Andrássy University, 24th January 2019
Our colleagues in Budapest proudly welcomed over 100 delegates to the “Automotive in Transition Conference” at Andrassy University Budapest last week. Co-hosted with the University and Swisscham Hungary, the event focused on key facts and predictions about the future of the automotive industry for suppliers, with key experts from the industry sharing their experience and the latest developments in the transition to autonomous vehicles.
The conference focused on the future changes of the supplier side of the automotive industry and was divided into two blocks. The first part revealed interesting facts and predictions about the changing business model along the value chain on the suppliers’ side, while the second part explored the main practical challenges of digitalisation, including potential legal issues and risks.
The guest speakers represented the biggest corporate players connected to the automotive industry and its current transition in Hungary: Minister László Palkovics, Ministry for Innovation and Technology, Ágnes Halász, UniCredit Bank Hungary, Imre Kovács, Siemens Industry Software, Jens Brüning, Continental, Zoltán Szekeres, SAP, Taira-Julia Lammi, ABB, Martin Wodraschke and Márton Domokos, CMS and Tamás Kerecsen, NNG.
Dietmar Meyer, Rector of Andrássy University, stated that information technologies and digitalisation are transforming our everyday life and the automotive industry is undergoing a major transformation which raises a number of questions.
All guest speakers agreed that cars will be connected, automated and electric in the future, and they must be controlled and regulated in an efficient way. The traditional combustion engines will be replaced gradually by electric and hybrid motors, which will affect the production processes and the entire value chain in the industry. The demand of consumers will also change in the coming years, the younger generations, especially in bigger cities will probably prefer living in a sharing economy, where less people own a car and where new products and business ideas will appear.
Most of the presenters emphasised that while digitalisation provides opportunities, it also presents challenges for the car industry. “The spreading of autonomous cars can result in less accidents and more efficient delivery” – as Minister Palkovics stated. Artificial Intelligence offer new ways of producing cars, where data will have a key role – therefore protecting personal data and cybersecurity play an important role. According to the experience within global companies, a mind-set change is necessary for a successful transition.
There are many global challenges affecting the means of car production, and the automotive industry has to adapt to them. The so-called “Digital Twin” technology grants new possibilities to modify the way of production in the whole value chain. New cloud-based service solutions can be a successful way to enter the digitalised economy. Costs and prices will also be a burning topic as the newest ”smart cars” are equipped with hundreds of different sensors and therefore production costs are likely to be higher. This can seriously affect sales numbers and consequently be a challenge for the industry – as not every consumer can afford premium cars. Through a closer cooperation between the automotive industry and high-tech companies, the development costs can be lowered. Ethical and liability issues were also an interesting part of the conference. Software engineers have to make important ethical decisions and need a regulation with a code of ethics. Further it has to be discussed how the liability regime for AI deep learning systems should be formed in order for society to take full advantage of the innovative benefits.
The automotive industry has to adapt to changes on all levels of the value chain. If market players do not embrace the changes they will not be able to keep up with the ever-accelerating innovations into the future. It was confirmed by the speakers that due to the large existing automotive industry and highly skilled workforce, Hungary has good opportunities to emerge stronger from the transition process.