Why 1,000 app developers just might propel the American car industry back to leadership

Last week, Ford unveiled its developer program at the 2013 Consumer Electronics Show in Las Vegas. A developer program targets software developers and typically includes tools they can use to create apps, as well as get design advice, testing and technical support, and distribution opportunities. Ford reported that over 1,000 developers registered in the program’s inaugural week.

This could be a major milestone in the evolution of the automotive industry, and if experience is any guide, the outcome should convey significant market advantages to the American car companies: Ford and General Motors.

Why might 1,000 software developers signal such a sea change? Consider the state of the automotive industry. Two regulatory forces are introducing significant upheaval to all companies that sell cars in the U.S. The first is the corporate average fuel economy, or CAFE, requirement. Its purpose is to decrease fuel consumption, which it attempts to achieve by stipulating a standard for miles per gallon (MPG) that every automotive company’s fleet of vehicles must achieve. In 2011, that average was 27.6 MPG. To meet that standard, car companies must consider how to balance sales of trucks, SUVs, and sports cars, which typically consume more fuel, with sales of smaller cars, which typically are more fuel efficient. By 2025, the standard is scheduled to increase to 54.5 MPG. Meeting it will require a combination of existing and new innovations in engine technology – including hybrids – aerodynamics, and lightweight materials.

The second is vehicle safety, the requirements for which are set by the National Highway Traffic Safety Administration, or NHTSA. Here’s a link to its list of standards. Though the list covers everything from windshields to theft protection, the standard that gets the most attention is occupant safety, especially during a crash. Car companies advertise their safety by communicating the number of stars they get in crash tests. The more stars, the safer the vehicle is presumed to be. Meeting these standards also requires that car companies innovate in the use of stronger materials and in designing vehicles that crumple in a way that minimizes impact to the passenger compartment.

The cumulative effect of CAFE and NHTSA safety requirements is an increased homogenization of vehicle design. There is only so much the car companies can do to differentiate a car’s exterior when they have to satisfy so many demands. Engine compartments will need to shrink to accommodate smaller, more fuel efficient motors. Reducing drag will require that the angles at which windshield meets hood, roof meets rear window, and hood meets headlights, bumpers and fenders will result in a more and more common profile. The result of all this design-to-regulation will diminish the ability to design unique exteriors and therefore may put off customers, who have been conditioned to consider a car’s look when they buy. Customer enthusiasm for a car purchase will wane if their neighbors can’t tell if it’s a Mercedes or a Toyota.

One way for the car companies to preserve that emotional spark with drivers is to differentiate the inside of the car. Here, there is enormous room to innovate and gain market leadership. Where and how manufacturers present dashboard information, audio and video input, sensors such as rear motion detection and Bluetooth support for your mobile phone, and climate controls are much less tightly regulated. It also happens to be the aspect of the vehicle that a car’s owner views most often. After all, none of us can see our vehicles’ exteriors while we’re driving them.

By creating a developer program, Ford is inviting third parties to help figure out ways to deliver more content and services to its drivers. It recognizes that it can’t possibly generate all the innovation that would otherwise come from a new marketplace of apps, music, videos, games, books, and more. If Ford can succeed in offering ways for consumers to enjoy many of the benefits of their smartphones while safely driving at 70 mph, it can substantiate higher vehicle prices and produce the same kind of customer loyalty that Apple has enjoyed as iPhone users upgrade to new iPhones because they don’t want to lose all the content they’ve acquired.

Why might this propel the American car industry back to leadership? Because the heart of the mobile app business is here in the U.S. Ford and GM may not be Silicon Valley darlings, but they have engineering-driven cultures that should be able to adapt to smartphone industry speed. They also have significant technology investments and partnerships, such as GM’s OnStar and Ford’s SYNC service. More than any European or Asian brand, Ford and GM have favored access to software innovators and the culture to support it.

In a future post, I’ll consider this trend from the perspective of a third party app developer, or a company that publishes apps for smartphones. For now, though, consider that if Ford and GM can build smartphone-like features inside their cars, including advancements in driver interfaces and connecting drivers to the world around them through apps, they can vault once again to the lead in the global automotive market. As a guy who grew up in a Detroit suburb and whose father worked for GM for nearly 30 years, I have to say I’m rooting for them.

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One comment

  1. […] of us came away impressed with the automotive companies. In this post, I wrote about how Ford’s early efforts to recruit developers could signal the start of a […]

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