Although the basics haven't changedfour wheels, transmission, engine, and so ontoday's vehicles have a staggering amount of "high tech" and "intelligent" content: Cars with DVD players and iPod® compatibility; cars that respond to voice commands; and cars that parallel park themselves. Automobiles have more communication and entertainment options than most homes had just a dozen years ago.
In terms of computing power, the average vehicle now contains the rough equivalent of 50 to 100 small laptop computers in its electronic control units, and these are linked to each other by as many as 10 computer networks. A luxury sedan has between 10 and 15 million lines of embedded software codethe same amount required by a Boeing jet as recently as 1997.
Software and electronics have become the primary areas of innovation for automakers. Some industry analysts have predicted that by 2010 up to 90% of the innovation in this industry will involve electronics, with some 80% of that coming from software. This is both good and bad news for the OEMs.
But first the bad news
It's bad news because OEMs are now scrambling to manage and integrate a huge amount of vehicle content, much of which is outsourced. To get a feel for that challenge, consider the present generation of smart airbags that adjust inflation based on the weight of the occupants and their seat positions. The seats must communicate flawlessly with the airbags even though the seats and the airbag systems come from different suppliers. Other safety features automatically activate when airbags deploy (the headlights flash, the horn honks, the doors unlock, etc.), so other systems must be integrated with airbag operation as well. Imagine the project management effort required on the part of the OEM when a design change is made to any one of these systems.
This is one of the biggest challenges currently facing automakers and their suppliersmanaging the complex relationships between the mechanical, electrical, electronic, and software (collectively referred to as "mechatronics") content of a vehicleand it has become a make-or-break situation. That statement may seem like an exaggeration until you realize that some automakers have opted to remove some electronics content from their vehicles because they haven't been able to manage the complexity it presents! Removing content at a time when customers expect constant improvement in vehicle safety and infotainment is not the way to capture, nor captivate, the market.
Whether they've had to remove content yet or not, all automakers are struggling to manage the new level of complexity in their vehicles. The software pieces alone are particularly problematic, as evidenced by a McKinsey & Company report ("Getting better software into manufactured products," Spring, 2006) showing that 55% of the industry's repair costs derived from problems with embedded software. Automakers are facing a problem they cannot afford to ignore.