Auto industry supply chain, Tesla as maverick and cars as an ad platform. A podcast conversation with Roger Lanctot.
Strategy Analytics’ Roger Lanctot is director of automotive connected mobility, and a self-described, “not a car guy.” However, Lanctot is the go-to guy when you want to understand what is going on in the industry, especially when it comes to future trends, infotainment, mobility and connected cars.
Roger joined BIA for a Leading Local Insights podcast interview where we discussed disruptions to the auto supply chain, how Tesla can buck the overall segment trends and the future of the automobile as an ad platform.
Supply chain disruptions in the automotive industry suffer the same general fate as other industry segments reliant on sourcing parts for final assembly. Cars also suffer the specific fate of those products reliant on semiconductor chips.
According to the New York Times, a modern car may have 3,000 chips in it. Lanctot elaborates, “The chips that go into cars are a niche that is very specialized to meet safety standards, and require ten or more years of support.” With the increasing demand for all kinds of chips for consumer electronics, fab plants are prioritizing those newer, higher margin chips. Ultimately, Lanctot says, “I’d estimate the chip supply chain will be disrupted for a longer rather than shorter period of time.” Not looking like major relief to the chip shortage in auto will much progress through 2022.
While the overall U.S. auto industry is in a slump, sales down an average of 22 percent in 3Q2021 versus 3Q2019, Tesla is up 104 percent. The slump has driven significant declines in auto ad spending that have been hurting ad-supported local media. While Tesla is the maverick in the group with its success, it does not spend even $1 on advertising, so no help to media sellers there.
The final topic we discussed with Lanctot in the podcast was his thoughts on how autonomous cars will evolve as ad platforms. Newer cars have dual-facing cameras that can detect drowsy drivers for safety measures and evaluate what’s going on outside the car. These cameras can also be used for advertising. As one article put it, Get Ready for In-Car Advertising. The occupant facing camera can provide context for ad-targeting. “What Ford wants to do is leverage those cameras to also keep an eye out for passing billboards, and then use image recognition to put a copy of the advertisement on a vehicle’s infotainment screens so it’s visible to the driver and passengers for longer.” Lanctot is confident most cars will become sophisticated ad platforms. “Although, I don’t expect to see ads in Teslas, they have a different business model.”
To listen to the podcast, click here.