We can’t think of a better fit for the data revolution that’s being played out right before our eyes than tech and cars. This is a marriage born out of necessity between Silicon Valley and Detroit. While traditional automakers (and customers) might see this is a bit of a stretch, the reality is these two business sectors have more in common than you think.
Detroit was a major hub for new and exciting technology back in the day when mass production of automobiles took off for the first time, combining the cutting edge of design and engineering. Now fast forward a century or so and you saw the exact same excitement in Silicon Valley.
The two cities couldn’t need each other more right now. It all hinges on the fact that both automakers and tech companies need (well, want) increasing amounts of data. As the automotive industry continues to reinvent itself, it needs to be able to adapt to changing consumer preferences and tightening margins by diving into the data. On the other coast, new companies in Silicon Valley are built on data and will always need more to feed the beast. Combining the two can provide access to new sources of information (driving and time spent in the car), new entertainment options (in-car infotainment), and more.
At least this is the thinking coming from Lear Corp CEO, Matthew J. Simoncini, who says the two can make beautiful music together, as long as the tune has a lot of zeros and ones. His view is that auto manufacturers know how to get data, but lack the ability and creativity to use the data in ways that can not only help make the driving experience better but help the industry better monetize drivers. The other benefit he sees coming out of this coupling is that staid manufacturers (automakers) can look cooler and hipper, but it won’t stop there.
This ripple could be felt all the way to Wall Street. Simoncini says the top five automotive companies have a combined market cap of about $400 Billion – not bad. Unless you compare that to the top five Tech companies, who have a combined market cap of, wait let me see, oh about $3 TRILLION dollars. Whether or not you think that’s an overly inflated figure (thanks a lot, Wall Street), there’s a whole lot of executives in Detroit hoping to have some Silicon Valley pixie dust sprinkled on their stock price.