I worked for Tier 1 suppliers in the past: first Delphi from 1996-2005 and then Siemens VDO from 2005-2007 and have worked with manufacturers all over the world but mainly in Asia.
I left automotive in 2008 because of the aversion to innovate, but ended back in automotive in 2016 on working with a regulator to support a plan towards deployment SEA Level 4 autonomous vehicles. At the moment we see a rapid expansion of these deployments (still trial), mainly of Chinese developed vehicles.
When I started in 1996, the Delphi Luxembourg team was very happy we transferred the Engine ECU program for Daeweoo from Luxembourg to Singapore. Korean customers were too demanding and they rather worked with European customers at a lower pace.
For a long time we were left alone by both Europe and the US because nobody was interested in the Asian market. Asian Customers were too difficult and there were easier pickings within the GM family (del[phi was a part of GM till 1999, but GM was still the main customer till 2005).
In 2000, we started development of an Engine ECU specifically for the Chinese market. It was based on an Opel product, but we had a BOM 1/4th of the Opel BOM, simplified the software and most importantly, used the latest chipsets. That was not possible for European, American and Japanese customers as they saw it as a risk, but for Chinese customers, how we got there was not important, just it had to do what it needed to do and at the lowest cost.
The product met the latest emission standards, the engine started at -40degC (all our other markets were -30degC), it was tested at 5500m altitude in Tibet (no other car was tested above 3500-4000m) and there were no problems in Xinjiang at 50 degC. On top of that it was rock solid: the highest reliability of any Engine ECU in our product line. We had more than 60 car manufacturers as customers, most are gone but some of the big ones like ChangAn, Dongfeng and Chery are still around.
I left Delphi because it got in financial problems and suddenly all US high level managers started to interfere with our programs as we were the only region making profit and they wanted to show that they were working on profitable Asia projects. My work-life balance went to hell.
I really liked working on China projects as they were so dynamic and we could see that once they matured, they would cause a huge problem to the rest of the world. One simple example gif China dynamics: in December 2003 we were informed that all cars sold in Beijing after 1 July 2004 must meet the latest EURO emission standards to ensure clean skies during the 2008 Beijing Olympics. First response by us: "this can not be done". Reply from government: "The Olympic Games are important, your car sales are not. If you cannot do it, you're out of business". 6 Months later every supplier and car manufacturer had only clean cars for sale, and it turned out that the effort was far less than estimated (the basic engine was good enough, it was some sensor changes and and better calibrations but nothing major).
I joined Siemens VDO in 2005 working on global Radio-infotainment platforms and mainly working with European car manufacturers and I hated it.
We needed to do everything as cheap as possible. When the iPod came out, they wanted to do to have the same functionality but based on MP3 CDs, but it also had to behave like a cassette player in the older car models, and it had to do it with a cheap microprocessor, starved of RAM and ROM.
I made on the cheap a prototype of a 2cm thick large display digital radio without CD but with bluetooth for streaming and phone based voice recognition and dialling, all low cost, low weight and very efficient and showed its at 2004 CES. I got criticised by all the Germans that this was not what the market wanted. In 2017 or so CES, Continental (which had taken over Siemens VDO in 2008), showed a similar concept and advertised it as the next best thing. I messaged my ex-boss with the question why it took them 12 years to copy my work and all I got was a "sorry".
In the last few years, I also had the pleasure to host a leadership program from a German car manufacturer for 3 years in a row. Attendees were management at VP level or up, or being groomed for that level. The reason for visiting Asia was that the company realised that too many of the German leadership thought that the world ended at the German border and all international markets were like Germany. When I explained the journey towards a "car-lite" Singapore (make private cars unnecessary by improving public transport), they actually get angry and aggressive. If it is not like Germany, it is wrong even though our context is totally different... I find that always fun as it is quite predictable.
