How automakers can benefit from EMS?


The automobile industry, a growing market for EMS

Previously, electronic manufacturing services (EMS) mainly targeted the IT industry. However, recent studies show that the automobile industry is a growing market for EMS companies. On one hand, EMS are underutilized despite having knowledge and experience in electronics, in printed circuit board assembly and being qualified in engineering, designing and prototyping. These attributes are what make EMS a key player in maintaining high quality and productivity.

On the other hand, the automobile industry is facing increasing demands for personalization which requires flexible environmental management for more vehicle functionalities and, in turn, calls for more electronic components. The industry is also dealing with a lack of experience in electronic manufacturing as well as the constant pressure of keeping a competitive edge (i.e. being the first to launch new innovations). This is where EMS can come into play and improve supply chain management and mass production. Overall, both EMS and automakers can therefore benefit from each other’s strengths and needs.


Challenges in the automobile sector

1. The race to innovation

There is a fierce competition between automakers who are aiming to bring the new feature to the automobile market that will win over consumers and give them the competitive edge they’re looking for. The winner of this race must be the one who comes up with the next big hit and is first to introduce it to the market. An efficient manufacturing process is therefore crucial for an automaker if they wish to secure this market. For instance, environmental regulations are putting pressure on the automobile industry to build vehicles that consume less fuel. Automakers are also expected to build cars that can connect to cellular devices. While customers want this sort of customizable innovation, automakers have to ensure that these innovations/electronic manufacturing solutions remain affordable.

2. Safety of autonomous cars

The progress made in recent years regarding connectivity and artificial intelligence is proving to be a challenge for automakers. The idea of self-driving cars has been becoming more real as time goes by and automakers must prove to consumers and lawmakers that they are safe. Every electronic component must, therefore, function properly to ensure the safety of the final product.

3. Laws and regulation

For autonomous cars to become a daily occurrence, laws, regulations and even infrastructure will need to be updated. Privacy data laws are also an issue when it comes to intelligent vehicles due to data collection (driving habits, location, etc.). Many industries are struggling with this new regulation and the automobile industry is no exception. The European Union’s GDPR (General Data Protection Regulation) impacts how private data is managed, and automakers could be heavily fined if they do not comply.


Direct benefits for automakers

Automakers can benefit from EMS in several different ways. Since they’ve got strong expertise in PBCA (printed circuit board assembly), they offer high-volume and low-volume manufacturing as well as standard procedures that help with respecting regulations and providing high-quality products. Additional benefits EMS provide to automakers are cost savings and productivity gains. They’re experts in their field and ensure quality products as well as lower prices and an optimised supply chain management.. They also diminish the space needed in the assembly factory which allows automakers to cut on costs.

With the emergence of autonomous vehicles and connected cars, the industry is going to look very different in a few years. It is essential for automakers to find ways to support new topline growth strategies while sustaining cost efficiencies and profitability. For years we have been providing, engineering and manufacturing services to our customers. At Asteelflash, we understand the automobile industry’s needs and constraints, working with big and small actors of the automotive industry for many years.

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