Who will pave the way into the future, OEM’S, suppliers or startups?

In recent years, the automotive industry has found itself at a crossroad between traditional areas of automotive engineering and digital era. The new reality made the automotive industry even more vulnerable.

In Europe, more than half of every car is developed and partly manufactured by tier 1 and tier 2 suppliers. OEM’s usually play a role of assembly unit, meaning the OEM’s heavily depend on outsourcing. The situation was under control of OEM’s, as their suppliers heavily depended on them. In a new, digital era, new players emerged, surprised the traditional players, and disrupted the multibillion car industry.

Big tech companies that were never before connected with Automotive industry, like Google and Apple, paved a way into the car’s digital brains, connected smartphones with in-car touch screens and replaced old navigation with interactive live maps.

How to react? The answer lies in small startups. Companies with a small number of employees that have the knowledge and freedom to explore, innovate and pave the way for car companies in the digital era, but lack funding. They are, carefully selected and evaluated, the best takeover targets, which is evident from the last year’s statistics shown in the table.

Brainstorming startup ideas on a window

Cars are no longer pieces of hardware taking us from point A to point B. We are entering the mobility as a service era following a huge explosion of data. Did you know that the space shuttle ran four thousand lines of codes and today’s cars are run by 100 million of codes,” is a clear statement of Fede Ponce from Nissan, a key speaker in the City as a Lab Summit 2019.