Product Management in the Automotive Industry
Musings from an Automotive Product Manager.
Product Management is a broad umbrella term that means many different things in many different industries. In the automotive world, the definition has been a work in progress. The product manager of yesterday is someone who is purely in charge of the P/L for a specific product, or even a specific part of the product.
Today, however, the role is evolving. It has yet to be completely fleshed out in terms what the actual responsibilities and expectations are. PMs in the automotive world today are a crossover between the traditional role of a Technical Manager, the Product Owner role (as per Scrum) and the traditional role of a Product Manager.
One thing you have to understand is, a big chunk of the employees within an automotive company have been in the industry longer than most new-graduate-hires have been alive. It’s an indication of how long the processes have been calcified in place, and it should give you an idea of how hard it is to implement and inspire new development frameworks.
That being said, the automotive industry is being hit by 4 massive new disruptions:
- Connected
- Electric
- Autonomous
- New mobility solutions
It’s an exciting time to be in the automotive industry.
Through this post, I want to highlight some key nuances of being a PM in the automotive world.
End Users vs. OEMs
As a tier-1 supplier in the auto industry, OEMs (original equipment manufacturers) are the customer. Instead of monitoring user engagement metrics and churn, we’re constrained to feedback from customer-facing technical sales teams to get a diluted idea of what exactly the customer is looking for. There is a lot more room for growth here in terms of customer relationship and business development. The archaic model of Users <- OEM <- Tier 1 Supplier <- Tier 2 supplier <- … is gradually being transformed. There is a lot more initiative from the lower tier suppliers in engaging with the OEMs. And a lot more Tier 1s in engaging with the end-users.
To date, there hasn’t been clear transparency in user engagement and retention for drivers and passengers in cars. However, the pipeline to track user behavior, store and get this data out is carefully being laid out. With more and more sensors and cameras increasing inside the car, the need for faster edge-processing and stronger cybersecurity hasn’t been more evident.
Agile — AutoScrum
A number of OEMs have made the transformation into becoming a more Agile Enterprise. Most of them have adopted Accenture’s AutoScrum framework. (Side note: I would get chastised for calling it a framework, but for the sake of this article, let’s call it a framework.)
The secret sauce in Accenture’s AutoScrum is the integration of software and hardware development. Due to hardware’s inherent long development cycles, making it work with Agile’s fast development cycles is difficult. In spite of the obvious challenges, European OEMs are taking this challenge head-on and leading the way to take the first stab at adopting Agile. This has influenced other OEMs and trickled down to tier-1 suppliers, making them follow suit.
Organizations vs. Individuals
Contrary to what people might think, even though OEMs are heavily entrenched and process-laden organizations, most decisions are formed by the snowballing effect of key individuals within the company. Simply put, the person you’re communicating with from the OEM’s side could have much more influence on the purchasing decision than you think. Tread carefully.
Competition
Competition in the automotive world is fierce. Innovating yourself out of tight margins is close to impossible. Traditionally, automotive tier-1 suppliers built motes around their business by optimizing their manufacturing processes, improving quality standards and strengthening customer relations. New entrants into the market find it hard to compete on these three fronts.
However, commoditization of hardware and ease of SW development has led these entrants to offer similar products as the incumbent tier-1s and undercut prices. This is forcing tier-1s to innovate by building new products and implementing new business models.
OEMs in China vs. OEMs in US/Europe
The pace at which OEMs in China have been growing is staggering. The Chinese OEMs are much more advanced in engineering development than the industry assumes.
I could write a whole new post on this section but for this post, I want to highlight one key difference: When European OEMs demand a feature as part of the product, facial recognition for example, they are much more cognizant of what it really takes to build this technology. The need for that feature is driven by a clear understanding of the market and their product roadmap.
Chinese OEMs on the other hand would want that feature, yesterday, purely because there’s here-say of their competitor developing it. This FOMO-driven product development is actually one of the driving forces of China’s growth and will only further fuel their ascension to becoming powerful players in the automotive world.
Disclaimer: All opinions expressed are solely my own and do not express the views of my current or past employers.
