Toyota Prius Recall--A Software Glitch?

I am sure you have been hearing about possible software glitch that may be the cause of Toyota's impending recall of third-generation Prius model automobiles although technology does not seem to be the root cause of the broader recall by Toyota.

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As automobiles become more digitized--especially with the forthcoming shift to hybrid power-trains, we will see more cases of software becoming critical differentiators of automotive performance, reliability and safety.  This is a new competency that the automakers need to develop, refine and master as subsystems as shown in the table below are knitted together by powerful and complex software.  

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It is worth thinking about the implications of the following paragraphs excerpted from the Discovery News article.

The cost of electronics as a percent of vehicle costs climbed from around 5 percent in the late 1970s to 15 percent by 2005 (excluding final assembly costs). For hybrids, where the amount of software needed for engine control alone is nearly twice as great as that for a standard car, the cost of electronics as a percent of vehicle costs is closer to 45 percent. Within 10 years, some experts predict that the percentages relating to the cost of electronics as a percent of vehicle cost are expected to rise to 50 percent for conventional vehicles and 80 percent for hybrids.
....For today’s premium cars, ”the cost of software and electronics can reach 35 to 40 percent of the cost of a car,” states Broy, with software development contributing about 13 to 15 percent of that cost. He says that if it costs US $10 a line for developed software -- a cost he says is low -- for a premium car, its software alone represents about a billion dollars’ worth of investment.

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It is clear to see the impact and implications of IT strategy on business strategy but the real question is: What will be the shape of the future automobile sector and what IT-enabled competencies will differentiate winners from the also-ran? 

Update (Feb 9, 2010): It is now official that there is a software glitch in the Prius hybrid--which will be fixed as part of the recall.