Technology disrupting traditional automotive business models
Wednesday, June 12, 2019
The Windsor Star/Dave Waddell
Technological advancements have made plenty of products obsolete, including the automotive industry’s traditional business model.
Those gathered Tuesday at the Automotive Manufacturers Association’s In.tel.ili.gent Network conference at Caesar’s Windsor heard how a once conservative industry is transforming into one of the most exciting and nimble sectors of the economy.
“We needed to be more humble,” said Ted Graham, General Motors Head of Open Innovation, in his keynote address.
“Were we going to be RFP (request for proposal) driven or did we need to show up at conferences and events and listen to what was happening?
“A part of engagement needs to be not knowing every answer. We had to adapt to listen and learn and work with a variety of partners.”
That has included changing the very basics of GM’s business model and the companies the corporation is willing to partner with.
Technology has forced automakers to accept increased risk.
“The question used to be how many years a company had to be in business to do a contract with us,” said Graham of the luxury GM once enjoyed. “Longevity was a risk abatement. That’s not true anymore.
“We needed a rethink.”
What is emerging from the crumbling of past industry practices remains to be defined by the most creative minds.
However, the end goal for General Motors is clear.
“Our goal is to disrupt ourselves and own the customer relationship beyond the car,” said Graham in quoting GM CEO Mary Barra.
For Graham, who joined GM three years ago and who has written a book about his experiences as one of Toronto’s first Uber drivers, the undefined future of the industry is what makes it so attractive.
“The prospect of shared and autonomous vehicles,” said Graham of the industry’s most exciting challenges. “The business model is opaque and I can make an impact.
“We can help cities understand their challenges. In a congested city – I’m excited to solve that.
“We won’t get the economic development in our cities if we don’t solve that.”
It’s a challenge faced by more than just the Original Equipment Manufacturers as the speed of technological advancement and the significant costs attached to it can be overwhelming.
It’s led to a series of mergers in the industry at all levels as companies scramble for compatible partners and increased resources.
“This (mobility) is bigger than any single company,” said Pierre Olivier, Chief Technical Officer of LeddarTech (LiDar sensing technology).
“Some vendors have a lot of hubris on how they talk. It requires collaboration, how data is shared and experiences to achieve goals and not just headlines.”
Olivier added one of the key determinants of the future of the automotive industry in Canada will be in generating and retaining talent. Ontario in particular has emerged as a world leader in creating tech jobs in recent years, opening the door to a real opportunity for the province.
“Talent has to be the accelerator,” Olivier said. “It’s (mobility) an extremely complex problem.
“It’s of the same magnitude as putting a man on the moon.”
Susan Anzolin, executive director of the Institute of Border Logistics and Security, said with the industry in a state of disruption Ontario’s talent pool can help it emerge as one of the winners in the global automotive arena.
Anzolin notes the number of international firms that are already setting up research and development centres in the country.
“We can compete on talent,” Anzolin said. “We’re seeing that with American corporations having companies on Canadian soil.
“Our integrated supply chain also supports the chance of further innovation. We may not have a Canadian OEM, but we have a lot of suppliers and technology companies doing innovative things for OEMs.”