Technology -- not quality -- will be the driving force for the automobile industry in 2010 and the near future.
A survey of 200 automobile executives around the globe concluded that this year -- and probably for at least the next couple of years -- the industry will focus on pushing the technology envelope, dwarfing environmental, quality and cost-cutting issues.
The annual survey conducted last fall by Swiss-based management consultants KPMG LLC, concluded that technology will weigh heavily in manufacturers' decisions regarding product, production and business. Everything from propulsion (hybrid, electric, natural gas and so forth) and in-vehicle electronics to assembly-line robotics, as well as mergers and acquisitions will be affected by the goal to advance technology and create products reflecting that technology.
According to the KPMG findings:
- Companies are shifting focus from quality improvement to new products.
- Total affordability and pricing are seen as less important than innovation.
- Environmental concerns fell in the ratings for first time in three years.
With the number of recent recalls, some might argue that quality should be job No. 1 for carmakers. However, conventional wisdom within the industry is that the huge quality gaps that once existed between vehicle brands have been nearly eliminated.
Doug Newcomb, technology editor at Edmunds.com, summed up the carmakers' rationale for emphasizing technology over quality this way: "This doesn't surprise me at all. Cars are on parity when it comes to fuel economy, quality and other issues. When you shop for a midpriced sedan, they are all pretty close. Technology often tips the scale."
Vehicle manufacturers are in a mad scramble to push their products to the forefront of consideration by the ever-expanding wave of techno-savvy consumers. Newcomb believes a vehicle's capability to seamlessly integrate personal electronic devices, such as iPods, laptops and cellular phones, will be the basis for many consumers' future vehicle-buying decisions. It's why he thinks high-tech features are finding their way into vehicles at all price points rather than just more-expensive luxury models.
Ford's voice-activated Sync system is Newcomb's favorite example of what we can expect future in-vehicle technology to look like. Sync is a connectivity system that can integrate Ford's voice-activated Sync system, Bluetooth phones and USB drives. It can also provide turn-by-turn navigation, 911 assist, real-time traffic and even the weather. According to Newcomb, its best feature is that it's upgradable.
He expects the "apps" craze to find its way into vehicles as well. "Vehicles will be connected to the outside world," he says. "The car companies that are planning for technology and working on it are going to do better."