I have seen the same behaviour by European government officials. One of them questioned why Singapore dropped 100% EVs by 2030 target and replaced it by 100% clean (EV or Hybrid) target by 2030. This was changed around 2019 because they realised the vehicle supply and charging systems pipeline might not be sufficient to meet the original 100% EV goal. The Dutch official replied that in Holland that 100% EV target was not a problem. When I asked the official why, it was "in is in the policy and I wrote the policy, therefore it will happen". Now it is pretty clear that it will not happen.
My next car is most likely a BYD or a Deepal (ChangAn).
When I worked with Daewoo in 1996, no way I would have bought a Korean car, especially a Kia. Now, no concerns at all with Korean cars and for me personally, Kia styling, features and price points are the most attractive.
When I started working in 2000 with the Chinese carmakers, I would never think I would buy a Chinese car. Most cars we worked on were terrible but some had promise. But now I am seriously considering a Chinese car as the build quality is there. The same production lines make Volvos, Minis, Smarts and other non-chinese branded cars.
On the other hand I recently rented a brand new Renault and VW as rental cars in Europe and they were highly disappointing and their software was junk. My 9 year old Volvo V40 is still a much better car than either of these 2 rental cars. My Volvo has no ALKS or Adaptive Cruise Control but the Renault ALKS was downright terrible on narrow Scottish Roads (and I could not figure out how to turn it off) and the VW Adaptive Cruise Control was unusable and I stopped using it after a while. The whole VW user interface made no sense and it took us a long time to figure out how to change language from German to English (I hired this car in Hungary).
Final comment: The Europeans are worried about Chinese imports to their home markets. But They should also worry what it does to their export markets. This article only points to China, but in the rest of Asia, South America and Africa, Chinese car sales are increasing at the expense of other brands. In my market Tesla and BMW are holding up ok, VW is becoming a rare sight but more Skoda and Cupra EVs are appearing and the Japanese are slowly being wiped out. If countries put up barriers to their home markets, it is just delay of pain as export markets still will be hit hard. One comfort for the Germans: I believe the Japanese are in far bigger trouble.
Dynamism is very hard to re-invigorate into product development cycles where sclerotic leadership has managed to drive out anyone with an ounce of ambition.
The many levels of institutions / reviews / etc. in the European markets encourage a consensus-driven, low speed development cycle. True innovation creeps in slowly, usually only as a result of someone else proving it works first or competitive pressure.
For example, 48VDC buses in cars have been talked about for decades but may only become a wider reality at the end of the ICE age, for example. The benefits (hybrid, variable valve timing, etc) are well known but no one wants to jump first. So much for innovation.
Never mind EU brands carefully curating what models, trims, and other features they will offer elsewhere. Even though that approach is what revived Porsche in the late 1990s and made it the most profitable car company in the world for a short while.
Ultimately, unless western car companies get better at mass customization, I doubt there will be a place for them. I also agree that some Asian imports do an amazing job re: value for money though the longevity of engines can be questionable. Rumor has it, those engine problems seem limited to US-made models.
I’m also aghast just how badly some EU brand import organizations are run, it is not uncommon (though technically a breach of dealership contracts) for US dealerships to have EU dealerships secretly send them parts that the US OEM distributor cannot be bothered to import in a reasonable time frame.
What is reasonable is in the eye of the beholder. One car part I needed was an injection-molded plastic intake shared across all imported platforms. Thanks to the competence of the German OEM import organization, it had a multi-month backlog, even though that OEM was not experiencing record demand, the part was currently used in production, and so on.
That marvel of incompetence is hilarious in hindsight but it also led me to establish a relationship with a German dealership to ship me parts in an emergency. Make it make sense for me.
I do not think the analysis is correct. Of course the failure mode is that the German companies utterly failed at software. But making them into software companies not only is impossible, it also is entirely undesirable. Software companies are in general the worst run companies in the world, with the worst, most obviously awful products. Microsoft *sucks* at delivering quality software, so does google.
If you want to make a quality product, you can not be a software company. The company which sucks the least at software, Apple, is a hardware company.
