CES showcases auto suppliers and startups

LAS VEGAS -- More than 2,000 miles from Detroit, what may be the youngest automaker in the world revealed its first car. Just don't call it a car. And don't call the company an automaker.

"We're not an automotive company," said Shaina Denny, marketing director for Eli, the Beijing startup that debuted last week alongside its all-electric Eli Zero production vehicle here at the CES technology expo. "It is a "car,'" she said, air quotations included. "But we're really trying to treat it as more of a device."

Automakers, suppliers and automaker wannabes descended on Las Vegas last week to talk to the media and the public, but primarily to talk among themselves. Meetings took place across the city throughout the week -- in rooms conveniently built into the company stands on the floor of the Las Vegas Convention Center, in meeting rooms and restaurants at Mandalay Bay, and in private suites in fancy casino-free hotels.

CES has become the show where startups and suppliers come to convince the world -- and the rest of the auto industry -- that they are on the cutting edge.

"This is an opportunity," said Mark Wakefield, managing director of the enterprise improvement group at AlixPartners. "If you don't know what Supplier A does, this is an opportunity to see some of that."

CES, formerly known as the Consumer Electronics Show, now just goes by its initials, stressing that it is not aimed at only consumers. The Consumer Technology Association, which runs CES, says that of the 177,000 people who attended the show in 2016, 7,545 were media and 68,331 identified themselves as senior-level executives.

Carmakers hip to a changing industry shifting toward software and futuristic concepts make a point to debut cutting-edge concepts and vehicles at CES. Now in its 50th year, the show remains the pre-eminent venue for showcasing the latest in gadgetry, home appliances, cameras, phones and whatever else companies can think of to connect to the Internet.

But while automakers might make their announcements in hotel ballrooms far from the show floor, CES remains the preferred venue of startups who feel more at home in a booth among dozens rather than on a stage in front of hundreds of journalists.

This leads to an eclectic mix among autocentric companies, a flavor of which was evident at a pre-show event titled "CES Unveiled." The types of companies that exhibited there ranged from connected-car technology to full-on self-driving vehicle concepts. Some examples include a smart-key manufacturer, an aftermarket gadget that enables gesture controls in the car, and a French technology company that has been pitching its vision of smart-city technology since 2007.

"At the time when I was talking with people about driverless cars, they were like, "Are you crazy?!'" said Fabrice Brassart, CEO of Reva2. His concept involves laying chip-enabled rubber lines on streets to intelligently guide cars through cities, absent of the lidar, radar and sensor systems currently used.

Some say the diversity in types of automotive companies -- some who might not consider themselves automotive at all -- strengthens the show.

"The thing that's unique at CES is that you're part of an ecosystem," said Tim Yerdon, global marketing director for Visteon.

Yerdon views CES as more of a natural venue for a veteran supplier such as Visteon than necessarily for carmakers. The company is marking its 18th year at the show.

"We were definitely here before automotive was in vogue," said Yerdon. "Tech in auto is cool again. It wasn't for a long time."

Visteon is showcasing its head-up display technology, including an augmented reality device where information is layered over visuals delivered by a camera. Before the show, it had lined up 60 carmakers with more than 300 executives to preview its technology.

The show has become an irresistible lure for suppliers that yearn for the glamour of high tech. Megasuppliers such as Bosch, Denso and Continental AG market soup-to-nuts product portfolios for connected, electrified and self-driving vehicles.

By contrast, specialists market just one product -- such as Mobileye's obstacle-detection software. And still others, including Visteon, aspire to enter a market segment in which the players can count on sales growth of 50 percent a year.

Self-driving vehicles "are one of the few areas where there is real growth for the next five to 10 years," said Sam Abuelsamid, an analyst for Navigant. Older safety features such as antilock brakes and stability control "are all saturated, now that they have 100 percent saturation. So it's a zero-sum game."

Companies that do create a high-tech aura -- such as Tesla or Mobileye -- enjoy stratospheric stock valuations compared with traditional automotive companies. So suppliers come to CES to send a message to investors.

"The financial markets like technology companies a lot more than old-line automotive companies," Abuelsamid said. "By creating a perception of themselves as tech companies, they can enhance their value."

Visteon, for example, saw a big stock jump once investors began guessing it might be a takeover target because of its technology, following the takeover of Harman International by Samsung. Samsung wanted a foothold in automotive infotainment, and investors speculated that Visteon might be the next takeover target.

The company's stock, which had been lagging all year, jumped 16 percent on the speculation. "Christmas came early this year," joked Visteon CEO Sachin Lawande during a Dec. 19 interview with Automotive News.

But Lawande had a more serious message for traditional suppliers with high-tech aspirations. "The value [for infotainment componentry] isn't the hardware, but the software," Lawande said. "So we are converting ourselves into a software company."

Indeed, 2,500 of Visteon's 4,000 engineers are software specialists, Lawande said. His point: It isn't enough to build a pavilion at CES. You've got to develop expertise.