We have been looking at the ways in which novel automotive technologies come to market. This is the first of two interviews with automotive engineering businesses setting out their perspectives on how Tier One suppliers evaluate which technologies to back. Here, Matthew Beecham asked John Fuller, technology director, Torotrak for his thoughts on this area and what smaller technology businesses must do in order to tick all the boxes for those suppliers.
As we see it, due to the pressures of the 2020 regulations vehicle makers and Tier Ones can no longer bring new technologies to market fast enough. Whereas VMs have increasingly relied on Tier Ones for things like fuel injection and turbochargers, now the Tier Ones need the same sort of relationships with small innovation businesses. So they need to have development relationships with innovation companies who are doing the things that Tier Ones often don’t do anymore. Consequently, there is an opportunity for small innovation businesses to validate these technologies and then take them to the Tier One ready for the next stage of investment.
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From your perspective, how do the Tier One suppliers evaluate which technologies to back?
Tier One suppliers, like any customers for new technology, evaluate the potential benefits against the potential risks. The challenge for them is in securing information of sufficient breadth, depth and quality to separate the ‘winners’ from the ‘losers’ in a reliable way. They operate in a complex business environment, where investment in future technologies is influenced by legislation, vehicle market trends, external competition and their own strategies for future business direction. This means that any candidate technology must not only provide competitive advantage but be relevant to the particular organisation. It can be difficult to demonstrate these qualities convincingly during the early stages of technology incubation.
What can the smaller technology businesses do in order to tick all the boxes for the Tier One suppliers?
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The design-and-simulation-only approach, common in small, innovative technology companies, reduces investment requirements and allows the company’s resources to deliver highly leveraged benefits, but often fails to provide potential customers with the necessary confidence.
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By GlobalDataTorotrak has evolved its business to take innovations beyond the concept stage with robust, application-specific development and validation so that the business case for the manufacturer is more easily demonstrated. By investing in prototype platforms and low volume manufacturing capabilities, we have made it easier for global manufacturers to develop a high level of confidence in our technologies.
Through combining technology innovation with near-market levels of readiness, we enable our customers to bypass the higher-risk early stages of technology development, and feed validated technologies into their development process at a point that is much closer to volume production.
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The remainder of this interview is available on just-auto’s QUBE research service
