As product managers, we are generally fairly focused on what we need to do to make our product become a success. As markets and products change and evolve, it can be very difficult for us to lift our heads up and realize that things are now different and so we need to start to do different things. However, some auto product managers are starting to realize this. In the past they had focused on what they needed to do to make their auto product more attractive to customers. Now they are starting to understand that it may be the software that goes into their auto product that will capture customers. How can they start to create the software that their products will need?
Software Drives Cars
Product managers at car companies are looking to give global auto manufacturers a major tech upgrade. Their plan is to hire thousands of software engineers and collaborate with chip companies on developing semiconductors for vehicles. The plan is to deliver a new generation of technology-packed models that can be updated throughout their life cycle using downloadable software and provide them with customizable features unique to each of the brands.
These product managers have big dreams. The product managers at car manufacturer Stellantis who owns multiple brands including Jeep, Chrysler and Peugeot are hoping for US$22.57 billion of annual revenue by the end of the decade. They plan on making this additional revenue by selling software-led offerings and subscriptions related to the cars they make. The product managers believe that software is core. In order to be successful, the product managers believe that there is no way they are going to allow this to be totally subcontracted to somebody else.
The product managers at Stellantis plan to leverage partnerships with BMW and Alphabet’s Waymo for autonomous driving offerings, and with chip maker Foxconn for making so-called smart cockpits. This is basically a revamp of a car’s dashboard designed for an ultra-connected vehicle. Stellantis product managers are the latest to reveal targets and revenue projections related to their connected-car ambitions as the battle between Silicon Valley product managers intensifies over the future of the automobile. Product managers at other car companies, such as Ford Motor and General Motors, are also moving quickly to develop new vehicles that come with built-in connectivity and downloadable features that can be easily beamed down to the car directly, making them more like other consumer electronics today.
Next Steps For Auto Software
Product managers at Tesla have long led the industry on vehicle software and other tech features, integrating downloadable updates, similar to software upgrades on smartphones, as early as 2012. Product managers in the rest of the automotive industry have long tried to match Tesla’s capabilities, but have only recently started to debut such features on their own vehicles. Product managers have also struggled to attract and retain the talent needed to develop the software expertise in house, often relying on tech partners to develop in-car apps and technologies.
Product managers realize that partnerships will still be core to their tech strategy but they want to control more of the software value chain. Over-the-air updates in many current car models already allow users to download the latest version of a car’s navigation software, or choose from entertainment or driving apps. In the future, new on-demand services could include the ability to buy insurance based on how a vehicle is being used, or the option to add built-in horsepower to an electric motor ahead of a road trip through rough terrain.
Many product managers are betting that growth and profits will come less from building and selling cars and more from features such as connected car services and apps. Although some software has been running in gas-powered cars for years, the shift to electric vehicles is putting software at the heart of each car. Stellantis product managers have announced plans to spend more than $35.5 billion to release an array of new plug-in models, joining a number of other car makers in laying out how they intend to compete in the industry’s intensifying EV race.
What All Of This Means For You
The world of cars is undergoing a fundamental change. This world used to be ruled by the number of cylinders that a car had and how big its tires were. With the arrival of all electric cars, the role that software plays in what a car can do has grown almost overnight. What this means for auto product managers is that they now need to start to make some changes as they adapt to a new world in which software has become the key component of any car design.
Product managers are starting to staff for the creation of electric cars. They are also acquiring the chips that will be needed to provide features such as over-the-air downloading of software updates for their cars. Product managers at Stellantis are willing to make an investment into creating more software for their cars. Product managers plan on making their cars self-driving and equipping them with smart cockpits. Product managers at Tesla have been leading the way in adding software to electric cars. Partnerships are going to be important in developing the over-the-air services that will be provided to tomorrow’s electric cars. Software in cars may be a key source of revenue when it comes to auto sales in the future.
Now is an exciting time to be an auto product manager. The products are undergoing a fundamental shift in how they are manufactured. It is becoming clear that in the future software is going to be a key component of each car that is sold. What this means for product managers is that no longer will the sale of a car be the end of their relationship with their customer. Instead, the ability to download new software over-the-air means that buying a car is only the start of their relationship with their customers. Now all we need to do is to find out how to maximize this new type of relationship!
Question For You: How often do you think customers are going to be willing to download new software for their car?
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What We’ll Be Talking About Next Time
Who do you sell your product to? Is there a possibility that your product is being used by older customers? If this is the case, what you have done to make it easy for them to use your product? If the answer is “nothing”, then you are like many other product managers who have not taken the time to study their customers and customize their products for their unique needs. Perhaps this is something that you need to start doing.