1. New index by Roland Berger and Forschungsgesellschaft Kraftfahrwesen Aachen (fka): German OEMs hold their lead in a dynamic competitive environment
2. New market players and cooperations between high-tech firms and industry incumbents are changing the market
3. Europe and the US back different priorities for connectivity – one third of new cars in the US are connected; in Germany the figure is just 10 percent
4. Japanese and South Korean automakers are increasingly putting automated driving functions in mass produced vehicles

Munich, July 26, 2016

German OEMs retain their lead over US automakers when it comes to incorporating automated functions in mass produced vehicles. But other countries are catching up and the competition is intensifying. These are some of the findings of the latest "Automated Vehicles Index" for the third quarter of 2016 issued by the automotive experts at Roland Berger and Forschungsgesellschaft Kraftfahrwesen mbH Aachen (fka).

The index combines industry and market indicators and compares the relative competitive positions of the key automotive nations, these being the US, Germany, China, Sweden, the UK, South Korea, France, Italy and Japan.

In recent months a range of manufacturers, including some from China and South Korea, have announced plans to launch automated driving functions such as electronic brake assist and lane guidance systems in mass produced vehicles. South Korean and Chinese OEMs have also been putting new prototype vehicles on the market. "The entry of non-industry players and new start-ups could create an even more dynamic market, as could acquisitions or cooperations between high-tech firms and industry incumbents," said Wolfgang Bernhart, Partner at Roland Berger.

Connectivity growing in importance

Though competition has intensified, Germany and the US remain the leaders in terms of research & development activity. Almost all of the countries do have a focus on testing automated vehicles in R&D, but the automotive nations are pursuing a range of different approaches in respect of connectivity. "In the US and Japan in particular, connectivity-related activities are focusing on building up the infrastructure that's needed to better connect vehicles," explained Ingo Olschewski, Senior Manager at fka. "These countries see vehicle connectivity as the fundamental key to achieving a higher level of automation."

Around one third of new cars in the US and about ten percent of cars in Europe are equipped with mobile internet. And the demand is rising: we are going to see more and more cars fitted with SIM cards, enabling vehicles to be connected with their surroundings and offering safety and entertainment features. "At the moment, though, cell phone networks don't have the bandwidth to process all of the data in real time, either that or the time lag is too long," said Bernhart. This is why automakers in the US are backing near field communication on a wireless LAN basis, which can be established without an existing cell phone connection. By contrast, European OEMs are making use of the existing mobile telecommunications technology, which is expected to offer new possibilities when 5G comes in from 2020 onward. But, as Ingo Olschewski, points out, "Regardless of which communications technology ends up winning out, manufacturers need to invest now if they want to be able to reap the future safety and efficiency related benefits of highly automated and connected vehicles."

No standardized legal framework in place

One challenge still facing OEMs is the fact that the legal framework is fraught with uncertainty. Even though Germany decided to amend the Vienna Convention in April this year, thus taking important steps toward the licensing of self-driving cars, the US still offers the best prerequisites for automated driving. One of the main reasons for that lies in the simplified licensing procedures. The US is also making progress on the subject of liability for cars on autopilot. America's traffic authority, the NHTSA, has spoken out in favor of the computer fundamentally being acknowledged as the driver as long as certain conditions are met, such as that the system has been proven to function without human intervention in all driving situations.

Germany is still holding back on that front, given that fully equating an autopilot system with a human driver would require a change in the law.Overall, the US, Germany and Sweden lead the rankings in the market indicator.

In the joint Roland Berger and fka index, this is the indicator that takes into account not only the legislative framework but also the sales figures for vehicles with highly developed ADAS systems in the different countries. France, Italy and Japan are the automotive nations that come in last.