Defining Automotive Engineering Services
Automotive engineering is a key branch of engineering that combines mechanical, electronics, electrical, and software, among others, for overall vehicle engineering. The industry has gone through a sea-change from its inception, assembly-line production to the modern-day car. Over the years the automotive vehicle engineering has gone through transformation primarily from an overall design point of view. But in recent times, with the advent of new-age mobility, i.e., CASE (Connected, Autonomous, Shared mobility, Electrification), the industry is also going through structural change. To describe the complexity of the modern car, it is often said that a modern luxury vehicle has more lines of software code than a fighter jet. The scope of engineering is now also beyond traditional design, testing, and launch to strict emission rules, country standards, and complex supply chains. As vehicle engineering has been becoming complex, we are observing the proliferation of specialized players in the market. Also, the software aspect has become more critical for the success of vehicle launches. Typically, OEMs are well versed with the hardware aspects of vehicle engineering; thus, they also had to establish an internal software technology division along with exploring the opportunity of outsourcing. This has created both challenges and opportunities for the technology service providers to cater to this new outsourcing trend.
Here we will discuss key aspects of the overall automotive industry, vehicle engineering, and outsourcing.
Key players in the automotive industry:
Typically, a vehicle has 30,000+ components that come from different players. Overall, the two key primary segments in the automotive industry are OEM (Original equipment manufacturer) and Suppliers.
- OEMs: Enterprises that are involved in vehicle manufacturing and selling to the customers. Some of the leading players are Toyota, Volkswagen Group, General Motors, Ford, Honda, SAIC, etc.
- Suppliers: Enterprises that are involved in manufacturing vehicle parts/ components/sub-systems. They are typically aligned and close in collaboration with the OEMs. Typically, suppliers are classified as Tier-1, Tier-2, and so on. Tier-1 suppliers are directly involved with the OEMs for components supply, whereas Tier-2 suppliers work with Tier-1. In some cases, Tier-2/Tier-3 suppliers are also involved with business beyond the automotive industry.
- Regulatory Bodies: Includes key regulatory bodies (international, regional & country-specific) for safety, emission, and component (hardware & software), among others—for example, European Automobile Manufacturers’ Association (ACEA), AUTOSAR, etc.
- Others: This includes ISVs, specialized hardware players, etc.
Automotive segmentation by types of firms:
Below is the segmentation of firms catering to different vehicle types and extended automotive value chain. There are specialized players in each of these segments, but some of the leading brands cater to several segments of the below.
- 2/3 Wheelers
- Passenger Cars (Mini, Light, Compact, Medium, Heavy, Sports utility vehicles (SUV))
- Commercial (LCV, MCV, HCV)
- EV Battery, EV Fuel Cell
- EV Charging Firms
- Auto Retail
- Technology Start-ups catering to automotive
- Other Services including Shared Mobility, Fleet Management, etc.
Automotive engineering segmentation by components:
Some of the key automotive segments are highlighted below. Most of the segments are still dominated by mechanical engineering, but the application of embedded engineering has increased over the years.
- Interior: This segment is often linked with customer experience management. It involves Seat, Cockpit, and Trim, among others. Some of the OEMs also provide customization options to buyers for high-end cars.
- Body: Includes components like BIW, Doors/ Gates, Exteriors, Lights, Visibility, Roof. This segment is closely linked with the interior, powertrain, and safety systems.
- Chassis: Includes components like Brake, Steering, Axle, Suspensions. This segment is fundamental for vehicle engineering as it supports the power system, vehicle design, weight, and control system, among others.
- Powertrain: Key focus areas include Engine, Transmission, Exhaust. Some of the key compliances in this area are AUTOSTAR and ISO 26262.
- Electric/ Electronics: Includes vehicle electronics system related to safety, control, and convenience, among others. The primary components in this segment are Infotainment, Displays, Control Systems, HVAC/ Cooling.
- ADAS: Encompasses different aspects of autonomous driving, including Cruise Control, Blind Spot Detection, Parking Assist, Drowsiness identification, Night Vision, Lane Depart, etc., related to algorithm development and validation. Also, it includes simulation to validate the efficacy of the algorithm.
- Other Systems: Typically involves solutions in IoT-enabled connected vehicle areas such as Software Fleet/ Mobility, Connected Car, Remote vehicle health check-up
New age Mobility – CASE (Connected, Autonomous, Shared mobility, Electrification)
The future trend of the automotive industry can be summarized through the CASE acronym. Some of the tenets of CASE have become a standard feature for the cars, and in some cases, it is a new offering for the OEMs/suppliers and the proliferation of new players. For example, the connected car is becoming a standard feature for the automotive industry.
- Autonomous: OEMs typically have a separate division for the autonomous car segment. In some cases, OEMs are collaborating on autonomous car programs. Internet players are also working on the autonomous car segment.
- Shared Mobility: Started by Uber, shared mobility has become a key theme across the globe. Some of the other regional shared mobility players are Lyft, Ola, etc.
- Electrification: EV has gained a lot of momentum in recent months from customer adoption, government incentives, and emission regulation point of view. The OEMs have already started launched EV models. As EV fundamentally changes the vehicle (in terms of components, fuel, etc.), the structure of the automotive industry is also changing. For example, a new set of suppliers are coming up (particularly from the battery management point of view) besides the traditional ICE component manufacturer. We have seen a proliferation of dedicated EV OEMs like Tesla. Oil & Energy companies are also installing EV charging stations (for example, TOTAL).
Automotive engineering services opportunity:
Engineering service providers can focus on the key segments of automotive engineering as mentioned below.
- New Product Development (NPD): Includes vehicle design from the concept phase to the production stage. Some of the critical aspects of NPD are concept, design, styling, packaging, and simulation, among others. OEMs are typically looking for a customer-centric design with improved performance and shortened product lifecycle.
- Product Sustenance: Involves value engineering, variants & customization, product optimization, and engineering change management, among others, for product sustenance.
- Manufacturing Support: Involves processes for manufacturing operations, includingsupplier qualification/ parts transfer, tool design, prototype support, and shop floor services, among others. Concepts and best practices of smart manufacturing are also applied in manufacturing support services.
- Testing & Certifications: Includes testing and validation services, including reliability testing, noise, and vibration, structural dynamics testing, etc. Certification support includes safety certifications, homologation support, etc.
- Services: Involves the software aspects of the vehicle that enables a better value proposition to the clients with the scope of value-added offerings such as Fleet Management/ Mobility Services, Analytics, IoT/ Predictive Maintenance.
- Software Implementation: Includes the software implementation and support related to vehicle design and manufacturing. The example includes PLM &MES Implementation & Support. Nowadays, automotive enterprises are looking for PLM-MES-ERP integration for more control and visibility of the design, operations, and supply chain.