ADAC Automotive, a Grand Rapids-based Tier 1 automotive supplier, is working toward a new strategy that will bring supplier-initiated technological advances into the sector.
The company has entered into an agreement to create a global joint venture that will design, develop and manufacture radar-based sensing for use in the automotive marketplace. The RADAC Automotive joint venture with Lawrence, Kan.-based Ainstein Inc. held demos of its first patent-pending design to provide hands-free vehicle access earlier this month at the annual Consumer Electronics Show in Las Vegas.
“We were in the process of really looking for radar expertise because we wanted to combine the technology with gesture access, rear crash sensing, backup assist and lane departure, and integrate these kinds of technologies into our current product mix,” Jeff Ackerman, executive vice president of global business development at ADAC, told MiBiz.
The technology that RADAC will produce uses millimeter waves, or mmWave, that occupy the frequency spectrum between microwaves and infrared waves. The waves, which also power 5G networks, can be harnessed and utilized in many forms of sensing devices.
Historically, ADAC has manufactured automotive door handles and exterior mirrors, and the company is betting that radar technology will be a valuable add-on for future vehicle models.
“Through our own understanding, we came to the conclusion that radar was going to be the right technology for this kind of application,” Ackerman said. “We all know the business is changing and we have to be ready for it. Our number one product area is access to the vehicle, so no question that product theory is changing to be more of an electronic space to fit with autonomous vehicles.”
The radar technology can be used for detecting the presence, direction, distance and speed of objects. Unlike other sensing technology, radar is not affected by conditions such as rain, snow, fog and dust, making it more reliable for real-world automotive applications, according to Andrew Boushie, vice president of strategy and partnerships at Ainstein.
Although Ainstein develops radar technology for multiple industries, the RADAC joint venture will be “specifically and intentionally” focused only on automotive radar sensor technology, Boushie told MiBiz.
“We have a target for the automotive industry because we see the volumes that can be produced within automotive compared to other industries,” he said. “We’ve developed sensor modules for a number of different industries, including aerospace, IoT and automotive. This RADAC joint venture will pull out all of our automotive IP from Ainstein and it’ll pull it into the RADAC joint venture, so any automotive-related opportunity that we pursue will actually be pursued by RADAC.”
ADAC, which recently moved into a new headquarters and R&D facility in Cascade Township, will fund the joint venture. Both companies will have an equal stake in advancements in the automotive space made by Ainstein’s engineering team.
“As we develop radar as a product for the vehicle, we’re going to have direct access to applications on the vehicle, via ADAC, because that’s what we do today,” Ackerman said.
Technology continues to be a major driver of global dealmaking in the automotive industry, which “faces a paradigm shift where technology is at the forefront of the product and customer experience,” according to an October report from PricewaterhouseCoopers.
However, some companies in the supply chain are being wary in watching how those deals pay off, which is leading some to consider other forms of partnership.
“Many, seeing the rising cost to develop and the alternatives brought to market, are partnering with others to share the cost burden and strategically align market players to proven technologies,” the report’s authors wrote. “…[W]e expect further alliances to help fuel the next round of investment and development, with others continuing to make technological bets to strengthen their product portfolios and capabilities.”
As such, joint ventures like RADAC could become more the norm as suppliers “think twice” about their deals.
In recent years, acquisitions have been a common strategy among automotive suppliers hoping to scoop up emerging technologies and break into new markets before their competition. That was the case in 2018, when Grand Rapids-based Burke Porter Group, a Chinese-backed manufacturer of dynamometers and other industrial equipment, went on an international acquisition spree, including for Van Hoecke Automation, a Belgium-based supplier of production automation.
As well, technology acquisition played a central role in DENSO International America Inc.’s 2017 deal for Holland-based startup InfiniteKey, a developer of phone-as-a-key technology.
Auto suppliers’ investments in tech startups have grown as well. Faurecia Ventures, the Silicon Valley-based investment arm of global automotive supplier Faurecia SA, invested in 2017 in Holland-based Al Sentis LLC, a developer of touch-control technology. The next year, Zeeland-based Gentex Corp. took an equity stake in Boulder, Colo.-based software-as-a-service provider Yonomi to expand Gentex’s vehicle-based technology to work with home automation devices.
The joint venture between ADAC and Ainstein is a different path in the same race to win with technology in future vehicles, but both companies are hopeful that equal stakes and a shared partnership will result in a better finish.
“(RADAC) is more of a partnership rather than a one-way street where we would go acquire somebody and say, ‘You’re going to do this, you’re going to do that,’” Ackerman said. “This gives us both the opportunity to control our own destiny.”