If Volkmar Denner is right, the trend towards connecting vehicles to the internet will have a comparable impact as the electrification of the powertrain, currently the other major challenge for the automotive electronics supply chain. Volkmar Denner watches this market closely: He is one of the CEOs of automotive tier one Robert Bosch GmbH.

Studies on user expectations in particular within the younger generation show that the desire to own a car is decreasing in the industrial countries, Denner said in its opening presentation to the Automotive Electronics congress in Ludwigsburg, Germany, that took place during this week. The young generation does not only attach less importance to owning a car in general, it also values less the experience associated to a powerful engine. Instead, young drivers and drivers-to-be expect interactivity and connectivity in their vehicles – much the same environment they use at home.

This will move the focus of industry wide development efforts from power train to interior, in particular to user interfaces and connectivity functions. In the first place, this shift of focus will cause a clash of the cultures: Consumer electronics with its fast design cycles and short product lifetimes will influence the in-car electronic landscape much more than in the past where car designers typically took up to seven years to roll out a product generation. This cultural change will affect the entire design chain, Denner said. Beyond consequences for design processes, procurement, parts stock and other industrial aspects it also will drastically change the in-car electronics architecture.

Within the vehicles, the two major domains of car-related functions and infotainment will persist, but the human-machine interface will significantly gain importance. It will be the place where many of the new functions are expected to converge. Cultural ingredients of the internet society such as online communications, open source software, updateability and rapid innovation cycles will enter the hitherto contemplative and conservative automotive electronics design culture. “The deployment of non-automotive products within the vehicles cannot be stopped,” Denner said. The problem: The electronic newcomers do not meet automotive specifications; consumer electronics suppliers do not feel the necessity to adhere to the quality level requested for automotive products. For this reason, liability and warranty issues need to be cleared in a large industry-wide joint effort, Denner demanded.

On a more technical level, the trend towards individualization and multifunctionality will reshape current dashboards. Mechanical and electromechanical instrument clusters soon will be replaced by purely electronic displays, with the user interfaces being highly adaptable to the taste of the individual driver. This also would meet the changing information needs based on ecological driving style, in many cases in combination with electric and hybrid powertrains. Adaptable user interfaces also would offer new options to differentiate not only for car vendors but also for fleet operators.

Regardless of the massive changes ahead in the interior, also the powertrain optimization will go on over many years to come and require huge engineering resources. Denner reiterated Bosch's known position (actually it is the position or more or less the entire German car industry) that the internal combustion engine will prevail over at least 10 to 15 years to come – albeit at much better energy efficiency. A host of detail improvements will boost the combustion engine efficiency by at least 30 percent, Denner said.

Nevertheless Bosch has joined the ranks of the e-car and HEV supporters for quite some time. The change to electric drives will reshape the face of the entire value chain, Denner predicted. For instance, the share of electric and electronic components of a vehicle will rise from 40 percent in a conventional gas burner to 75 percent in an e-car. At the same time, the share of the OEMs in the value creation will decrease – from 35 percent in today's industry to some 23 percent in a landscape determined by design and production of electric drives. In return, the share of suppliers in this value chain will climb to 77 percent, Denner predicted.