have the resources to develop the technology. Think subscale brands or low-margin mass manufacturers.
"There are certain (carmakers) out there that will decide to develop the technology internally and won't be focused on a turnkey approach for whatever strategic or tactical reason," Delphi CEO Kevin Clark said during a conference call.
But there was a comment from Clark that may give a clue as to who really might be the future customers. Market developments were "ultimately pulling forward the demand for level four and level five, part of which is being driven by the shared mobility providers and their success out there."
This brings me back to the underlying question: how do you create a meaningful brand experience when driving becomes only a means to an end?
Perhaps the biggest nightmare haunting industry executives is that they won't find the answer, resulting in a future where manufacturers would one day end up as mere hardware suppliers - the fate that happened to manufacturers of phone handsets. In this dreaded vision automakers will become white-label producers surrendering the customer relationship to Uber and the other third-party mobility service providers to which Delphi's CEO referred. These companies could easily get someone to build them a run-of-the-mill badgeless car, implant the drop-in autonomous technology from Mobileye and Delphi and rebrand it an Uber or Didi for example and become true competitors to today's auto manufacturers.
Morgan Stanley argues automakers have been caught off guard by these startups because traditional OEMs didn't realize they are selling into an annual mobility market comprising 10 trillion miles driven, rather than an 80-million-unit new car market as conventionally believed.
Worse their highly scalable "asset-light" business model would make mobility service providers far more profitable as they wouldn’t be stuck with the fixed costs of maintaining massive production plants with thousands of staff.
What once seemed like a question to be left for the next generation of car executives suddenly has to be solved by today's CEOs.
You can reach Christiaan Hetzner at email@example.com.