Car makers try to muscle in on tech
by Stefan Nicola,
2016-02-24 05:50:51.0
CAR makers are becoming a familiar sight at tech shows, where they’re rolling out new models to woo a generation of consumers who question the need for a car that only gets them from A to B.
At the Mobile World Congress in Barcelona this week, Ford Motor unveiled a new vehicle for Europe, as well as in-cockpit technology; Volvo is showing off a keyless car; and Mercedes-Benz Formula One driver Lewis Hamilton will appear on a panel with the president of chip maker Qualcomm.
Eager to win over millennials who may care more about the latest Apple iPhone than a redesigned Mustang, car makers are trying to become more tech-savvy and shed their image as 20th-century metal benders. The pivot towards the younger set comes amid a slowdown in China, competition from Tesla Motors — which sends automatic software updates to the car’s command centre — and a boom in ride-sharing services such as Uber that have left car companies anxious about growth and eager to try out a new crop of digital products and services.
"Car makers have a very narrow window of opportunity to win over Generation Y," says Richard Viereckl, an analyst at PwC who co-authored a 2015 study on connected cars.
"They’re at these technology shows to portray their brands as hip, and with mounting competition from the likes of Apple, Panasonic and Sony, they’re fighting to keep the attention of and access to their customers."
By 2022, 345-million vehicles worldwide will be connected to the internet, nearly four times more than last year, according to IHS Automotive. In six years, 98% of the cars sold globally would be connected, up from 30% last year, the consulting firm said.
The trend is driven by customer demand: three in four consumers say they consider connected car services an important feature in their next vehicle purchase, AT&T and Ericsson said in a report in October.
The risk for car makers is that Apple, Google and Microsoft will conquer the connected-car business with operating systems and apps that people are familiar with. Google and Apple already offer in-car infotainment systems with Apple CarPlay and Android Auto, and Google is at the forefront of developing self-driving cars.
"Google and Apple have a good chance as anyone at grabbing the car ecosystem," says Kevin Curran, a computer science professor at Ulster University in Northern Ireland.
"Cars today are computers with wheels, and tech companies know that field all too well."
To fend off the threat, car makers are set to make "big decisions" over the next 24 months, striking co-operation pacts and increasing spending on research and development, as well as mergers and acquisitions, to get ahead, says Thilo Koslowski, who heads the vehicle practice at researcher Gartner. Those who do not are at risk of being left behind, he says.
General Motors debuted its Chevrolet Bolt electric car at the Consumer Electronics Show in Las Vegas last month, before taking it to the Detroit car show a week later. Such moves are aimed at highlighting vehicles’ software and connectivity features, with car makers adding iPad-like dashboard touch screens and moving beyond to even more futuristic systems.
German car makers BMW, Audi and Daimler last year teamed up to buy Nokia’s map business, a response to Google and Apple. BMW’s iDrive system brings apps, radio and navigation to the dashboard, reducing knobs and buttons for a user experience that is closer to that of a smartphone. Porsche’s Mission E concept car unveiled last year features eye-tracking and gesture-control functions, which include holograms that allow the driver to grab apps out of the air.
At Mobile World Congress, Ford introduced a new model of the Kuga sports utility vehicle for the European market with updated communications, entertainment and driver-assistance features. It also outlined its latest plans under the umbrella of Ford Smart Mobility, the company’s initiative encompassing areas such as connectivity, autonomous vehicles and big data.
"We are transitioning from an auto company to an auto and mobility company," Ford CEO Mark Fields says. The company is tripling its engineering investment in technologies making cars semi-autonomous, Mr Fields says.
It is a tall order for car makers contending with fleet-footed tech companies. The disruption brought by the connected car is similar to what happened 100 years ago, when the motor car successfully challenged the horse and carriage industry, Mr Koslowski says.
"Auto makers have an opportunity to spark a renaissance of the car. They are being challenged and they have to be careful they don’t turn into a horse and carriage industry."
