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Improving Innovation to Keep Auto Firms on the Radar

Digitalization is undoubtedly a gamechanger, and as a result, the automotive industry is transforming rapidly. As such, innovation comes into the spotlight as an area to work on if a company wants to stay on the radar, Hungarian-founded navigation software developer NNG tells the Budapest Business Journal.

The core market for NNG, namely the automotive industry, is undergoing a swift and major change, therefore the company looks at innovation as a key factor to stay ahead of competition. “The average lifecycle of an S&P 500 company has been dropping over the last decade and that trend will continue,” Tamás Szabó, director of product management at NNG LLC, tells the BBJ. “Innovation and disruption seem to have become best friends, and successful companies need to out-innovate competitors to stay in the game.”

Digitalization, a notion that pops up in every sector, makes no exception when vehicles roll into the picture. Electrification, which NNG tags as a hardcore technological change, is accordingly expected to have a huge impact on digital services in the automotive sector. “For example, take integrated charging station information; this navigation data and its management will be critical for the widespread adoption of electric vehicles,” Szabó notes.

As radical as it may sound, Szabó cannot single out the possibility of individual ownership coming to an end, or at least evolving into something else entirely. “The cost per travelled mile is rapidly going down for transportation as a service, and it will come to a point where the gap-to-ownership cost could become too big. This would cause a disruption in the ownership model the industry currently relies on,” Szabo warns.  

He believes that digital infrastructure must keep up with such changes. Furthermore, he notes that as the level of vehicle automation increases, the focus might well shift from the hardware attributes of the vehicle to the customer experience, which will again be driven by associated services.

Customer Benefit

Despite innovation having a very broad meaning, as NNG sees customer value to be the common denominator, the company makes special efforts to generate new ideas, spot new opportunities and then execute on them in order to provide a clear benefit to the customer.

“We are continuously developing our core technology, but we are also a systems integrator. So, we must drive our innovation, but also follow closely what our partners are doing. This involves technical invention and closely monitoring the impact of existing technologies in adjacent markets, and of our customers and solutions,” Szabó says.  

The manager repeatedly emphasizes the importance of the customer experience, which the company expects to stay the clear driver of the future in the industry, with trends tilting towards customization and more personalization. In the next decade, he believes software and services are set to dominate the business landscape of the automotive industry.  

“A similar transformation to that seen in the mobile phone industry will take place, at a slower speed maybe, but the trend seems to be apparent. I think our portfolio will be relevant and we’ll continue providing high customer value,” Szabo notes.

Furthermore, in the field of navigation, autonomous cars are seen to bring changes. “All autonomous cars will have to have built-in navigation that will help the user to select his destination and guide the robotic driver from A to B. Cyber Security will become a key enabler in the whole ecosystem as vehicle integrity and personal privacy are becoming major drivers for adoption. In-vehicle HMI [human machine interface] will become the most important driver for customer experience,” Szabó concludes.

This regular column, run in association with Audi, looks at how some of Hungary’s biggest companies involve innovation in their daily practice. For more on Hungary’s automotive industry, see our Special Report in this issue.