Vehicle infotainment systems have been advancing at a rapid pace driven by the development of new technologies. Once composed of AM radios and cigarette lighters, infotainment systems now include voice controls, navigation, parking assistance, and much more. The infotainment technologies market is dominated by a select few auto suppliers, but Tesla is disrupting the supply chain by manufacturing much of its own technologies in house. While Tesla may have started a trend that some major manufacturers are following, this may be a non-factor for increasing vehicle sales. Studies show that many consumers pay little attention to their infotainment systems, often finding them confusing. In the age of the smart phone, most consumers prefer to use their smart phones for many of the services that in-car infotainment systems have to offer such as navigation and music.
The infotainment sector is dominated by top suppliers such as Denso, Harman, Delphi, Blaupunk GmbH, and Continental. Audio Systems manufacturers such as Bose and Kenwood have also found a foothold in the market due to in car audio being possibly the most recognizable component of the infotainment system. While these manufacturers have solidified their place in the supply chain, Tesla is disrupting the status quo. In making the model S, Tesla reportedly “spent almost as much time designing the infotainment system as they did the car itself”. Some manufacturers such as Ford are following Tesla’s lead in manufacturing infotainment systems partially in house. Other manufacturers such as Volkswagen and Audi maintain collaborative relationships with suppliers lower on the supply chain to produce their infotainment systems. While it seems that the supply chain for infotainment in vehicles is changing, this may have less of an effect on overall car sales and customer satisfaction than Tesla would hope.
A JD Power study showed that “more than 50% of car owners never used their infotainment systems after 90 days of purchase”. Consumers find these systems too technical and difficult to understand. While many cars now come with GPS navigation as a part of the infotainment system, many consumers prefer to use an application such as google maps on their smartphones. This does not mean that infotainment systems are obsolete and have no impact on a consumers decision to purchase a vehicle. Consumers are more satisfied with collision prevention systems such as rear view backup cameras and lane assistance. Manufacturers may want to focus more on collision prevention technologies than fancy dashboard entertainment systems.