The „transformation“ which has been necessary, is to have an organization, where the electronic architecture and hardware are developed together, where the car is viewed as a mechatronic system, which is always both software and hardware together, inseparable.
VW has CARIAD, which in attempt to create a software company, created a separate organization totally removed from hardware, which is exactly what should not happen.
Not so sure whai is meant by a smart car. I drive a BYD here in New Zealand. The car is fine but no smarter then others. It's got an app, can see car location status etc through that. It's android auto and apple car are much same as others. It's touch screen UI just been updated and it's terrible!
Sure, I can ask it to change the lighting scene by voice, but who really needs that?
I bought it because it cost 30% less than other similar BEVs like VW id or a Ford Mustang E.
Maybe it's different in China. Extra surveillence perhaps.
Oh mein Lieber Herr Raasch, you sweet summer child...😂😂😂 Ever since I spent 20 months working in "supercar" manufacture in DE, I have known it for a fact that the engineers, directors and owners of the vaunted DE car industry have absolutely zero clue as to what they are even doing. They rather exist in a curious Alice-in-Wonderland parallel reality that exists in their brains only. Regret to inform, have found exactly nothing in article that would suggest to me otherwise. If you really think the problem is insufficient car IT then there is no saving the DE car industry, ever.
Yes, agree. I only have a customer perspective but I had noticed, for years before the EV revolution, that the most successful mainstream ICE brands were also the slowest to install high end software. It was a way, I believe, for those car makers with better mechanical engineering (or at least the better sales) to keep profits high. It was even done between different product lines in the same company, so their best selling marques got the lower spec software. I bought a Toyota Prado in 2015 and it was almost alone - even in the Toyota range - in not having Google or Apple connectivity as standard. A very good strategy at the time but slow software adoption and integration has been a historical, profit maximising feature, for the now so-called legacy makers for a long time. An additional problem now is that, to keep costs down while battling the highly integrated and subsidised (until very recently) Chinese cars, the legacy makers are producing EVs with far fewer bells and whistles (including software integration) than the Chinese makers and are therefore not closing the software gap and still not close on price. A very, very difficult set of circumstances for legacy makers at the moment.
I’m very curious to see how many of these smart Chinese cars will still run in 10 years. My Toyota Land Cruiser after 14 years and 170.000 km is still brand new.
This smart Chinese cars and non smart German cars is pure bullshit. German auto industry is run by impotent leaders.Take the VW's one - is the village idiot. Ad literam. And is not about only the auto industry. The whole Germany is plagued with unuseful idiots. But they obey. Starting with Merkel everything went to toilet super fast.
Early this year we bought an EV in China, in the process we test drove so many different cars both Germans cars, others and Chinese EV. Everytime I test drove Chinese EV, it make me felt all other brands that I used to in the past (including VW, Mercedes and Audi)feel like an old car. I think is the way they designed somehow fit the EV and future narrative.
Your explanation is a bit narrow, almost like picking apart a few things that fell into view but leaving out the whole rest. Is China, a market which buys status products, with patriotic interest and value for money, denying German EVs mainly because of bad software? Is the problem of the German car industry just one of this one industry or even only an economic problem? For me Germany itself is in denial because it’s people are proportionally chasing narrow minded arguments, anxiety ridden and bitter about many things. One only needs to expand one’s view to how people in China or Poland or the United States discuss the future to understand these cultural differences.
I worked for Tier 1 suppliers in the past: first Delphi from 1996-2005 and then Siemens VDO from 2005-2007 and have worked with manufacturers all over the world but mainly in Asia.
I left automotive in 2008 because of the aversion to innovate, but ended back in automotive in 2016 on working with a regulator to support a plan towards deployment SEA Level 4 autonomous vehicles. At the moment we see a rapid expansion of these deployments (still trial), mainly of Chinese developed vehicles.
