The software revolution
Our CEO Patrick Vanbrabandt recently attended a Mercedes event where Wolfgang Bremm von Kleinsorgen, their BeNeLux CEO, said something that caught his attention: “We are evolving from a car company into a software and hardware company”. As bold as the statement seems, it’s an ambition of many automotive companies.
But the truth is also that this is a very challenging transition.
Car companies historically have a hardware DNA. Now that software is becoming more important, a lot of them are adjusting in phases. The first phase is often that they outsource the hardware part to outside parties like Bosch, Aptiv or Samsung. But then, in a second phase, you see a lot of them investing in their own software divisions.
This is where it becomes hard, because as legacy hardware companies, they will need to make serious adjustments if they want to thrive in fast-moving software context. In many ways, they are at a disadvantage compared to software-native types of EV companies from the US and China like Tesla, Rivian, BYD or Nio. It can be done, of course. Brands like BMW and Mercedes have been quickly evolving in the right direction. But many are clearly struggling as well.
And these are probably the biggest stumbling blocks towards that transition:
1. Culture: Traditional, hardware-legacy car brands have a very different mindset than the fast-moving software giants and new EV brands. They lack the speed and decisiveness of the latter, and it will take a lot of reorganization of organigrams, departments, attitudes, priorities etc. to be able to match it. Tesla for instance, once completely overturned its software overnight. Their systems had learned a lot from recording the car’s context and they decided to integrate these learnings in a new system. These are the types of fast decisions that traditional hardware-native car brands have difficulty making.
2. Simplifying the hardware: There is a huge difference between traditional car products which tend to come in lots of types of models and functionalities and, for instance, the 5 different models with limited options of Tesla. The latter simpler environment allows for easier and faster production and faster turnarounds like in the case of Tesla’s software overhaul. Fun example: Musk was for instance inspired by his son’s matchbox cars to create a production environment with a lot less welding which allowed for faster production. But then you compare that to a traditional brand which has separate production lines for EVs and gasoline and hybrid and diesel cars: there is a lot more complexity and cost there.
So it’s a fantastic ambition that automotive brands are pivoting towards a software environment with their products, but most of them will probably go through a difficult transition period.
Want CARYA to help your car dealership with a transition to a more tech driven environment? Check our website to see if we can help you with your CRM, DMS, IT infrastructure or marketing!
Car companies historically have a hardware DNA. Now that software is becoming more important, a lot of them are adjusting in phases. The first phase is often that they outsource the hardware part to outside parties like Bosch, Aptiv or Samsung. But then, in a second phase, you see a lot of them investing in their own software divisions.
This is where it becomes hard, because as legacy hardware companies, they will need to make serious adjustments if they want to thrive in fast-moving software context. In many ways, they are at a disadvantage compared to software-native types of EV companies from the US and China like Tesla, Rivian, BYD or Nio. It can be done, of course. Brands like BMW and Mercedes have been quickly evolving in the right direction. But many are clearly struggling as well.
And these are probably the biggest stumbling blocks towards that transition:
1. Culture: Traditional, hardware-legacy car brands have a very different mindset than the fast-moving software giants and new EV brands. They lack the speed and decisiveness of the latter, and it will take a lot of reorganization of organigrams, departments, attitudes, priorities etc. to be able to match it. Tesla for instance, once completely overturned its software overnight. Their systems had learned a lot from recording the car’s context and they decided to integrate these learnings in a new system. These are the types of fast decisions that traditional hardware-native car brands have difficulty making.
2. Simplifying the hardware: There is a huge difference between traditional car products which tend to come in lots of types of models and functionalities and, for instance, the 5 different models with limited options of Tesla. The latter simpler environment allows for easier and faster production and faster turnarounds like in the case of Tesla’s software overhaul. Fun example: Musk was for instance inspired by his son’s matchbox cars to create a production environment with a lot less welding which allowed for faster production. But then you compare that to a traditional brand which has separate production lines for EVs and gasoline and hybrid and diesel cars: there is a lot more complexity and cost there.
So it’s a fantastic ambition that automotive brands are pivoting towards a software environment with their products, but most of them will probably go through a difficult transition period.
Want CARYA to help your car dealership with a transition to a more tech driven environment? Check our website to see if we can help you with your CRM, DMS, IT infrastructure or marketing!
