Supplier Opportunities Exist in Electronics Revolution

Automotive Industries, August, 2001 by Greg Janicki

It is a scary time to be an automotive supplier. Forget about price give-backs, production slow-downs and consumer fickleness. The real threat is, "Will the part I make today be needed tomorrow?" Fuel cells have every engine component supplier scrambling to determine whether they will have a business in 20 years. However, there is another quickly evolving market shift that we all talk about but are not really sure how it will affect "my" part: the electronics revolution. It is easy to say that electronics will affect all components, but the more important question is whether "affect" really means "eliminate" or "change."

To understand which components electronics will have the most dramatic impact on, you must look at the vehicle in a different way. Traditionally, electronics have been thought of as replacement components: electric steering replacing the steering pump; electronic throttle control replacing the throttle cable; electric brakes replacing the brake booster, master cylinder and lines. While these areas are getting a lot of the publicity, it is not the replacement of components that suppliers should be worrying about -- it is the changing of components that they should be targeting.

Think of it this way: Electronics can replace (hydraulics with steer-by-wire) or add value (anti-trap windows) to a function. In the former case, steer-by-wire actually removes parts from the vehicle. The steering pump and hoses are no longer required because electronics provide steering assist through the motor, control unit and wiring. With anti-trap windows, the electronics do not eliminate components, but instead add a new function to the components already in-place: window regulator, motor, switch, glass. Both cases are somewhat different in that one focuses on modifying how a function is performed (we're still steering the vehicle, just doing it via electronics), while the other is adding a feature to an existing mechanical function (we want to put the windows up, we just don't want to hold the button down ourselves).

The main growth opportunity for suppliers, then, is to use electronics to supplement functions. True, electronics will replace some components -- these will be components "powered" by something other than electricity. You could assume this to mean hydraulics and even the internal combustion engine, but it also includes "human power." In fact, most of the electronics added to vehicles has and will allow people to do less in a vehicle. Think about it. Many of the electronic innovations recently introduced in a vehicle are truly meant to remove human effort: auto-dimming mirrors, automatic temperature control, power sliding doors, rain-sensing wipers, auto-up windows and vehicle stability control. And future electronic technologies will do more of the same: automatic cruise control, passive entry and side obstacle detection (after all, who really wants to take the effort to "look" into a side view mirror.)

This may paint a poor picture of humankind, but in essence, the suppliers that can use electronics to change the way a component operates will find plenty of opportunity in the "by-wire" world.

Greg Janicki

Vice President CSM Worldwide Inc.