"THE VEHICLE ELECTRONICS REVOLUTION: ARE YOU ON THE RIGHT ROAD?"
CALIFORNIA-NEVADA-ARIZONA AUTOMOTIVE WHOLESALERS ASSOCIATION MEMBERSHIP DINNER
THE PALMS, LAS VEGAS, NEVADA, OCTOBER 28, 2007

We know what's going to happen tomorrow. We know it today. It's no secret.

The revolution is here. Technicians are seeing electronics in their shop every day. It's a challenge and it's an opportunity.

There are three major consumer trends in this revolution: safe, green and connected.

Electronics control whatever they're trying to control to a much more precise level. They are smaller so you can package them better in a vehicle. And they are green technology because it doesn't draw energy from the engine.

Today's consumers don't want cars that are better. They expect it.

9 of the top 10 features consumers want are related to vehicle safety.

The ultimate goal in the auto industry is that you will walk away from almost every accident. This means blind side detection, rear cameras, lane departure warnings, smart cruise control. You're going to start seeing alcohol detection and drowsy driver detection. They can look at the driver's eyes, see how dilated they are, and decide to let the car start or not. They will triple the electronics in the car.

Today's vehicles are 99% cleaner than those of the 1970s. If you were to use a chain saw for one hour, it would emit the same amount of VOCs as driving a new car 600 miles.

There are 11 1/2 million alternative fuel vehicles. There are 60 models on sale today. 50% of U.S. drivers say they would consider a hybrid vehicle.

Hybrids use two power trains — one gasoline, one electric — plus the electronics to switch between the two. This is all opportunity for all of us.

The types of repairs expands opportunities from standard hard parts repair to include electronics and software. A vehicle has approximately 50 systems; 46 are run by computers. They are virtually computers on wheels. Today's cars have more electronics in them than the lunar lander.

I predict we will see low emissions diesels in California. The new generation of diesels are now dramatically cleaner than their predecessors.

It's a huge wave that is in front of us, a tremendous opportunity. Diesel engines are complex and they are incredibly precise. They present opportunities.

It's so important that tomorrow's service providers begin preparing for these technologies today.

You see more mobile electronics at the SEMA Show than at the Consumer Electronics Show. They are able to connect to the internet, satellites, and stream content. Their products have integrated digital receivers.

The aftermarket must realize that consumer expectations have caused the market to expand from the automotive market to the consumer market. I encourage you to look at this opportunity in a new way.

Telematics: two-way communications with the vehicles for monitoring safety, security, and diagnostics. I predict within five years all major automakers will have telematics for their vehicles.

We need to be able to hold onto our customers and serve that customer the same way they are served by the OEs. We need to establish a system that will work with a telematics business model.

It's a shift from hard parts to electronics. A vehicle has 100 million lines of software code.

We need to get used to a new business model: not selling hard parts but diagnosing systems and reinstalling and updating code.

We must acquire the need to act urgently. We must make a conscious decision to act.