Special Report

November 27, 2014

Can traditional auto industry be upended by Internet?

On October 16, 2014, the sub-forum named Connectivity and self-driving cars was held. Dr. Ralf Cramer, Member of the Executive Board of Continental AG; President and CEO of Continental China, Frank O’Brien, Executive Vice President, Asia, Magna International Inc., Li Keqiang, Dean of Automotive Engineering Department of Tsinghua University, Patrick Gardiner, Senior Vice President; President, Global Automotive, Nielsen, Pasi Nieminen, CEO of Link Motion and Ashvin Chotai, Managing Director, Intelligence Automotive Asia had in-depth discussion about that topic.

Automobiles, consumer behaviors are transformed by connectivity

How connectivity changes consumer behaviors? Ashvin Chotai, Managing Director of Intelligence Automotive Asia indicated that connectivity changes consumer behaviors, including life style. For most consumers, connectivity is closely related to entertainment. With the development of touch tablet and navigation, more functionality will be added in future, such as safety diagnosis function.

Dr. Ralf Cramer, Member of the Executive Board of Continental AG; President and CEO of Continental China, think Internet application is quite common in China. There are almost six billion Internet users and billions of smart phones. What is more surprising is the sales volume of E-commerce that has reached 35.1 billion RMB (about six billion dollar) on November 11, last year. Internet application in China was at very high level on that day, which has exceeded other countries.

If part of self-driving cars can be used in megacities like Beijing, Shanghai and Guangzhou, the traffic jam problem can be relieved to a large degree. We did a survey and got a surprising result that 65% of Chinese believe self-driving cars will be coming soon and even be widely used. The result in Germany and Japan are 50% and 37%, respectively. It is hard to believe that the self-driving cars are very well received among Chinese people.

Data are reliable basis for self-driving

Frank O’Brien, Executive Vice President in Asia of Magna International Inc. argued that self-driving should achieve zero casualties. With application of new technologies, we can analyze data to reduce accident rate. Data analysis and data security are all significant issues. Meanwhile, the cost of that cannot be expensive.

The practical significance of Connectivity and vehicle-mounted terminal

Li Keqiang, Dean of Automotive Engineering Department of Tsinghua University believed that Connectivity can be applied not only in vehicle using, but in vehicle performance improvement as well. Internet, Connectivity and ADAS are connected with each other, not independent.

Due to crossover combination, it must contain highly technical in nature and complexity. The interrelationship of them should be concerned. It is concerned with Connectivity, improvement of service, sales and production, traffic safety and energy saving.

By investigating in ten cities in China, Patrick Gardiner, Senior Vice President and President of Global Automotive of Nielsen concluded that Chinese consumers have especially high requirements of technical configuration. The best sell vehicles are all with vehicle system and entertainment system. Vehicle system is one of the top five factors that can determine automobile acquisition for Chinese consumers. Therefore, we believe connected vehicles will become a watershed in auto industry, the significant tag of OEMs as well.

What is Auto 2.0

Pasi Nieminen, CEO of Link Motion, introduced three revolutionary trends of auto industry development, which will start with China in near future:

The first is the definition of Auto 2.0; then is connected car and finally is self-driving car. In fact, Auto 1.0 is based on mechanical engine; but on-board computer is the base of Auto 2.0. It is like industrial revolution in auto industry. The three trends will also have great influence on Automotive Industrial Design Engineering.

-Published on page#33, November-2014 edition of MOBILE WORLD Magazine

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