Making Cars Smarter: The Growing Role of Electronics in Automobiles

By Klier, Thomas H.; Rubenstein, James M. | Chicago Fed Letter, October 2011 | Go to article overview

Making Cars Smarter: The Growing Role of Electronics in Automobiles


Klier, Thomas H., Rubenstein, James M., Chicago Fed Letter


Electronics make up nearly 40% of the content of today's average new automobile, and their share will continue to grow. On June 2, 2011, as part of the eighteenth annual Automotive Outlook Symposium (AOS), the Chicago Fed hosted a panel of experts at its Detroit Branch to examine the current and future roles of electronics in motor vehicles.

Today an average new automobile includes more than 40 electronic controllers, five miles of wiring, and more than 10 million lines of software code. Are cars becoming more like computers on wheels? What factors are behind the increasing use of electronics in automobiles? And what should we expect in the future? For example, will motor vehicles drive themselves one day? A panel of auto industry experts at this year's AOS1 explored mese and related questions. This Chicago Fed Letter summarìzes the presentations and discussion of the panelists, who were Thomas Kurfess, professor and BMW Chair of Manufacturing at Qemson University; James Buczkowski, Henry Ford Technical Fellow and director of electrical and electronics systems research and advanced engineering at Ford Motor Company; Michael Smitka, professor of economics at Washington and Lee University; and Thomas Klier, senior economist at the Federal Reserve Bank of Chicago.

Functions supported by electronics

The panelists explained mat vehicle performance and connectivity are the two primary functions supported by the increasing use of electronics in automobiles. The panel members said they considered the growing role of electronics in improving vehicle performance to be consistent with other long-term trends in motor vehicle production, whereas they noted the rising use of electronics in enabling connectivity in vehicles would likely cause substantial shifts in longstanding industry practices.

Vehicle performance

Most of the electronic content of motor vehicles supports their performance. Motor vehicles are made up of four principal systems: powertrain (the engine and transmission); chassis (the frame, including axles, wheels, and steering) ; exterior (the body); and interior. For several decades, automakers have assembled these four systems with large integrated modules or subsystems, which are supplied by independent parts manufacturers. In each of these four systems, one can observe that the role of electronics has been growing. For example, electronic parts have replaced mechanical levers for adjusting seat positions in the interior. More recently, electronics have begun to replace hydraulics in steering components of the chassis.

Electronics have been especially important in improving two aspects of vehicle performance: 1) refining the powertrain to reduce emissions and improve fuel consumption and 2) refining the chassis, exterior, and interior to improve vehicle safety and comfort (see figure 1). Most of this growth in the use of electronics has been hidden from the driver's view.

The growing role of electronics in making motor vehicle performance better has had little effect on the traditional relationships between vehicle assemblers and parts suppliers.2 That is, the development of performance-related electronic parts and subsystems continues to follow the traditional industry model, with the automaker atop the supply pyramid, long lead times prior to product launch, and vehicle specifications that last about four years. As electronics have become more prevalent, traditional suppliers of motor vehicle parts (e.g., producers of seats) have adapted to provide electronic capability in their products.

Connectivity

In contrast to electronics' increasing role in enhancing vehicle performance, the greater use of electronics to provide more in-car connectivity is more likely to lead to fundamental changes in the auto industry. Long gone are the days when the radio in the dashboard was the only connection to the outside world while driving. Portable electronic devices that provide connectivity, like smartphones and tablet computers, have become nearly ubiquitous. …

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