Is Silicon Valley the New Capital of Automotive?

CES, the largest consumer technology show on the planet, is the place to introduce new technology and show off gadgets. Among the many firsts at this year’s show, one caught my eye, the record number of automotive manufacturers vying for the lead in technology.

Carmakers are not new to technology, but statistics show a trend these companies cannot ignore: a record number of consumers site in-car systems and technology as a top consideration for their purchase. In fact, during a PCMag interview at CES, Ford CTO Paul Mascarenas said, “We have data that shows more than 50 percent of people buying new cars say that Sync was one of their key priorities, along with fuel economy and safety.”

The last time I checked, a car was for transporting passengers from point A to point B. What would the pragmatic Henry Ford say about this phenomenon?

I think relaying a recent story from my life will underscore how fundamental this shift is. I have a very technology-savvy friend who loves all practical, elegant, high performance technology products. One of his interests is automobiles; he has purchased somewhere between 15 and 20 new vehicles in his 24-year driving history. Lotus, Audi, Ducati, Acura, Honda, and VW are some of the brands he has owned. Another key statistic: not one of his many vehicles was American-made.

Ok, now that I have laid the groundwork, on to the story. I called him a few months ago and shortly into the call, I inquired where he was. His reply: “I am driving in my new Ford Explorer in Orange County, CA.” When I had regained my senses, many questions flashed through my mind. What happened to him? Did he win this vehicle in some raffle? Had someone subjected him to some mind-altering brain washing exercise? When I asked him how he could have possibly purchased a Ford, his reply was, “In my opinion, Ford’s technology is years ahead of all others in its class, including BMW, Acura, Audi. Ford Sync is very, very impressive!”

Technology not only swayed him to purchase the vehicle, it actually overcame a very significant negative bias. The software won him over. In that same interview with PCMag, Mascarenas said about the role of software in vehicle innovation, “So much of it becomes software-based. Look at Auto-Park Assist, the technology that will automatically park your car for you. Delivering Auto-Park Assist is all software, it is all about the algorithms. Everything else is already in the car—the cameras, the radar, the power steering, the power train. You just need the software to make it work.”

The role of software is huge in modern vehicles, and no more true than in the world of hybrid and electric vehicles. Fisker was there at CES with its incredibly cool Karma. This car oozes with software. The crystalline drive selector, 10.3 inch center dashboard touch screen, virtual instrumentation panel from Visteon, TomTom software navigation integrated into the infotainment system, and drive mode selection from Sport to Stealth modes are all very software-intensive systems that make the car what it is.

Technology and software are key drivers in automotive and there is no evidence that this trend will end anytime soon. At the recent Detroit Auto Show (NAIAS), the top automotive companies were joined this year by several technology companies such as Tata Technologies and Schaeffler Technologies as further evidence of this trend.