Bloomberg
CONNECTED: A worker demonstrates the The Harman International Industries Rinspeed Budii concept car at the Mobile World Congress in Barcelona, Spain, on Monday. Picture: BLOOMBERG
CAR makers are becoming a familiar sight at tech shows, where they’re rolling out new models to woo a generation of consumers who question the need for a car that only gets them from A to B.
At the Mobile World Congress in Barcelona this week, Ford Motor unveiled a new vehicle for Europe, as well as in-cockpit technology; Volvo is showing off a keyless car; and Mercedes-Benz Formula One driver Lewis Hamilton will appear on a panel with the president of chip maker Qualcomm.
Eager to win over millennials who may care more about the latest Apple iPhone than a redesigned Mustang, car makers are trying to become more tech-savvy and shed their image as 20th-century metal benders. The pivot towards the younger set comes amid a slowdown in China, competition from Tesla Motors — which sends automatic software updates to the car’s command centre — and a boom in ride-sharing services such as Uber that have left car companies anxious about growth and eager to try out a new crop of digital products and services.
"Car makers have a very narrow window of opportunity to win over Generation Y," says Richard Viereckl, an analyst at PwC who co-authored a 2015 study on connected cars.
"They’re at these technology shows to portray their brands as hip, and with mounting competition from the likes of Apple, Panasonic and Sony, they’re fighting to keep the attention of and access to their customers."
By 2022, 345-million vehicles worldwide will be connected to the internet, nearly four times more than last year, according to IHS Automotive. In six years, 98% of the cars sold globally would be connected, up from 30% last year, the consulting firm said.
The trend is driven by customer demand: three in four consumers say they consider connected car services an important feature in their next vehicle purchase, AT&T and Ericsson said in a report in October.
The risk for car makers is that Apple, Google and Microsoft will conquer the connected-car business with operating systems and apps that people are familiar with. Google and Apple already offer in-car infotainment systems with Apple CarPlay and Android Auto, and Google is at the forefront of developing self-driving cars.
"Google and Apple have a good chance as anyone at grabbing the car ecosystem," says Kevin Curran, a computer science professor at Ulster University in Northern Ireland.
"Cars today are computers with wheels, and tech companies know that field all too well."
To fend off the threat, car makers are set to make "big decisions" over the next 24 months, striking co-operation pacts and increasing spending on research and development, as well as mergers and acquisitions, to get ahead, says Thilo Koslowski, who heads the vehicle practice at researcher Gartner. Those who do not are at risk of being left behind, he says.
General Motors debuted its Chevrolet Bolt electric car at the Consumer Electronics Show in Las Vegas last month, before taking it to the Detroit car show a week later. Such moves are aimed at highlighting vehicles’ software and connectivity features, with car makers adding iPad-like dashboard touch screens and moving beyond to even more futuristic systems.
German car makers BMW, Audi and Daimler last year teamed up to buy Nokia’s map business, a response to Google and Apple. BMW’s iDrive system brings apps, radio and navigation to the dashboard, reducing knobs and buttons for a user experience that is closer to that of a smartphone. Porsche’s Mission E concept car unveiled last year features eye-tracking and gesture-control functions, which include holograms that allow the driver to grab apps out of the air.
At Mobile World Congress, Ford introduced a new model of the Kuga sports utility vehicle for the European market with updated communications, entertainment and driver-assistance features. It also outlined its latest plans under the umbrella of Ford Smart Mobility, the company’s initiative encompassing areas such as connectivity, autonomous vehicles and big data.
"We are transitioning from an auto company to an auto and mobility company," Ford CEO Mark Fields says. The company is tripling its engineering investment in technologies making cars semi-autonomous, Mr Fields says.
It is a tall order for car makers contending with fleet-footed tech companies. The disruption brought by the connected car is similar to what happened 100 years ago, when the motor car successfully challenged the horse and carriage industry, Mr Koslowski says.
"Auto makers have an opportunity to spark a renaissance of the car. They are being challenged and they have to be careful they don’t turn into a horse and carriage industry."
Bloomberg
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