When I started in 1996, the Delphi Luxembourg team was very happy we transferred the Engine ECU program for Daeweoo from Luxembourg to Singapore. Korean customers were too demanding and they rather worked with European customers at a lower pace.
For a long time we were left alone by both Europe and the US because nobody was interested in the Asian market. Asian Customers were too difficult and there were easier pickings within the GM family (del[phi was a part of GM till 1999, but GM was still the main customer till 2005).
In 2000, we started development of an Engine ECU specifically for the Chinese market. It was based on an Opel product, but we had a BOM 1/4th of the Opel BOM, simplified the software and most importantly, used the latest chipsets. That was not possible for European, American and Japanese customers as they saw it as a risk, but for Chinese customers, how we got there was not important, just it had to do what it needed to do and at the lowest cost.
The product met the latest emission standards, the engine started at -40degC (all our other markets were -30degC), it was tested at 5500m altitude in Tibet (no other car was tested above 3500-4000m) and there were no problems in Xinjiang at 50 degC. On top of that it was rock solid: the highest reliability of any Engine ECU in our product line. We had more than 60 car manufacturers as customers, most are gone but some of the big ones like ChangAn, Dongfeng and Chery are still around.
I left Delphi because it got in financial problems and suddenly all US high level managers started to interfere with our programs as we were the only region making profit and they wanted to show that they were working on profitable Asia projects. My work-life balance went to hell.
I really liked working on China projects as they were so dynamic and we could see that once they matured, they would cause a huge problem to the rest of the world. One simple example gif China dynamics: in December 2003 we were informed that all cars sold in Beijing after 1 July 2004 must meet the latest EURO emission standards to ensure clean skies during the 2008 Beijing Olympics. First response by us: "this can not be done". Reply from government: "The Olympic Games are important, your car sales are not. If you cannot do it, you're out of business". 6 Months later every supplier and car manufacturer had only clean cars for sale, and it turned out that the effort was far less than estimated (the basic engine was good enough, it was some sensor changes and and better calibrations but nothing major).
I joined Siemens VDO in 2005 working on global Radio-infotainment platforms and mainly working with European car manufacturers and I hated it.
We needed to do everything as cheap as possible. When the iPod came out, they wanted to do to have the same functionality but based on MP3 CDs, but it also had to behave like a cassette player in the older car models, and it had to do it with a cheap microprocessor, starved of RAM and ROM.
I made on the cheap a prototype of a 2cm thick large display digital radio without CD but with bluetooth for streaming and phone based voice recognition and dialling, all low cost, low weight and very efficient and showed its at 2004 CES. I got criticised by all the Germans that this was not what the market wanted. In 2017 or so CES, Continental (which had taken over Siemens VDO in 2008), showed a similar concept and advertised it as the next best thing. I messaged my ex-boss with the question why it took them 12 years to copy my work and all I got was a "sorry".
In the last few years, I also had the pleasure to host a leadership program from a German car manufacturer for 3 years in a row. Attendees were management at VP level or up, or being groomed for that level. The reason for visiting Asia was that the company realised that too many of the German leadership thought that the world ended at the German border and all international markets were like Germany. When I explained the journey towards a "car-lite" Singapore (make private cars unnecessary by improving public transport), they actually get angry and aggressive. If it is not like Germany, it is wrong even though our context is totally different... I find that always fun as it is quite predictable.
I have seen the same behaviour by European government officials. One of them questioned why Singapore dropped 100% EVs by 2030 target and replaced it by 100% clean (EV or Hybrid) target by 2030. This was changed around 2019 because they realised the vehicle supply and charging systems pipeline might not be sufficient to meet the original 100% EV goal. The Dutch official replied that in Holland that 100% EV target was not a problem. When I asked the official why, it was "in is in the policy and I wrote the policy, therefore it will happen". Now it is pretty clear that it will not happen.
My next car is most likely a BYD or a Deepal (ChangAn).
When I worked with Daewoo in 1996, no way I would have bought a Korean car, especially a Kia. Now, no concerns at all with Korean cars and for me personally, Kia styling, features and price points are the most attractive.
