Telematics in China: ‘Reverse innovating’ for success

Telematics in China: ‘Reverse innovating’ for success

China may still be settling into its role as the world’s largest car market, but if recent events are any indication then the Middle Kingdom will have a significant effect on the global automotive stage—as both consumer and manufacturer. Sales of passenger vehicles in China are expected by many analysts to grow 10 to 15 percent annually over the next five years, capturing the attention of both global automakers and domestic manufacturers.

Regardless of whether Chinese carmakers are looking for high-end infotainment platforms or entry-level audio, system scalability has become increasingly important to meet the demands of various vehicle market segments. Software-driven solutions that allow automakers and customers to upgrade and expand are critical to meet this goal. As China’s automotive market matures, demand is also expected to rise for premium in-car infotainment services such as navigation, smartphone integration, and real-time traffic and travel advisories.

Electronics companies and automobile manufacturers are racing to invest in China and help participate in this evolution. Currently, advanced electronics options for entry level or mid-segment vehicles are still beyond the reach of the average Chinese customer. However, the sheer size of the Chinese market is propelling sales in the luxury and premium-high segments of the auto market quickly, and along with that is an insatiable appetite for the latest in-car electronics, navigation, and accessories. This symbiotic relationship is the perfect incubator to support the growing trend of “reverse innovation”—where new, transformative technologies arise out of emerging markets to be sold in first world markets. (For more on China, see ‘Emerging telematics opportunities in China’.)

For most organizations, innovation is not optional; it’s oxygen. It’s absolutely essential to the longevity of successful corporations. Companies must become adept at capturing business both within the growing Chinese market as well as using the talents and latent innovation resident within the country to bring new products to the rest of the world. In the case of Harman, its next-generation infotainment platform leveraged the unencumbered talents of software designers in China and India, along with new development methods to shorten the innovation cycle, and increase system flexibility to better match the escalating speed of technical obsolescence of consumer technologies and how they integrate with the car. (For more on India, see ‘Emerging telematics opportunities in India’.)

Harman assembled a team of new engineering resources based out of Shanghai and Bangalore, and challenged them to create a new approach to building infotainment systems. Starting in late 2008, the new team delivered the first prototype system in nine months—what became known as the world’s first scalable, next generation infotainment platform. This offering provides automakers with a flexible menu of information and entertainment options, such as 2-D and 3-D navigation, hands-free connectivity, Internet, voice recognition, and connectivity options to a wide range of consumer devices and handsets, using an advanced software interface. Automakers have the flexibility to add the number of options they want depending on vehicle model and pricing options.

Business leaders who wish to encourage “reverse innovation” within their organization need absolute focus and personal resolve to support that principle in their companies. Great ideas and capable individuals coming out of emerging markets are often met with resistance from the West, where decision-making typically lies. Anxieties over losing power, or jobs, or simply that it’s “not the way things are done around here” are typical reactions to emerging market innovations. Changing these perspectives takes personal resolve of leaders from the highest levels to let innovation break through—regardless of the geography it’s originating from.

Sachin Lawande is Harman International’s chief technology officer and o-president of Harman Automotive Division.

For all the latest telematics trends, join the sector’s other key players at Telematics Detroit 2011 in Novi, MI on June 8 and 9.

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