SEMA BUSINESS SEMA n BUSINESS Q&A With John Waraniak ADAS: A Deeper Dive Into Channel Growth By Mike Imlay

n Arrow Electronics developed the semi- autonomous vehicle for quadriplegic former IndyCar race car driver Sam Schmidt. An example of ADAS supplier technologies, it was featured in SEMA Central as part of the Advanced Vehicle Technology ADAS Press Conference at the 2017 SEMA Show.

of Car Toys, recently formed the non-profit Vision Zero Automotive Network. Its mis- sion is to save 10,000 lives with aftermarket safety technology available today. It’s work- ing with aftermarket ADAS leaders and cit- ies across the United States to raise awareness of the specialty-equipment industry’s safety performance products. Vision Zero is an excellent platform to help SEMA companies drive consumer as well as channel awareness. Meanwhile, the hile identifying multiple growth opportunities for the spe- Mobile Electronics Association, the Motor cialty-equipment industry, the recently released “SEMA & Equipment Manufacturers Association Advanced Vehicle Technology Opportunities Report” (see and others have partnered with SEMA to p. 114) also forecasts a significant evolution of sup- jointly promote consumer safety and chan- ply, sales and marketing channels for advanced driver nel awareness. Wassistance systems (ADAS) over the next decade. To better understand the changing dynamics of the ADAS aftermarket, SEMA News turned to SN: What changes in marketing will SEMA Vice President of Vehicle Technology John Waraniak. accompany ADAS over the next five to 10 years? SEMA News: Can you give us an over- year with Mobileye’s aftermarket safety per- JW: ADAS is changing the industry. Mar- view of the current aftermarket channel formance products alone. Mobileye offers keting and business technologies are also structure for ADAS? Which suppliers, sales numerous life-saving warning features in a advancing and fusing together to create and services providers are presently seeing single bundle that can be retrofitted onto omni-channel sales, service and distribution. profits and why? any existing vehicle. Omni channels are a relatively new John Waraniak: Today there are approxi- More than 92% of the 40,000 fatal acci- approach to marketing, selling and serv- mately 4,200 car audio and mobile-elec- dents annually on U.S. roads are caused by ing aftermarket customers that create an tronics retailers in the United States and driver error, and 60% of those could be integrated, cohesive customer experience no 270 million vehicles in operation (VIO) prevented or mitigated by ADAS technolo- matter how or where a customer reaches on our roads. Sixty million of those have gies. In other words, the aftermarket can save out. Auto parts are the third-largest category no ADAS onboard, creating a significant lives, and mobile tech providers, such as Al in e-commerce sales, which is contributing opportunity for current aftermarket chan- & Ed’s, AAMP, Voxx International and to the development of the omni-channel nels for retail sales, installation, service and Pioneer, are increasing sales and profits by automotive aftermarket sales and distribu- distribution. Mobile-electronics companies advocating safety performance and educat- tion channels. are at the forefront of today’s opportunities. ing consumers. It’s important to distinguish an omni- For example, the Al & Ed’s Autosound retail Brandmotion co-founder and president channel experience from a multi-channel chain saw $1.3 million in new business last Jeff Varick along with Jim Warren, formerly experience. Multi-channel experiences are

