TRAVERSE CITY, Mich. -- Silicon Valley and Detroit need each other -- for data and for image enhancement, Lear Corp. CEO Matt Simoncini says.
Simoncini, speaking Wednesday at the CAR Management Briefing Seminars, said collaboration between tech companies and automakers will be key as the auto industry changes. And what each side has to offer the other is data.
He said Google, Apple, Uber and others are diving into the auto industry because of what they can learn about auto customers -- and how they can monetize that information.
“They want in because this is an industry that generates data,” Simoncini said. “It’s an opportunity to make the car safer and have a more enjoyable driving experience.”
Meanwhile, automakers need to know what to do with the trove of data they are generating on consumer preferences and driving habits.
“While automotive companies create the data, we haven’t been great on how to manage it,” he said. “So we rely on tech companies to manage it.
“The data’s going to become almost as important a revenue stream as the assembly of the autos.”
Lear has been developing power and data management capabilities, and has rebranded its electronics divisions E-Systems to reflect the evolution.
For years, Lear has been making car seats smarter, using biometric sensors to monitor driver and passenger positions. The sensors can track a passenger’s heart rate and other biometrics. Lear’s most high-tech seats can automatically position themselves to a person’s preset position with the touch of a smartphone button.
“It’s the first level of connectivity,” Simoncini said.
But having more data can help auto companies with another problem -- making old manufacturing companies a bit hipper in the eyes of the public, Simoncini said.
That could have big financial implications on Wall Street. Most automakers have struggled in recent years to boost their share prices, while the stock prices of tech companies, or even nontraditional automakers such as Tesla, have soared.
The five largest automakers have a combined market cap of about $400 billion, Simoncini said, while the five largest tech companies have a combined market cap of $3 trillion.
“We need them because we want to change our image, and our image is why we’re at a value discount,” he said. “It’s why there are ridiculously low multiples for the car companies, even though they’re successful year after year and have fixed their balance sheets. We need to change our perception.”