Yahoo Finance Singapore's latest foray into the auto industry is fueled by high octane technology
Cloud and data analytics are key to the rebirth of the island’s car industry as digitally-enabled cars.
We’re just over a year away from the beginning of the end of the fizz of a V6 or the rumble of a diesel engine. Internal combustion cars will start being phased out in Singapore in 2025. While this move to more sustainable transport is ambitious and needed, the opportunity it provides to the local automotive sector could be vast.
Singapore’s history as a carmaker is brief – spanning just a few decades and dying quietly in 1980 when the Ford Factory shuttered its art deco doors. Since then, several attempts at restarting the island’s automotive industry have surfaced, including the locally developed Dendrobium electric supercar, and plans for a locally-built Dyson electric vehicle (EV), which, sadly, were scrapped. However, Singapore recently dipped its toe into automotive waters once more, signalling what could be a u-turn in The Little Red Dot’s ambitions.
The cunningly-named HMGICS (Hyundai Motor Group Innovation Centre), which cost almost $400 million to build, just opened in Jurong. This new centre has a planned annual capacity of 30,000 vehicles and includes a vast test track and a helipad for flying cars on its sprawling roof. Hyundai will also develop autonomous driving technology, including robotaxis for US market, at the center – a fleet of Hyundai Ioniq 5 cars bristling with sensors and antennae was recently seen tucked away in the bowels of the facility.
Vehicles defined by software
The car industry is, like any other, changing rapidly with advances in technology. Cars today are like mobile phones – they are defined more by their operating system than by their physical characteristics.
Software-defined vehicles (SDVs) have their operating system updated periodically via the cloud, making them better and better at each iteration based on car and user data on energy consumption, driving habits, and user preferences. Software updates over-the-air (OTA) on the cloud also include improved safety and entertainment features, making the shell of the modern car just a foundation for future updates – much like a modern mobile device. Hyundai is well on its way to SDV saturation with a global strategy to transform all vehicles SDVs by as soon as 2025.
A great example of a company improving the lives of EV owners happened in 2017, when Tesla issued a software update that temporarily extended the range of some of its models so that owners living in Florida could more easily evacuate as Hurricane Irma barreled towards the state. Driven by fantastic possibilities like this, global revenue from digitally-enabled services like SDVs is set to rise tenfold by 2040 to US$3.5 trillion. Trillion. As a tech hub in the region, Singapore can’t afford to turn its nose up at a figure this eye-watering.
Technology at the heart of mobility’s evolution
EVs are way simpler than their complicated combustion-powered parents to build and operate. With the only physical components requiring updates being simple things like the battery, tyres, brakes, and windscreen wipers, EVs have removed much of the complexity of owning and maintaining a car. And with only 20 moving parts compared to internal combustion cars, which have as many as 2,000, EVs are easier and quicker to build. S
DVs that run on electricity (SDEVs – to coin yet another acronym), take digitally-enabled mobility a step further. They combine the simple tech of EVs with highly advanced operating systems that make mobility even more intelligent.
Thankfully, the constraints that killed Singapore’s motor industry in the 1980s are largely gone today. The car market is much more global than it was once, and the natural resource and labour demands in the industry have evolved. Instead of assembling a drivetrain or replacing a clutch, today’s SDEV workers in Singapore will be writing code for a driver-assist update. And, as a widely established tech superhub, Singapore is well-placed to become a regional center of SDEV software development. This is where the island can shine.
The right regional supply chain
Although China has largely won the EV race, Singapore can join the race to the checkered flag by translating its proven tech prowess into SDEV excellence. With simplified assembly comes the need for data-driven supply chains that efficiently leverage the more cost-effective component manufacturers off the shores of Singapore. Digitally-transformed supply chains which rely on cloud technologies like artificial intelligence (AI) and data analysis will be critical to the island’s success in driving SDEV development. And while SDEVs are more straightforward to manufacture, carmakers like Hyundai can streamline their supply chain and reduce the number of suppliers required for various components using data.
Meanwhile, chip shortages and advancements in AI, including generative AI, are reshaping the landscape for buyers, sellers, and suppliers of electronic components. SDEVs, which increasingly require more sophisticated tech components, will make supply chain resilience even more critical to Singapore’s chances of success.
Anticipating change with data
The recent history of global supply chains demonstrates that markets can adapt to challenges effectively, but planning for worst-case scenarios can be expensive. True resilience in a supply chain requires the ability to anticipate demand fluctuations and respond swiftly while safeguarding against disruptions like geopolitical events, natural disasters, or shipping bottlenecks. And the key to anticipating changes in demand is data.
Amid evolving manufacturing and supply chain industries, Singapore can learn much from Japan, which was until recently the world’s leading car exporter. The country’s auto major Honda recently underwent a data-driven transformation to better understand and manage its operations. Honda uses Qlik's analytics platform to gather and analyze data from various sources, including assembly lines, supply chains, and dealership feedback. This approach helps Honda make data-informed decisions across its operations, improve customer experiences, and optimise manufacturing and supply chain processes. Honda’s data-driven strategy naturally enhances its competitiveness and responsiveness in the automotive industry, helping the company evolve.
Harnessing the right data is key to predicting demand and riding waves of changing global economies and technological advances. And as SDEVs make their inevitable appearance in car dealers worldwide, the car industry will evolve from a mostly manufacturing business to a more technology-based business. With the right data and analytics technology, Singapore may just have a chance of winning a piece of the US$3.5 trillion SDV industry.
Chong Yang Chan is the managing director for Asean at Qlik
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