An expert in the automotive industry is Mohan Ramakrishna, Partner, Walker, Chandiok and Co, who is also Treasurer in Institute of Directors, Tamil Nadu State Chapter. At a recent event, I asked him if there was space for startups in the automotive industry.
Conceding that there are not many startups in the automotive industry, which is basically an assembling industry with components coming from various suppliers, Mohan observes that there is scope for startups that marry technology into the automotive industry. “Where new startups can grow and make a mark in manufacturing would only be through the use of technology, as technology companies that bring in automotive automation into the industry, an area already being researched by OEMs. That will be one good area for any new entrepreneur or startup to get into.”An example, from recent startup reports, is that of Mobileye, ‘a maker of image technology used to help drivers see and manage traffic risks,’ raising $400 million in a deal that values the company at $1.5 billion. “Just a few years ago, software was still viewed as an adjunct to the mechanical systems that make cars run. Now, that relationship is steadily being reversed,” observes Steve Rosenbush, in that WSJ story. Mohan reminds that in the US you already have very advanced robotics, which may gradually lead to the manufacturing base shifting from China to the US.
Of interest to automation-watchers is this data point – “In 2013, global robot sales will increase by about 2% to 162,000 units.” The count may have to be tweaked because of reasons such as this: “The Taiwanese company Foxconn Electronics (enterprise Hon Hai Precision) is producing robots for their own use in their manufacturing plants in China. These robots are not counted in the statistics because the information on the installed number of the so called ‘Foxbot’ robots installed in mainland China is rather vague…”
David Rotman reminisces, in an article titled ‘How Technology Is Destroying Jobs,’ that automotive plants were transformed by industrial robotics in the 1980s, with machines that autonomously weld and paint. On the newer roles given to robots, he cites a video on the site of Industrial Perception, a Silicon Valley startup, showing a robot for use in warehouses to pick up and throw boxes ‘like a bored elephant’!
Exciting times are ahead, therefore, for tech startups in the automotive industry.