Claire is a Content Marketing Manager on PTC's Commercial Marketing team. She creates content in support of PTC products and solutions.
New technologies have always defined the course of the automotive industry—and they’ve come a long way since innovations like Volvo Group's creation of the modern seatbelt in 1959. Today, new mobility technologies are transforming the industry as we know it—and creating new challenges for automakers.
Top 6 challenges in the automotive industry
In the automotive industry, emerging trends and technologies are setting a rapid pace for change and innovation. Software-defined, electric, and autonomous vehicles are rising to prominence and complicating development, fierce global competitors are getting to market faster, and strict regulatory pressures are increasing.
Anticipating and adapting to trends is the key to delivering innovative, high-quality products, meeting customer expectations, and staying competitive in this fast-paced industry. But a few common challenges can make it difficult for some automakers to keep up.
Speed to market for new vehicle technologies
Speed to market is the number one biggest challenge that traditional Western automotive manufacturers face. International competitors are setting a new standard for speed to market and releasing products faster than ever before. This forces automotive OEMs worldwide to innovate more quickly to regain market share.
Accelerating development is crucial but keeping up with industry trends while maintaining quick release cycles puts a strain on resources. Many OEMs are falling behind due to outdated practices and disconnected tools.
Cost management
The need to reduce costs without compromising quality is nothing new, but it remains one of the biggest automotive industry challenges, particularly for suppliers. Increasingly complex development cycles are the biggest roadblock to controlling product costs and reducing failure rates—and automakers can't remove that roadblock without tools made for software-defined products.
Compliance and regulatory pressures
Carmakers are held to strict regulatory standards globally for safety, cybersecurity, and emissions but outdated and manual processes put many OEMs at risk for non-compliance. Managing these constantly evolving regulations is a daunting task and can significantly slow down the development and launch process. Disparate tools and poor communication between teams prevent transparency and traceability, which can lead to non-compliance. This can threaten customer safety, have legal ramifications, and damage the brand’s reputation.
Common regulatory standards include ISO 26262, which defines compliance requirements for functional safety in automotive development, and automotive SPICE (or ASPICE), which outlines best practices for the development of automotive software.
Supply chain disruptions
The automotive supply chain is intricate, with various dependencies, particularly for critical parts. Disruptions in the supply chain can delay production schedules and impact time to market. Manufacturers must take steps to strengthen their position. Sourcing suppliers close to manufacturing facilities can reduce logistics costs, while better communication and supplier management can reduce risk.
Managing software and product complexity
Managing increasingly complex software and product development is one of the biggest hurdles that automakers face in the speed-to-market race. In the age of software-defined, electric, and autonomous vehicles, automakers must manage increased requirements, different development approaches for software and hardware, and the impact of changes across disciplines. Traditional OEMs may struggle to adapt quickly, given their hierarchical structures and long-standing processes.
Development Challenges
A Tech-Clarity survey found that “increasing product complexity” was the top engineering challenge.
Read MoreDigital transformation
In a large engineering organization, ensuring alignment across mechanical, electrical, and software teams is essential for efficient vehicle development. Many OEMs still rely on legacy systems and tools that are inflexible, siloed, and slow to adopt. Labor-intensive, manual processes using tools like Excel impede efficient data flow and constrain team productivity, efficiency, and problem-solving capabilities.
What's next for the automotive industry?
As automotive trends evolve in the years to come, OEMs must have a clear digital transformation strategy so they’re always ready to adapt with industry shifts. Software-driven innovation is the new normal, and ALM and PLM solutions are helping leading automakers accelerate speed to market. Is your business prepared for the future of automotive?
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