When I started working in 2000 with the Chinese carmakers, I would never think I would buy a Chinese car. Most cars we worked on were terrible but some had promise. But now I am seriously considering a Chinese car as the build quality is there. The same production lines make Volvos, Minis, Smarts and other non-chinese branded cars.
On the other hand I recently rented a brand new Renault and VW as rental cars in Europe and they were highly disappointing and their software was junk. My 9 year old Volvo V40 is still a much better car than either of these 2 rental cars. My Volvo has no ALKS or Adaptive Cruise Control but the Renault ALKS was downright terrible on narrow Scottish Roads (and I could not figure out how to turn it off) and the VW Adaptive Cruise Control was unusable and I stopped using it after a while. The whole VW user interface made no sense and it took us a long time to figure out how to change language from German to English (I hired this car in Hungary).
Final comment: The Europeans are worried about Chinese imports to their home markets. But They should also worry what it does to their export markets. This article only points to China, but in the rest of Asia, South America and Africa, Chinese car sales are increasing at the expense of other brands. In my market Tesla and BMW are holding up ok, VW is becoming a rare sight but more Skoda and Cupra EVs are appearing and the Japanese are slowly being wiped out. If countries put up barriers to their home markets, it is just delay of pain as export markets still will be hit hard. One comfort for the Germans: I believe the Japanese are in far bigger trouble.
Dynamism is very hard to re-invigorate into product development cycles where sclerotic leadership has managed to drive out anyone with an ounce of ambition.
The many levels of institutions / reviews / etc. in the European markets encourage a consensus-driven, low speed development cycle. True innovation creeps in slowly, usually only as a result of someone else proving it works first or competitive pressure.
For example, 48VDC buses in cars have been talked about for decades but may only become a wider reality at the end of the ICE age, for example. The benefits (hybrid, variable valve timing, etc) are well known but no one wants to jump first. So much for innovation.
Never mind EU brands carefully curating what models, trims, and other features they will offer elsewhere. Even though that approach is what revived Porsche in the late 1990s and made it the most profitable car company in the world for a short while.
Ultimately, unless western car companies get better at mass customization, I doubt there will be a place for them. I also agree that some Asian imports do an amazing job re: value for money though the longevity of engines can be questionable. Rumor has it, those engine problems seem limited to US-made models.
I’m also aghast just how badly some EU brand import organizations are run, it is not uncommon (though technically a breach of dealership contracts) for US dealerships to have EU dealerships secretly send them parts that the US OEM distributor cannot be bothered to import in a reasonable time frame.
What is reasonable is in the eye of the beholder. One car part I needed was an injection-molded plastic intake shared across all imported platforms. Thanks to the competence of the German OEM import organization, it had a multi-month backlog, even though that OEM was not experiencing record demand, the part was currently used in production, and so on.
That marvel of incompetence is hilarious in hindsight but it also led me to establish a relationship with a German dealership to ship me parts in an emergency. Make it make sense for me.
Thanks, makes perfect thanks.
German car makers are controlled by mechanical engineers
Chinese successful ones by entrepreneurs
Sorry:
“Makes perfect sense”
I do not think the analysis is correct. Of course the failure mode is that the German companies utterly failed at software. But making them into software companies not only is impossible, it also is entirely undesirable. Software companies are in general the worst run companies in the world, with the worst, most obviously awful products. Microsoft *sucks* at delivering quality software, so does google.
If you want to make a quality product, you can not be a software company. The company which sucks the least at software, Apple, is a hardware company.
The „transformation“ which has been necessary, is to have an organization, where the electronic architecture and hardware are developed together, where the car is viewed as a mechatronic system, which is always both software and hardware together, inseparable.
VW has CARIAD, which in attempt to create a software company, created a separate organization totally removed from hardware, which is exactly what should not happen.
