US Passenger Vehicle Original Equipment Manufacturers Advanced Driver Assistance Systems R&D Strategies, 2030

The Impact of the Top 3 Strategic Imperatives on the Advanced Driver Assistance Systems Industry

Industry Convergence

Why

• The industry value chain is transitioning from the traditional pyramid form to a flat structure.
• Technology developers work with original equipment manufacturers (OEMs) and tiered suppliers to develop, validate, supply, and integrate advanced driver assistance systems (ADAS) features into vehicle platforms.

Frost Perspective

• The emergence of connected, autonomous, shared, electric (CASE) mobility and the growing use of software in vehicles urge the automotive industry to accommodate multiple technology participants in the value chain.
• These participants entering the market work with OEMs and conventional Tier I and Tier II suppliers at different technology development and deployment stages.

Transformative Mega Trends

Why

• Congestion, emissions, safety, and shifting customer preferences disrupt the automotive industry in terms of commuting patterns, cleaner technologies, and advancements in safety systems. These factors reshape vehicle design and business models and drive innovation and regulatory changes in the industry. The shift to these market dynamics converges CASE into a Mega Trend.

Frost Perspective

• CASE is not new to the industry, but changing dynamics amplify the need for convergence.
• OEMs will need to shift toward CASE convergence. They will see returns on their investments by the end of the decade, with new business models developed because of this Mega Trend.

Competitive Intensity

Why

• Costs, regulatory compliance, and competition are at the base of OEMs' introduction of higher ADAS and automated driving (AD) convenience features in new and existing vehicle models.

Frost Perspective

• In the next 3 years, technology participants and OEMs will push convenience features—such as adaptive cruise control (ACC), autonomous parking, and level 2 (L2) and L2+ piloted driving—into the market in optional bundles.
• These features will use the same sensor suite to meet the growing regulatory compliance within the next ten years.

Key Takeaways

• Many passenger vehicle (PV) OEMs offer L2+ ADAS features in their flagship premium models as a distinguishing value proposition. For example, OEM packages offer hands-off highway assist, such as Ford BlueCruise, GM SuperCruise, and Nissan ProPilot Assist 2.0.
• Few OEMs offer certain ADAS features, such as the Ford Driver Alert System and Speed Sign Recognition, which are absent in many OEMs' models. These differentiators can grant an advantage over the competition.
• Some OEMs' ADAS R&D could take a completely new path as they establish new partnerships. For example, Nissan moving away from its Renault alliance could result in a new direction, such as extending its joint efforts with Geely.
• Some OEMs will drive down costs and improve vehicle performance through the mass adoption of any ADAS feature. For example, Toyota and Hyundai do this in an attempt to achieve the safest vehicle recognition for their internal combustion engine (ICE) and electric vehicle (EV) models.
• Over-the-air (OTA) updating is a game-changer for any OEMs that seek to push new ADAS features in an effort to constantly differentiate their EV products. ICE models may see little in this regard, as OEMs could limit OTA adoption to EVs.