112 June 2018 SEMA News

sn_0618_ADAS_Waraniak.indd 112 4/24/18 10:23 AM what most businesses have today. They have buyers. More than 80% of all cars shipped in nies to consider for R&D and the latest a website, a blog, Facebook and Twitter. 2021 are expected to have some level of con- sensor and software technologies for devel- In most cases, however, the customer still nectivity, so vehicle connectivity products oping their products. They differ from tra- lacks a seamless experience and consistent and skills will become increasingly impor- ditional aftermarket suppliers by individual messaging across each of those channels. tant over the next few years as well. products but also aggregate those products An omni-channel experience accounts for According to Brookings, the auto indus- to provide full-service systems integration each platform and device a customer uses try’s fastest-growing occupations are digi- and modular supply solutions. That trend to interact with the company. That knowl- tal. For example, Ford has hired about of systems-integration suppliers started with edge is then used to deliver an integrated 3,000 salaried employees in the United OEM suppliers such as Bosch, Magna, Con- experience to customers. So the customer States annually over the last few years, 80% tinental and Denso in the mid-1900s and is can be shopping online from a desktop or a of whom are in technical positions such now extending into the aftermarket. mobile device or by telephone or in a brick- as software engineering, electronics and and-mortar store, and the experience would information technology. That same trend SN: Regulation always impacts product be seamless. toward STEM-based skill sets will extend to development. Is the regulatory outlook Mobile will become especially important the aftermarket. favorable for the aftermarket? over the next five to 10 years. Mobile phones Software currently represents about JW: Potential legislation and regulations account for 34% of retail e-commerce sales 10% of overall vehicle content today and can certainly drive or restrain the adoption transactions today. That percentage is is expected to grow to reach 30% by 2030. of ADAS technologies. Fortunately, ADAS expected to increase to 48% by 2020. SEMA Not surprisingly, aftermarket ADAS players technologies have grown since 2010 with companies using omni-channel techniques will need employees with software expertise very little regulation. In the United States, to align their ADAS messaging, goals, objec- and electronics skills as well as knowledge the current administration has also adopted tives and products across their retail and of GPS, infrared, ultrasonic, image, camera, a pro-innovation, less-regulatory stance. The distribution channels will stand out from radar and lidar sensors. increasing consumer awareness and adoption their competitors. of safety performance technologies, coupled SN: What about the supplier side of the with this favorable regulatory climate, will SN: What new industry skills, education chain? What’s changing on that front? continue to drive industry growth. and setups will be required? JW: Suppliers such as Arrow Electronics and The U.S. Department of Transportation’s JW: The majority of aftermarket ADAS AutonomouStuff (AStuff) are two examples National Highway Traffic Safety Adminis- sales are currently in fleet applications, but of today’s aftermarket ADAS landscape that tration includes forward collision warning both individual sales and fleet sales will also represent next-generation SEMA com- and automatic emergency braking ADAS grow as more consumers become aware of panies supplying ADAS, connected-vehicle systems in its New Car Assessment Program the benefits and acceptance of ADAS tech- technologies and autonomous driving prod- (NCAP) five-star rating process. Safety rat- nologies and systems. While aftermarket ucts and solutions. ings that reward certain ADAS features will channel providers evolve to include specialty AStuff got its start when CEO Bobby speed ADAS diffusion into new models and dealers, suppliers, customizers and upfitters, Hambrick noticed a gap in the industry’s existing models. the profile, talents and skills required of supply chain. New automotive entrants and As ADAS technologies are incorporated shop personnel will need to include strong smaller manufacturers were having a hard into NCAP safety ratings, automakers technical knowledge and expertise in vehicle time accessing the technologies needed to and insurance companies will have strong diagnostic scanning tools, diagnostic trouble solve their assisted and automated driving incentives to increase the use of ADAS, code resolution and procedures, software projects. He created AStuff as a place where including aftermarket solutions. The Euro- updates, sensor recalibration, compliance they could find the products to get their pean NCAP has already included ADAS and ADAS testing procedures. projects up and running. in its safety ratings for several years now, Aftermarket providers will also need access Arrow Electronics specializes in distribu- and European automakers have responded to many of the same tools and techni- tion and value-added services relating to with rapid adoption. Ford is also releasing cian training available to OEM dealer net- electronic components and computer prod- Co-Pilot360 later this year—a product that works to compete and understand ADAS, ucts. Arrow developed the super-cool semi- will include some of the most-requested advanced telematics and diagnostics. OEMs autonomous vehicle for quadriplegic former ADAS technologies. currently have more comprehensive informa- IndyCar race car driver Sam Schmidt that Thanks to all this, the total number tion and access to ADAS-equipped vehicles was featured in SEMA Central as part of the of ADAS-equipped cars on U.S. roads is through embedded proprietary software and Advanced Vehicle Technology ADAS press expected to increase from 9% of the total connected-vehicle systems. Yet as consumers conference at last year’s SEMA Show. The VIO in 2017 to 82% by 2030. adopt more ADAS technologies through vehicle project’s objectives are not to trans- both OEM and aftermarket channels, after- fer control of a vehicle to technology but market providers will adapt, respond and rather to enable disabled drivers to enjoy the n John Waraniak leads SEMA’s vehicle technology programs leverage their core competitive advantages of driving experience by leveraging the power to connect members with cost- cost and convenience. of technology. effective product-development Vehicle and driver connectivity is a fast- Arrow and AStuff are excellent product- and engineering resources, solutions and benefits. growing and popular trend among new-car development resources for SEMA compa-

www.semanews.com 113

sn_0618_ADAS_Waraniak.indd 113 4/24/18 10:23 AM