Suppliers: Be Ready When Technology Companies Come Knocking

11 January 2016 Dashboard Insights Blog

It is hard to believe that just two years ago, it was news that so many auto companies were attending the Consumer Electronics Show (CES). In contrast, last week’s 2016 CES show featured a full 25% of its keynote speakers from car companies. The Wall Street Journal went so far as to proclaim that “Driverless Cars Steal the Show.” As the 2016 North American International Auto Show kicks off this week, it’s worth reflecting on what this convergence of auto and technology means for the industry. 

Is automotive dominating technology, or is technology swallowing automotive? Will your children drive a GM-badged vehicle, or a Google-badged vehicle? It seems to us that the acquisition of one of the automotive suppliers by a technology company is a matter of when, not if. Smart suppliers will be ready.

As we discussed just last week, car sales hit an all-time high in 2015: 17.5 million vehicles. While that number sounds amazingly large, especially compared with 10.4 million vehicles in 2009, just how big is it? After all, this all-time high is just a fraction of smartphone sales. Add in tablets, wearables, etc. and just how big is the automotive industry compared to technology? Moreover, there is the daily encroachment on the automotive industry by companies like Google, Apple and others.

For years, when we discussed the “Automotive Industry,” the conversation almost exclusively revolved around the companies that make cars and their suppliers – the bread and butter of the industry. This automotive/technology convergence trend makes us wonder if that bread and butter may just be shifting with the wave of the future.

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