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Frost & Sullivan: Spate of Software Related Vehicle Recalls and the Future of Automotive Electronics

LONDON - 11 February, 2010 - With all eyes now peeled on Toyota for three major vehicle recalls and the potential of yet another recall holding the world's attention, much more is at stake than financial consequences or the momentary loss of consumer confidence. As Vehicle Manufacturers (VMs) awaken to the dangers of increasing electronics content, the development and deployment of key automotive technologies like Advanced Driver Assistance Systems (ADAS) and the future of legislations mandating electronic technologies aimed at improving overall safety, is at play.

On the heels of Toyota recalling nearly half a million flagship 2010 Prius and other hybrid vehicles over braking problems comes Ford's announcement that it will update brake-related software on its 2010 Ford Fusion Hybrid and Mercury Milan Hybrid and questions are now arising about the safety of 2009 – 2010 Toyota Corollas and 2005 – 2009 Chevrolet Cobalts.

Insatiable demand for fuel efficiency and better driving dynamics, together with VMs' focus on making cars safe, fun, comfortable and luxurious, have greatly increased electronics and software content in cars. "While electronics has increased efficiency and passenger comfort, it has also exposed the consumers to higher risk of accidents and VMs to painful recalls costing millions of dollars. It has also caused an inordinate blow to trust that countless consumers have bestowed on the car maker," says Krishnasami Rajagopalan, Frost & Sullivan's Global Program Manager - Chassis, Safety & Driver Assistance Systems Group, in a new article entitled: Software Issues in Toyota Motor Corporation, Ford Motor Company and Chevrolet Vehicles – Different Facets of Problems Posed by Electronic in Cars.

The process of increasing electronic content was always perceived as safe and this aspect of electronics gave impetus for both carmakers and governments to amply depend on them. However, recent recalls from Toyota and Ford were both related to software in the vehicles' anti-lock brake system (ABS); a system that is widely mandated worldwide, including in Europe and the United States, for its safety benefits. "Despite the fact that the issue is related to hybrid car regenerative breaking alone, it is anticipated to have wider repercussions on the use of electronics in general, especially those of safety systems," adds Frost & Sullivan Research Analyst Aswinkumar P.

It now remains to be seen whether the recent recalls will lead to stricter enforcement, review and testing of vehicle electronics. At stake are the future design and deployment of these systems as well as inevitable price increases for consumers as well as potential liability issues for suppliers. Importantly, it remains to be seen whether any weakening of consumer confidence in vehicle electronics will lead to slowdown of "electronification" of the automobile itself, "The consequences of the recalls will have repercussions not only for VMs, but also for electronic system suppliers and regulators who have been slow to act on consumer complaints about vehicle electronics. Until this problem is sorted out amicably and trust restored, consumers are likely to sit apprehensively in their cars surrounded by electronics they no longer trust," concludes Rajagopalan.

If you are interested more information on this article or to speak with its authors, please e-mail Monika Kwiecinska, Corporate Communications, at monika.kwiecinska@frost.com, with your full name, company name, title, telephone number, company e-mail address, company website, city, state and country.

About Frost & Sullivan

Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth and achieve best-in-class positions in growth, innovation and leadership. The company's Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined research and best-practice models to drive the generation, evaluation, and implementation of powerful growth strategies. Frost & Sullivan leverages over 45 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from 40 offices on six continents. To join our Growth Partnership, please visit http://www.frost.com.

Contact:

Monika Kwiecinska
Corporate Communications – Europe
P: +48 22 390 4127
F: +48 22 390 4160
E: monika.kwiecinska@frost.com

http://www.frost.com

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