Automobile

The new love triangle: Automakers, suppliers … and tech companies

“We see the industry evolving to where there are a number of digital platforms that come with their own unique innovations that can then come together to meet the needs of the industry,” said Sanjay Ravi, general manager of automotive, mobility and transportation industry at Microsoft. “It’s less about all of us going out for a very constrained innovation opportunity. It’s about expanding the innovation that we all can bring to meet some of the safe, sustainable and productive needs of mobility in the future.”

Ludes said the new partnerships with tech companies will not make the traditional automaker-supplier relationship obsolete.

Auto companies will still need the hardware expertise that suppliers possess, he said.

“ZF, for example, is obviously producing components for big OEMs and will continue to do so in the future,” he said. “So if they’re partnering with tech companies in this domain to connect their factories, to address smart factories and make their processes more efficient, that will only benefit the existing partnerships with OEMs.”

By partnering with tech companies, suppliers and automakers also see the potential to create new business as the industry electrifies. Margins on EVs are likely to be lower than on many gasoline-powered vehicles, putting pressure on companies to find new ways to generate revenue.

“It’s a new value-creation opportunity where traditional companies don’t have the biggest presence,” Ludes said.

ZF’s Fischer said to expect more collaborations with tech companies in the future.

“There aren’t any more of those strict boundaries,” he said. “To the contrary, the better we can overcome those boundaries, the better those solutions are going to be.”

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