The new age of driving
Electronics company TE Connectivity is eyeing greater revenue gains from the connected car industry as its top brass expects such vehicles to revolutionize the automotive industry soon.
Listed in the United States, TE Connectivity is a public-traded company with products ranging from connectors, sensors and electronic components.
“Just like the birth of the Model T, the very first car produced in the world in 1908, the connected car has the power to shake up the auto industry profoundly, and we are very optimistic about the outlook,” said Shen Weiming, vice-president and general manager of TE Connectivity’s automotive division in China.
“Our division is planning to double the revenue in the China market by 2020,” he added.
Last year, TE Connectivity’s automotive division in China reported a 16 percent year-on-year growth rate.
The double digital growth was achieved even as China’s automotive sales posted a three-year-low growth rate of 4.7 percent, according to data from the China Association of Automobile Manufacturers. The association expects sales of vehicles in China to increase by about 6 percent to reach 26.04 million this year.
According to predictions by IHS Automotive, the sales of connected cars — vehicles that are hooked up to the Internet — are expected to grow six-fold globally to hit 250 million by 2020.
Hou Yafei, head
project development with Duxes Business Consulting Inc, said that the connected car market in China alone will grow 40.9 percent to 155 billion yuan ($23.87 billion) this year. She added that more than 20 automotive manufacturers are about to launch or are planning to install connected vehicle services within three years.
Lin Rong, deputy director of China Transport Telecommunications & Information Center, believes that this particular sector would account for one-sixth of the Internet of Things in the future. He added that research findings showed 90 percent of the cars on the roads come 2020 will have Internet access.
“Since the modern automobile was invented, its basic functionality and shape have remained essentially the same. However, the environment in which vehicles operate, and the data to which they connect in order to improve or enhance the driving experience, are changing dramatically,” stated a white paper by TE.
“TE is aiming to become the ‘enabler’ of the auto industry revolution,” said Shen, who added that aspects such as safety, environment and lifestyle changes will be playing important roles in the connected car revolution.
According to research findings, 90 percent of crashes are caused by human error and Shen believes that advanced driver assistance systems (ADAS) will be the way forward for car manufacturers to help customers prevent collisions. IHS foresees that cars with autonomous driving modes will reach 7 million by 2035, an indication of the promising market potential for such technology.
According to Shen, while the technologies and capabilities are already in place and are constantly evolving to produce the connected car of the future, there are still problems that need to be solved within the ecosystem, such as security and privacy, Internet access, infrastructure, autonomous driving buy-in and economics.
Yu Guang, director of the technology division at the China Association of Automobile Manufacturers, said that the actual development of the connected vehicle industry might not take place as smoothly as expected. He cited the challenge of having to first set up an intelligent transportation system, which will require some time, before connected cars can become available.
“China’s automotive industry is about four and five years behind the global standard and companies will need more patience in waiting for the growth and maturity of the China’s connected vehicle industry,” said Yu.
vice-president and general manager of TE Connectivity’s automotive division in China