Car companies that innovate have the edge, says study
It's a car-eat-car world out there, and Boston Consulting Group says the competition is only going to get more fierce.
BCG's new study finds that companies that are more innovative will have an important competitive advantage.
Analyst Xavier Mosquet says a majority of people say they want to buy a car from a company they perceive as innovative.
But, it may not be easy to meet their expectations.
Mosquet says consumers these days are used to a new phone or computer tablet coming out every year, and they're starting to want the car industry to match that pace.
He says car companies can't come out with a physical new model every year, since it takes at least three years to develop one.
But, the car of the future could be upgraded every year with new software to enhance the performance and features.
"We will have the pleasure of having a slightly better car every year, even if we keep the same car," he says.
The study also shows that the features people want the most are ones that will help them drive, and drive more safely.
They would welcome technology that allows the car to brake automatically to avert an accident, do the parallel parking for them – even take over the driving itself.
"So I think we are ready as consumers, ready to get more help," says Mosquet, "so that we can free up more time in our car."
The study finds that car companies have become significantly more innovative in the past decade.
"There is more software in a car today than there is in a fighter jet," says Mosquet.
Toyota, Ford, and BMW are now in the top 10 in BCG's survey of the top fifty most-innovative companies.
But the perception of car companies as innovative has lagged, and that's a problem.
Many people still think of automotive as a low-tech, Rust Belt industry that makes durable goods on wheels.
Mosquet says auto companies have to do a better job advertising how high-tech they are, because they are now competing for top talent with companies like Google, Apple, and Microsoft.
And he says the Detroit Three also must do a better job selling the benefits of living in Michigan – as well as continue to offer prospective employees jobs in more desirable regions of the U.S.