MEMA, the association representing the vehicle supplier industry, recently held its annual 2023 Aftermarket Technology Conference in Atlanta, Georgia. 

The event, hosted by Genuine Parts Company (NAPA) at their world headquarters, brought together industry leaders to learn about emerging technologies affecting the automotive aftermarket, including e-commerce, EV charging, data analytics, AR/VR, blockchain, and artificial intelligence.

A new addition to the agenda this year was the MEMA Aftermarket Start Up Challenge that gave 7 autotech startups the opportunity to pitch their innovation to North American suppliers. Capstone was proud to be a sponsor and our president, Carl Norman, was on the evaluation panel.

These startups, potentially pivotal players in future auto aftermarket M&A, were chosen based on innovation, potential, and traction. They include:

  • 3DK: Ultrasonic technology to focus on manufacturing parts
  • Accufacture: The 1st standard Robotic 3D printers on the market
  • Bringoz: Automated Delivery Management Platform for Parts
  • Cochl: A deep-tech startup focusing on sound AI
  • Legacy EV: EV Industry Leading Educator and Parts Distributor
  • My Battery Health: Revolutionizing battery health diagnostics
  • Work Truck Solutions:  Interconnecting the commercial vehicle ecosystem

Congratulations to Legacy EV which was voted the winner. All of the companies are doing interesting work, and we encourage you to check them out. And if you’re an autotech startup, keep an eye on MEMA for next year’s call for entry. 

To GPS or Not GPS

The Early Days of GPS in Vehicles

Capstone is over 30 years old, so we’re old enough to remember using paper maps. We’ll also admit to printing directions from the internet. We won’t argue if you wanted to say the Global Positioning System, aka GPS, is one of the most significant technological advancements we’ve seen in our lifetimes. 

The evolution of GPS technology in vehicles is just one aspect of the broader changes in the automotive sector, which are often driven by auto aftermarket M&A activities.

GPS vs. Smartphone Navigation

Do you remember when cars started coming with GPS and it was the cool new feature you had to have? Automakers began experimenting with navigation systems starting in the 1960’s, but it wasn’t until 2000 when the GPS signal was made available for public use that it really took off.

The Shift in Consumer Preferences

Automakers had a free run of the dash until Apple launched the smartphone era in 2007. (Before you @ us, yes, we know smartphones have been around since the 1990s, but we’re recognizing 2007 as the moment they gained widespread consumer acceptance. 

Smartphone sales in 2006 were in the 64 million range and Apple essentially doubled that number in 2007.) As the smartphone technology took off, consumers realized their smartphones were better at doing things like navigation and playing music than the in-dash unit the automaker sold them for several times what their phone cost. 

You can see this development in market research data from the time. Berg Insight, a Swedish research company noticed this trend in 2010. And this Statista chart shows the rise and fall of “automobile GPS equipment” revenue between 2005 and 2010. 

Automakers’ Response to Changing Trends

Long story short, carmakers have been trying to reclaim your attention ever since. Apple says 79% of US car buyers would buy a car only if it had CarPlay, or presumably Android Auto, which considering 98% of new cars come with CarPlay, it’s harder to find something without it.

Many eyebrows were raised earlier this year when General Motors announced it was going to move away from the projection model and would restrict access to CarPlay and Android Auto. This seems like a case of the headlines being more shocking than the actual details. 

Emerging Innovations and Future Possibilities

GM wants to build a native platform and run the few apps that people use in the car, which kind of sounds like a good idea if you can skip that “hang on, I have to wait for my phone to connect” moment when you get in your car. 

And if Apple says 80% of people want CarPlay, what are the odds GM has research showing consumers are open to newer and better tech? Who doesn’t like shiny new things?

Speaking of shiny things, Chinese automaker NIO recently made us go “hmm” when it launched its own smartphone. NIO is expecting half of their users to make the switch. We’ll have to wait to see if the gamble pays off, but it’s certainly one way to reclaim the driver’s attention and make the transition from in-the-car to out-of-the-car seamless. 

The Geely-owned, Swedish-based Polestar is planning on releasing a phone in conjunction with its China-market SUV at the end of the year. Is it anticlimactic if Geely owns the cell phone maker?

So this long and winding road we’ve been on is going to become even longer and windier. Can GM supplant CarPlay/Android Auto? Is NIO on to something? Does the thought of having to own multiple smartphones make you angry? 

Is it a fools’ errand to try and make even more money off the dashboard? Or will somebody create a screenless, artificial intelligence-powered solution that will beat all of them?

As we witness continuous innovation and technological advancements, the role of auto aftermarket M&A in shaping the future of the industry becomes increasingly significant. If you’re ever in need of M&A services, we’re here to help.