Reinventing the wheel: How car companies are adapting to the future

Are car companies becoming tech companies? Read on to explore how automakers are creating an entirely new mobility ecosystem

In an illustration, a man views a futuristic car cutaway.

Mark de Wolf

May 12, 2022

min read

Are car companies becoming tech companies? With software already reprogramming the automotive sector from design to manufacturing, the question might already be answered.

The auto industry is in a state of extreme flux, with every link in the value chain being transformed by a powerful set of disruptors, all converging to create an entirely new mobility ecosystem.

It’s a big statement, but the evidence is undeniable. Today’s carmakers face a not-so-distant future that's being hammered into shape by mega-trends like electrification, digitization, sustainability and emission standards, connectivity, VR, and AI.

Together, they’re setting the stage for immense innovation that could bring huge growth to an industry that already provides direct and indirect jobs to 13.8 million Europeans.

Assembly lines of code

Underpinning everything is the embrace of technology that makes vehicles - and the processes that create them – far more responsive to changing consumer and industrial use cases.

In the digital age, drivers and passengers expect the same degree of connectivity from vehicles as they do from their homes and offices. Smartphones, laptops, tablets, wearables and onboard systems should all link up seamlessly. That includes everything from infotainment to assisted driving and smart parking, where payment options are accessible from a touch-screen dashboard.

What does that mean for manufacturing processes? In the future, a digital component will likely need to be added to everything an automaker produces, enabling automotive industry leaders to build better car designs catered to the needs of specific driver personas.

Designers and engineers will need to gather data using new VR design tools that blend immersive visualization with haptic feedback, allowing them to feel exactly how comfortably their designs will play out in real life.

Virtually by hand

Speaking at Autodesk’s Automotive Innovation Forum in April, Nissan Senior VP and Head of Design, Alfonso Albaisa, said the company is already using advanced design tools to ‘humanize virtual experiences.’

Under COVID restrictions, he and his global design team have been able to meet in virtual studios to collaborate on new car models, their avatars moving from vehicle to vehicle, sitting behind steering wheels and manually manipulating rear-view mirrors, altering components, or suggesting alterations.

“As designers, we want to get inside new designs and experience them as soon as we can. These design tools create an environment where more natural and spontaneous communication can happen, which is vital for the creative process.”

This new level of digital capability needs different skillsets, from engineering to sales and aftermarket service, up in the design studio and down on the factory floor.

As technology tightens its grip on the industry, it’s critical that the automotive workforce develops the right skills and has the latest digital tools. To attract and keep talent, everything needs to become digitized to reflect the needs of the more mobile, interconnected home and office environments that have come with the rise in remote work.

Automakers need more coders, and cars need more code

“Today’s car infotainment systems use more than 10 million lines of code,” said Audi’s Member of the Board of Management for Marketing and Sales, Hildegard Wortmann, speaking at NVIDIA’s GTC21 event this year. “That’s as much code as an entire vehicle needed just a few years ago.”

Traditional auto manufacturing leaders are adapting to software’s exploding prominence in different ways.

Some manufacturers are partnering with established software vendors to take advantage of cross-industry expertise and apply it to their own needs for design, fabrication, and assembly. Others opt to vertically integrate, building entire divisions devoted to creating custom code suited to their cars and customers.

One thing is certain: adapting in the right way is crucial. McKinsey research shows that top software companies report throughput and quality that is three to six times higher than that of bottom-performing competitors: a far bigger productivity difference than the one between hardware developers. That means that integrating software into a business needs to be done correctly, in order to bring huge rewards.

But can an automotive business really act like a Silicon Valley unicorn? Volkswagen clearly thinks so. The company has just launched its new CARIAD software division. With plans for 10,000 employees, the unit's headcount will make it the second-largest tech company in Europe, second only to SAP.

The agile automotive business?

Whether automakers mimic tech companies, partner with established vendors, or build their own software, the imperatives of digital mean they’ll have to come to terms with new notions about product lifecycles.

Carmakers are used to a linear process where products are developed gradually over years before being unveiled to the public. In software, one year can represent two or more releases.

That’s because tech products progress under a process of continuous improvement. Vehicles and components need to reflect this by undergoing continuous improvement.. Otherwise, automotive manufacturers run the risk of launching vehicles that feel out of date the moment they leave the lot.

All of that will have a severe impact on complexity — and cost. The driverless cars many industry watchers believe will be in mainstream use by 2030 are a case in point.

Removing the need for a human driver might seem like an opportunity to simplify and optimize car designs. But the new hardware and software needed to automate the vehicles will raise the capital costs of building them.

It’s a tech sector truism that, very often, the challenges thrown up by the application of technology are answered with calls for more technology. The automotive industry needs to act fast through digital transformation, and investments in tech must be focused on solutions that unify design, manufacturing, sourcing, sales, and service.

The lessons from other sectors suggest it’s the only way to uncover synergies and efficiencies — even as products and customers’ digital expectations continue to evolve.

Mark de Wolf

About Mark de Wolf

Mark de Wolf is a freelance journalist and award-winning copywriter specializing in technology stories. Born in Toronto. Made in London. Based in Zürich. Reach him at

Recommended for you