Automotive OEMs Maximize
Control of the Value Chain

Automotive OEMs are positioning themselves to ensure that they maximize control over the value chain. Many major OEMs are making investments to bring as much of the connected car technology stack in-house as they can. This includes creating their own proprietary telematics platforms, developing their own insurance and mobility services, and making large investments in companies that focus on autonomous driving. Traditionally, OEMs have seen the other players in the value chain largely as suppliers and not partners. Each player has its own niche and the OEM will decide which provider fits into each niche. 

But the fact that OEMs seek greater control over the connected car solution stack does not ensure that they will succeed, nor is this necessarily the optimal approach for them. The growing complexity of technologies and of the overall ecosystem that the journey to autonomy demands will require OEMs to work more in partnership with other market players. This is critical, if they wish to successfully leverage the new opportunities around connected car data and to bring new offers to market in a timely and economically viable fashion. Further, the automotive market is at a major inflection point. Not only are connectivity and autonomy major trends, but also electrification and advanced human machine interface (HMI). OEMs are having to make major investments and bets in all of these areas. As so much changing, OEMs will need to more heavily on suppliers and partners. 

With the emergence of technologies such as 5G and AI, there are opportunities for technology players and service providers to expand or enhance their roles, though this must be done within ecosystems (that include the OEMs) and not in isolation. As cellular vehicle to infrastructure (CV2X) becomes a global standard, OEMs will need to work with CSPs, SIs and cellular infrastructure providers to ensure that systems are safe and reliable. OEMs will also need to work increasingly with CSP on network rollout planning. 

5G rollout is a good time for CSPs to reassert themselves as crucial partners in the eco-system. OEMs have benefited from CSP competition. Because automotive connections can have a retail component (Wi-Fi and content), OEMs will often demand extremely low wholesale rates in exchange for the CSP having the chance to pursue these relationships. 5G could prove to be a key differentiator for some CSPs. In its early stages 5G will not be a commodity, it will be a differentiator. OEMs that want to establish themselves as leaders in autonomous driving will need to partner with the CSPs that have the most robust networks. CSPs should leverage their 5G strength to ensure that in the future, the relationship is more similar to a partnership than a supplier relationship.