Automotive engineering

Automotive Engineering in the Age of Software | Deloitte China

Five Core Capabilities to Close the Readiness Gaps

R&D strategy

By offering strategic options in response to market developments, R&D strategy helps shape the company’s overall strategy and drive its implementation. The results of our readiness assessment show that vendors, on average, are somewhat more advanced in terms of internal R&D strategy and demonstrate greater readiness to respond to changes in the software market than vendors. OEM. The largest readiness gap between OEMs and suppliers in terms of making a business case based on a holistic view of the vehicle life cycle. OEMs urgently need to transcend traditional business cases based on vehicle costs and financially embrace the new digital age.

Other important areas for improvement are partnership management, followed by technology portfolio management and sustainability strategies.

Product & platform

Automakers have largely succeeded in adapting to their customers’ requirements in recent years and have adapted their products and platforms accordingly for hardware-based products. However, as software features become more dominant, automotive players and especially OEMs find it difficult to adapt and adopt changing product and platform requirements. Possible measures include automated analysis of customer needs and regular deployment of OTA features. Even more urgent is the need to separate hardware and software architectures, and the introduction of a modular software approach. In addition, software-specific quality management must extend beyond the SOPs and cover the entire vehicle lifecycle.

Development process

This category contains the most serious OEM readiness deviations. They especially underperform in the adoption of agile methods, essential for the continuous development, production and maintenance of modern software. Transcending the traditional approach to domain-dependent development by decoupling software/hardware development is another major challenge for OEMs. Other important areas include the introduction of unified tool chains and process assurance.

Organization & people

Automakers face significant resource shortages, but it’s not just a supply chain issue. To deal with staffing shortages, they have to fight for scarce SW talent and scale internal training programs at the same time to protect them from market volatility. Therefore, forward-looking talent resource planning and internal training programs are crucial tools to prepare the workforce for the challenges of the software age.

Compliance and regulation

Automotive players are under massive pressure to showcase rapid advances in new technologies, but the slow process of complying with the current regulatory framework often holds them back. Of the five areas of expertise assessed in our framework, compliance and regulation is the single area where OEMs exhibit the highest level of internal readiness. Especially in the area of ​​technical regulation, which will be of major importance in the future. OEMs and suppliers still manage data governance pretty well. The subject of environmental regulations should be of particular concern to suppliers, as they are significantly worse than OEMs when it comes to preparation.

Preparing for the advent of software

Although some OEMs and vendors have already begun to invest heavily in software capabilities, IT architecture, and partnerships, there is still a long way to go according to the results of the study. OEMs and suppliers need to act quickly to identify their key strengths, set medium- and long-term goals, and develop action plans to stay competitive. The future is bright for software-driven automotive R&D.