Not so sure whai is meant by a smart car. I drive a BYD here in New Zealand. The car is fine but no smarter then others. It's got an app, can see car location status etc through that. It's android auto and apple car are much same as others. It's touch screen UI just been updated and it's terrible!
Sure, I can ask it to change the lighting scene by voice, but who really needs that?
I bought it because it cost 30% less than other similar BEVs like VW id or a Ford Mustang E.
Maybe it's different in China. Extra surveillence perhaps.
Oh mein Lieber Herr Raasch, you sweet summer child...😂😂😂 Ever since I spent 20 months working in "supercar" manufacture in DE, I have known it for a fact that the engineers, directors and owners of the vaunted DE car industry have absolutely zero clue as to what they are even doing. They rather exist in a curious Alice-in-Wonderland parallel reality that exists in their brains only. Regret to inform, have found exactly nothing in article that would suggest to me otherwise. If you really think the problem is insufficient car IT then there is no saving the DE car industry, ever.
Yes, agree. I only have a customer perspective but I had noticed, for years before the EV revolution, that the most successful mainstream ICE brands were also the slowest to install high end software. It was a way, I believe, for those car makers with better mechanical engineering (or at least the better sales) to keep profits high. It was even done between different product lines in the same company, so their best selling marques got the lower spec software. I bought a Toyota Prado in 2015 and it was almost alone - even in the Toyota range - in not having Google or Apple connectivity as standard. A very good strategy at the time but slow software adoption and integration has been a historical, profit maximising feature, for the now so-called legacy makers for a long time. An additional problem now is that, to keep costs down while battling the highly integrated and subsidised (until very recently) Chinese cars, the legacy makers are producing EVs with far fewer bells and whistles (including software integration) than the Chinese makers and are therefore not closing the software gap and still not close on price. A very, very difficult set of circumstances for legacy makers at the moment.
I’m very curious to see how many of these smart Chinese cars will still run in 10 years. My Toyota Land Cruiser after 14 years and 170.000 km is still brand new.
I wonder: What is a dumb car? And what is a smart car? According to your definition?
This smart Chinese cars and non smart German cars is pure bullshit. German auto industry is run by impotent leaders.Take the VW's one - is the village idiot. Ad literam. And is not about only the auto industry. The whole Germany is plagued with unuseful idiots. But they obey. Starting with Merkel everything went to toilet super fast.
Early this year we bought an EV in China, in the process we test drove so many different cars both Germans cars, others and Chinese EV. Everytime I test drove Chinese EV, it make me felt all other brands that I used to in the past (including VW, Mercedes and Audi)feel like an old car. I think is the way they designed somehow fit the EV and future narrative.
UK has screwed up car manufactures based in UK,with zero tariff .
Paradigm Traps are very horrible things
Your explanation is a bit narrow, almost like picking apart a few things that fell into view but leaving out the whole rest. Is China, a market which buys status products, with patriotic interest and value for money, denying German EVs mainly because of bad software? Is the problem of the German car industry just one of this one industry or even only an economic problem? For me Germany itself is in denial because it’s people are proportionally chasing narrow minded arguments, anxiety ridden and bitter about many things. One only needs to expand one’s view to how people in China or Poland or the United States discuss the future to understand these cultural differences.
My definition of a 'smart' car: low purchase price, low maintenance price, high endurace, low energy cost.
What is the nr1 issue w modern cars? Faulty chipsets w high replacement costs. Diagnostic issues by overly complex CPUs.
In the long run: supply chain issues, geo-political issues, mining, availability of minerals.
Right now EVs and Hybrids are all the rage. Will they remain so over time?
It remains to be seen given the reasons stated above.
I just wish that just one company would focus on making a better ICE car that is both reliable and cheap. More tech= more issues.
Smart? AI? I raise a red flag.
Very cool article Philip.
Not a big automotive fan, but interesting to know where the Germany brands are going.
How VW is responding to that? Are they building something new, that Chinese might be interested into?
Needs more state surveillance technology built in.