US and Germany speed ahead in early race to lead automated vehicles market

03 August 2016

Ripe for disruptive innovation and set to change the world, the automated vehicles industry is brimming with potential. At present the US and Germany are masters of this exciting new space but a new report indicates that other markets are quickly catching up.

Automated vehicles (AV) represent an industry flush with potential, both for drivers and for the broader consumer and tech marketplaces. Autonomous cars have been presented as no less than a revolution in the worlds of transport, connectivity and smart cities.

Much is to be gained in securing a competitive advantage in the AV field. Leading global consultancy Roland Berger worked closely with Forschungsgesellschaft Kraftfahrwesen Aachen (fka) to produce their ‘Automated Vehicles Index’ for Q3 of 2016. Analysts measure the respective strength of nine countries with regards to technological developments by OEMs and AV’s degree of market penetration.

AV Index of industry and market

The US and Germany are clear leaders amid a generally competitive AV landscape. Germany excels in a broader range of categories, while the US can count on a deeper capacity in several specific fields. Sweden rates highly due to advanced AV market penetration, while France has strong research cards but little in the way of AV infrastructure.

The UK secures fourth spot in the rankings through all-round consistency, neither excelling nor slipping up across all metrics. China, Japan and South Korea lag behind the US and Europe on both the research and legislation fronts but increased spending could change that dynamic in the near future.

OEM activities in AV research and implementation

Tight competition between the US and Germany comes down to the distinction between industry and market performance. The US market excels, dominating the field in terms of absolute AV sales figures. German OEMs, however, can offer deeper technological capacity within a more advanced AV fleet.

AV Index of industry and market

Future disruption

US sales dominance can’t be taken for granted. Relative to total market share of vehicles, Germany’s AV industry performs better. In China car sales are soaring and expected to take newer AV models along for the ride, especially after 2025.  

AV index market potential for vehicles

Wolfgang Bernhart, Partner at Roland Berger, was also keen to stress that in 2016 the AV marketplace is a very incomplete puzzle, observing that “The entry of non-industry players and new start-ups could create an even more dynamic market, as could acquisitions or cooperations between high-tech firms and industry incumbents.”

Other crucial factors governing the AV space noted in the Roland Berger/fka report are the political dimension of legislation catching up with technological progress, and the growing connectivity divide between the US and Europe. The US is investing heavily in Dedicated Short Range Communication (DSRC) based on wireless LAN, while Europe is preparing for the 2020 launch of a 5G network. The two technologies are of course complementary and will mark a dramatic shift in the way people and drivers communicate.


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Consultants can increase productivity with automated vehicle programs

16 January 2019

More and more people – including consultants – are driving their own cars for work. According to the U.S. Department of Transportation, the personal vehicle comprises 81% of all business travel. Whether it’s to meet with clients, attend industry conferences or participate in other field-related duties, no work-related travel method comes close. Tim LeBrun, Senior Regional Sales Executive at Motus, explains how consultants could increase their productivity with automated vehicle programs. 

Advisors and independents consultants often spend large portions of their time on the road. They commonly meet with clients onsite or review progress with them until a project is complete. If a client is local, this can mean several trips between the consultant’s home and the client’s office each week. Large amounts of paperwork – including mileage logs and recaps detailing how the consultant spent his or her day – accompany these trips. These logs ensure consultants are compensated fairly for any business-related expense incurred as a result of their work.

Unfortunately, many consulting firms still use manual, tedious and time consuming processes that eat up productivity. Consider this: if each employee spends just 12 minutes a day manually tracking their mileage, that equates to a full hour of work in one week or 52 hours a year. That’s more than a full week’s worth of work spent on basic data entry alone. 

While trite, the time-old adage “time is money” rings true for many consultants. The less time they spend tracking mileage by hand, the more they can spend completing billable work on behalf of their clients. As such, consulting firms need to think strategically about the processes they use to reimburse employees for any driving expenses incurred while on the job.

Consultants can increase productivity with automated vehicle programs 

From Excel Spreadsheets to Vehicle Programs

In today’s increasingly mobile world, many consultants choose to use their personal cars for business. When reimbursing for the business use of personally-owned vehicles, firms can implement vehicle programs that track, process and compensate their employees without all the tedious work that manual reporting entails. There are three major vehicle program options that provide vehicle reimbursement for companies whose employees choose to drive their own car for work. These include:

Cents-per-Mile (CPM) Programs

These programs reimburse workers at a cents-per-mile rate for business travel in their personal vehicles. This program works best for firms whose consultants drive 5,000 miles or less each year. Workers tend to be over reimbursed if their mileage is significantly higher. 

Flat Car Allowances

These programs reimburse all consultants and staff the same dollar amount. How many miles they actually drive has no impact. Everyone receives the same – for example, $500 per month. While these programs are simple to implement and require no mileage tracking whatsoever, they are not the most accurate – or fair – option available. Employees can drive a varying number of miles based on how far their clients are, how often they need to visit clients and the length of their project. For example, one advisor may drive 500 miles per month while another drives 900 per month. Paying both employees the same amount means that the low-mileage worker may be overpaid and the high-mileage worker is underpaid. Neither is good for employee morale or a firm’s bottom line. 

Additionally, flat car allowances are subject to both Federal Insurance Contributions Act (FICA) taxes and income taxes. This means that providing a flat car allowance of $500 costs an organization $538 after taxes, while employees end up taking home roughly $330, depending on their tax bracket.

Fixed and Variable Rate (FAVR) Programs

These programs provide a customized reimbursement to each worker based on their monthly business mileage and individualized fixed and variable costs. While mileage is perhaps the biggest expense, workers incur a whole host of additional expenses as they drive. These include fuel, maintenance costs, insurance premiums and depreciation. All must be accounted and reimbursed for. By reimbursing each employee based on the true cost of operating their vehicle, FAVR is the most accurate and fair of the vehicle program options. 

In addition, FAVR reimbursements can be paid tax-free – meaning firms spend less in taxes, while employees can take home the full amount of their reimbursement. 

Location-based technologies

To maximize vehicle program efficiency, firms should also consider implementing location-based technologies in conjunction with their program. These technologies automate mileage tracking in the field so that trip-by-trip mileage can be calculated more accurately. They also digitize travel data, including route optimization, trip and stop durations, and territory efficiency. This allows their employees to optimize driving patterns, improve procedures and ultimately maximize their productivity. When paired with a FAVR program, automated technologies are able to calculate reimbursement rates for each employee based on data that tracks exactly where that employee drives and how much they drive. 

The math is simple: the less time consultants waste, the more they can get done and the higher the margin of a consulting firm. For consultants looking to reduce the number of hours they spend on administrative work to increase their billable hours, leveraging automated technologies with the proper vehicle program can set them on the right path.