A few years ago, the fear of decline grew among telecommunications companies.
Because more and more consumers were using the often advertising-financed services of technology groups such as Facebook, Google, Apple, Spotify or Netflix, network operators such as Deutsche Telekom feared they would become “stupid tubes”.
You would transfer customer data and thus generate a certain amount of sales and profit.
The potentially much greater profit from the direct business with the data would, however, be drawn by others.
The auto industry has a similar fear right now.
There is concern among manufacturers that they will produce “stupid bikes” in the near future.
In this scenario, the vehicles would continue to transport people - but rather in interchangeable vehicles for the masses, who may be on the move in a highly or fully automated manner.
The real and potentially inexhaustible business would meanwhile be done by those companies that lure passengers into Robotaxi fleets and entertain them digitally with music, videos or series during the journey, support them with their work on the move using software or sell them goods and services online.
Is the "extended workbench" threatened?
Recently, German Chancellor Angela Merkel even warned the automotive industry against becoming an "extended workbench" for IT companies. Like parts of the industry itself that are promoting cars as smartphones on wheels, the CDU politician apparently assumes that digital services in cars will in future offer more added value than the sale of driving properties in particular or individual motorized mobility in general. As is often the case with fears, this too is exaggerated in its intensification. Nevertheless, the automotive industry shouldn't sit back and just let digitization continue.
She doesn't either. The Association of the Automotive Industry points out that suppliers and manufacturers from Germany will invest 150 billion euros in new technologies by the middle of the decade. A good third of this goes into software, into networked cars or automated driving functions, i.e. into autonomous driving. At the same time, many companies in the industry are setting up business units for software and digitization, employing thousands of IT specialists or software engineers, or training existing and professionally qualified employees so that they can meet the new requirements.
All these efforts are right and should be continued unabated, especially since the pace of innovation remains high and the goal of some developments cannot be foreseen today.
But it is wrong if you understand the digitization of the automotive industry as a pure defensive battle between “we” (vehicle manufacturers and suppliers) against “the” (mostly American technology groups).
Dependency must not become too great
There are already numerous interdependencies between long-established companies in the automotive industry and challengers from the tech sector. Without software or decentralized data storage solutions from technology groups, the industry, for example, would not be able to network its factories in line with Industry 4.0 and thus produce their vehicles more efficiently. At the same time, car buyers today demand that they can connect their smartphone with the digital offers in the car as smoothly as possible. This only works if car manufacturers work together with those providers of smartphone operating systems who may in future turn away their customers with digital services they offer themselves. As far as digitization is concerned, the automotive industry is stuck in a balancing act: it has to cooperate with companies,that could potentially be dangerous to her.
The solution, however, cannot be to tackle digitization without partnerships and completely self-sufficiently. This would hardly require affordable investments that were also missing in the development of other technologies, for example electric cars. In addition, it is almost impossible to catch up with the backlog of specialized software and technology groups. It would therefore be wiser to cooperate where it is necessary, but at the same time to build structures in order to use the offers of the technology companies, but also to refine them in such a way that cars can be distinguished in the future and the individual brands remain desirable. This will only work if the automotive industry develops its own digital knowledge and skills and does not allow the dependency on third parties to become too great.