Smart car, smart business model

Connected, driverless vehicles are set to overhaul not just the automotive industry, but software, finance and telecommunications too. KPMG’s Alec McCullie tells us how.

On 6 April, six convoys comprising more than a dozen trucks arrived in Rotterdam after driving across Europe. The remarkable thing? In each convoy, only one of the trucks had a driver in control on the motorway. The rest were driving themselves. Connected and autonomous cars are on a fast track to becoming the norm. In February, the government awarded £20m to eight projects at the forefront of this transport revolution. The Insight, will create a fleet of driverless shuttles with advanced sensors for trials in pedestrian-friendly city areas, mainly for disabled users. One man keeping a close eye on all these developments is KPMG Associate Director Alec McCullie, whose career in car giants including GM, Ford and Honda led him to designing autonomous car capabilities with tech start-up At KPMG he helps clients from start-ups to large corporations develop strategies to embrace, apply and leverage these game-changing technologies. And he says there needs to be a huge change in mindsets to bring them to market – one that will have profound knock-on effects throughout a range of industries. A tankful of code Established original equipment manufacturers says McCullie, citing the autopilot feature or upgrades to battery management. “Traditional OEMs can spend four years developing a new product, and then another two optimising components to reduce cost, weight and improving reliability. The life cycle for platforms is typically much longer.” The message? Software is now a defining element to the car experience. Connected cars can gain new features and “driving intelligence” simply by downloading an upgrade from the manufacturer. It’s not just aftermarket upgrades. “The four segments I see emerging now are telematics, vehicle-to-x communication, cybersecurity and autonomy,” says McCullie. “Beyond telematics, we will have intelligent systems monitoring everything from engine state to driver health.” Auto industry leaders are already reacting – witness General Motors’ acquisition of self-driving start-up Cruise, as well as the purchase of Israeli cybersecurity firm Towersec by connected-cars specialist Harman Industries. “Not only did the field of vehicle cybersecurity not really exist just a few years ago (Towersec was founded in 2012),” McCullie says, “but now you have large corporations acquiring targeted expertise to move quickly.” (OEMs), McCullie argues, are accustomed to ground-up product development – an engine model is typically designed with set emissions and power targets; built; and homologated (auto-industry speak for ‘accredited’). Regulators then check sample units on a regular basis. The revision cycle often takes years. “By contrast Tesla software in its cars allows it to remotely turn on new functionality whenever it’s ready,”

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