High-tech dashboards signal big changes for auto parts suppliers
PEER at the instrument panel on your new car and you may find sleek digital gauges and multicoloured screens.
But a glimpse behind the dashboard could reveal what US auto supplier Visteon Corp found: A mess.
As automotive cockpits become crammed with ever more digital features such as navigation and entertainment systems, the electronics holding it all together have become a rat’s nest of components made by different parts makers.
Now the race is on to clean up the clutter. Visteon is among a slew of suppliers aiming to make dashboard innards simpler, cheaper and lighter as the industry accelerates toward a so-called virtual cockpit - an alldigital dashboard that will help usher in the era of self-driving cars.
What’s at stake is a piece of the US$37-billion (RM167-billion) cockpit electronics market, estimated by research firm IHS Market to nearly double to US$62 billion by 2022.
Accounting firm PwC estimates that electronics could account for up to 20 per cent of a car’s value in the next two years, up from 13 per cent in 2015.
Meanwhile, the number of suppliers for those components is likely to dwindle as auto makers look to work with fewer companies capable of doing more, according to Mark Boyadjis, principal automotive analyst at IHS Markit.
“The complexity of engineering ten different systems from ten different suppliers is no longer something an auto maker wants to do,” Boyadjis said.
He estimates manufacturers eventually will work with two to three cockpit suppliers for each model, down from six to 10 today.
One of Visteon’s solutions is a computer module dubbed “SmartCore.”
This cockpit domain controller operates a vehicle’s instrument cluster, infotainment system and other features, all on the same tiny piece of silicon.
So far this year, the Detroitbased company has landed two big contracts for undisclosed sums. One, announced in April, is with China’s second-largest automaker, Dongfeng Motor Corp.
The other is with MercedesBenz, Reuters has learned. Mercedes did not respond to requests for comment. Another unnamed European auto maker plans to use the system in 2018, according to Visteon.
Visteon is going all in on cockpit electronics, having shed its remaining automotive climate and interiors businesses in 2016. The bet so far is paying off.
The company secured US$1.5 billion in new business in the first quarter, helped by growth in China.
Visteon’s stock price is up more than 50 per cent over the past year.
It’s a major turnaround since Visteon was spun off from Ford Motor Co a decade ago. Visteon filed for bankruptcy protection in 2009 before emerging a year later.
“You have to be changing and adapting fast. If not, you’re not going to keep up in this market,” said Tim Yerdon, Visteon’s head of global marketing. “It’s about re-inventing yourself to stay ahead.”
Visteon’s make-over hints at the coming battle between suppliers fighting for real estate in the digital cockpit.
The trend is already triggering acquisitions, as companies look to boost their offerings to auto makers.
Visteon in 2014 bought Johnson Controls’ electronics business, which was also developing a domain controller.
In March, Samsung completed its US$8-billion purchase of infotainment company Harman.
France’s Faurecia, a top seating and interiors supplier, last year purchased a 20 per cent stake in Paris-based infotainment firm Parrot Automotive SAS in a deal that could make Faurecia the biggest shareholder by 2019.
Deal-making in the wider automotive sector has been at a fever pitch over the past two years fuelled by the race to develop autonomous vehicle technology. — Reuters
Visteon is among a slew of suppliers aiming to make dashboard innards simpler, cheaper and lighter as the industry accelerates towards a so-called virtual cockpit - an all-digital dashboard that will help usher in the era of selfdriving cars.