Suppliers Compete For New Four, What Is The Line?

- Oct 31, 2019-

The wave of “new four modernizations” of automobiles has come to the fore, and it has brought a severe transformation test to the traditional OEM. As the industry chain goes up, Tier1 suppliers are also faced with the challenge of adapting to the development trend of the industry and adjusting the corporate strategy. Major component manufacturers have been involved in the transformation and are striving for transformation.

 

New energy: Say goodbye to internal combustion engines, main attack and electrification

 

At present, countries all over the world are gradually introducing strict carbon emission control policies. The cost of R&D and manufacturing of internal combustion engines is increasing day by day. China has also started research and formulation of the exit schedule for fuel vehicles. It is inevitable that internal combustion engines will go down the historical stage. During the Shanghai Auto Show in April this year, the Continental Group announced that it will gradually disengage the internal combustion engine technology from 2040 and strive to achieve zero emissions by 2050. The "Farewell Declaration" of the internal combustion engine is not only an active response to the development trend of the industry, but also a practical consideration for controlling costs.

 

In the field of power battery, the core component of new energy vehicles, the Ningde era and the BYD oligarchy have been formed. The two market shares total more than 60%, and the traditional Tier1 manufacturers have lost the opportunity of research and development. Auto parts supplier giant Bosch simply gave up the practice of self-made power battery units, chose to purchase the battery unit of Ningde era, and then integrated its relatively mature battery management system technology and system integration capabilities to provide complete battery system products.

 

Bosch and Ningde era cooperate to launch high-performance batteries of designated categories (picture from Bosch official website)

 

The Continental Group will focus on the electrical system. Enterprises will take advantage of 48V electrification and high-efficiency technology, motor and power electronics technology for hybrid vehicles and pure electric vehicles, avoiding the power battery heat battlefield, and "swords going to the front" to develop electrical systems - the differentiation strategy will become high Smart play style.

 

ZF's transmission technology is well-known in the industry, but with the phasing out of the internal combustion engine, its old advantages will gradually weaken. The development of the new energy automobile industry is in the ascendant, and the electric drive market is still a blue ocean. The transformation focus of ZF has also fallen into this field. Recently, ZF and Daimler have cooperated to provide EQC with drive units, including motors, single-pole gearboxes with differentials, and power electronics. This milestone collaboration confirms ZF's determination to transform and is a testament to its success.

 

New technology: automatic driving, the intelligent network of eight parties layout

 

Walking upright liberated human hands and made labor and creation possible. Autopilot will gradually liberate the driver's body and mind, allowing people to have more time and energy to work and enjoy life. Therefore, the realization of autonomous driving is tantamount to another evolution for human beings. The automatic driving landing needs to go through two technical paths: one is that the vehicle itself completes the perception of external information-decision-execution, and the other is to realize the information communication between the vehicle and the driver, other vehicles, road infrastructure and other traffic participants. Intelligent network technology plays a key role in this.

 

Traditional parts suppliers have entered the field of automatic driving and have inherent long-term hardware development, but they are often weak in software development. As the Top1 of the Tier1 manufacturer, Bosch has shown the full development of the "Top Student". Bosch is involved in the development of hardware such as sensors, controllers, actuators, etc., and is able to develop software systems for automatic driving from L1 to L5. Compared with other component manufacturers, the conditions for the coordinated development of Bosch's hardware and software capabilities are mostly "early departures." In 2011, Bosch began to study the driving assistance functions such as ACC and LKA. In 2018, its L2 system has appeared on Geely Borui GE and Great Wall VV6. It is expected that by 2020, Bosch will launch L2.5. Level highway auxiliary system.

 

As we all know, 5G has the characteristics of low latency, high bandwidth and high reliability. Using 5G to empower the in-vehicle intelligent network system will make information transmission faster, more efficient and more accurate. At the Consumer Electronics Show in Asia in June this year, Continental said that the company has developed a 5G-hybrid-V2X solution that integrates 4G and 5G network access technologies while integrating dedicated short-range communication technology and cellular Network V2X communication technology, so the communication standards adopted by different car companies are compatible, reducing the complexity of V2X application across regions. Partners such as Vodafone, Docomo and China Unicom have already reached cooperation with Continental, and will assist Continental in the full deployment of 5G in major markets around the world.

 

Continental Group's 5G-hybrid-V2X solution features (picture from mainland China's official website)

 

It is worth noting that players in the new field of automotive technology are no longer limited to "circle people." Huawei has already announced that it will not "build cars," but recently established the Smart Vehicle Solutions Division to set itself the goal of becoming a Tier1 supplier for automotive electronics. At present, Huawei has released products such as 5G baseband chip Baron 5000 and the first commercial C-2X solution RSU. For traditional parts suppliers in transition, Huawei's entry has created more opportunities for cooperation, but it also hides the tension of competition.

 

From the time of the revolutionary era of the entire automotive industry, the tide of electrification, networking, intelligence, and sharing is unstoppable. It is not easy for traditional Tier1 manufacturers to achieve "gorgeous turn" in this transformation. Major traditional parts suppliers are rushing toward new energy and new technologies, giving full play to their own experience and technical advantages in related fields. At the same time, they have joined forces with their partners to fill shortcomings and paving the situation and embark on the fast track of transformation. However, the uncertainty brought about by the industry changes itself and the potential competitive momentum of new players are worthy of continuous attention from all industry participants.