When BMW introduced its new 3 Series sedan at the Paris Auto Show last month, it highlighted the digital technologies that are designed to give a major boost to the car’s connectivity. The immediate goal: to make the core BMW model – and other new models to come – more attractive, and give the premium brand better insight into what its customers want. With that information, BMW hopes to offer a compelling range of new digital products and services. The executive driving this new business is Dieter May, who joined BMW in 2014 after working for 23 years in various high-tech companies. In an interview at the Paris Auto Show, May, who as head of digital products and services, is also in charge of the digital customer interface, explained how BMW plans to use voice and other digital technologies to offer drivers and passengers a broad range of new, connected experiences.
BMW is introducing a new intelligent voice assistant in the 3 Series. Is voice going to be the most important way to interact with a car?
The quality has become good enough, both at home and in the car and it’s just a more direct interface, especially if you want to automate routines in the car and trigger several events. It’s just more convenient than pressing different buttons. I’m a big believer in voice and we are finding that you can drive really high consumer engagement with it.
But will it always be just one of many ways to interact with a car?
I think so. We still believe in a multi-modal approach and time will tell what is the preferred interface. We don’t believe in the all-or-nothing approach adopted by some of our competitors. Touch, for example, is nice for certain things, but other modalities work better in other situations. Customers will decide over time. We are offering everything from our iDrive controller to touch, gesture and voice. But we’re already seeing today that voice commands are getting pretty high usage.
In my experience, people will stop using voice as soon as it doesn’t work well a few times.
We feel the speech technology is good enough now to understand you in all types of environments. With personal assistants, though, voice is just the input mechanism. What’s important is the answers that you get and they get better over time. The customer needs to feel that there’s improvement, otherwise there is likely to be a break in his engagement.
Is voice technology still a competitive differentiator for automotive brands?
There are bits and pieces around voice that are differentiators. How it works is key. With Amazon Alexa, for example, we use our own voice input, but then connect to Amazon’s backend. The speech input is optimized for the car. The differentiation is more and more moving toward the use case and the experiences that are triggered through the voice input.
How does BMW aim to stand out from the competition with voice technology?
There is a certain speech recognition quality that you need to have. Google says it needs to be above 85 percent of the commands to be acceptable to the customer. Above that line, it just works, like an engine just works. Then, it’s all about the experience, which is the real differentiator. It’s all about the functions you can trigger and execute. The voice layer is just a neutral factor. That is different from a few years ago, when it was all about speech recognition.
And how is the connected technology in the new 3 Series better than the previous iteration?
The 3 Series has our new operating system and the next leap in technology. The personal assistant can recognize, for example, whether you are in the driver or passenger seat. This environmental aspect is really important. And if you combine voice with an interior camera, you make mood detection possible. That offers endless possibilities on how you can build experiences with that combination.
As artificial intelligence is needed to create these new experiences, how do you develop that kind of expertise?
The basic artificial intelligence technology comes from Microsoft, as we build everything on the Microsoft Azure platform. We use Microsoft’s AI toolset, but then we build the algorithms needed to create the personalized experience. That includes things like learning about destinations, where your home is, which kind of routings you prefer, which temperature you like. That gives you a personalized contextual experience and that comes from us.
How does your organization work with BMW’s corporate IT department, which is run by CIO Klaus Straub?
Klaus Straub is responsible for the backend. We have built a full-service operation that runs just like any internet company, with short development cycles, sprints, releases every eight weeks or so. We started from scratch to build a fully agile operation. The separation line with corporate IT is that the backend systems are part of the corporate infrastructure. We’re building the service infrastructure in Munich, Chicago and Shanghai.
So far we’ve talked about cars and drivers, but in future the car will drive itself. How does that affect what you are planning for the digital in-car experience?
The platform capability allows us to have a customer-centric rather than a vehicle-centric approach. The customer profile powers the car. We can engage with the customer and learn. The car traditionally was finished when it left the factory, but tomorrow it can start to live. That will be the big thing for the coming years. You can personalize the car all the time, keep it fresh through remote software updates. You can buy car functionality through the e-commerce store. That will allow us to change the overall business model from a point-of-sale approach to a lifecycle model. That’s very important to us. Digital allows us to build an engaged customer base. We already have 4 million customers with a BMW ID using BMW Connected. Nearly all of our new cars are connected.
And what will that mean for the people inside future driverless cars?
The interior of the car will change to become more of an extension to your living room. That also means that on all the displays you need to have more than just a map. That would be a bit boring. So it means you need to have a content-aggregation strategy to give people what they would like. Productivity is very important, which is why we have an agreement to have Microsoft Office 365 in the car. And having Amazon Prime content is also very important. It will let you do e-commerce in the car and buy on the Amazon.com website. We have the platform capability and are preparing to get the content play right.
Will that capability already be online in the new 3 Series?
With the help of our cloud platform, your profile will power the car. Whether you’re in your own car or a shared car, you always want to have the BMW experience. That’s why you take the car configuration with you on your smartphone. You can map the car through our app to BMW Connected and give you preferences, personalization and settings to your car. Ideally, when you get into a BMW, the car recognizes you have BMW Connected on your phone. It says ‘please start configuration of the car’ the way you want to have it; it plays your music, puts seats in the right position.
Is that functionality going to be available in the BMWs and Minis used for DriveNow car-sharing or for rented vehicles.
It’s in our interest to do that, but we have some integration work we need to do. Navigation is a case in point. When you have particular destinations on your phone, you should be able to bring them into the car. They shouldn’t be linked to the car, but to your profile.
How far along is the strategy?
We have the capability to do all this now and the next generation of car-sharing modules will make it possible. What’s neat about it is that the branding experience will be the same, regardless of the car you happen to be in.
How difficult was it to get traction within the BMW Group with your digital initiatives?
I was lucky because I brought along some colleagues that I had worked with and took over an agile software unit from Microsoft in Chicago. This meant we had an immediate R&D footprint and could show results quickly.
Connected and autonomous mobility is seen as a key driver of smart urban mobility. Are you involved in the discussions to make urban transportation more intelligent?
We have a lot of discussions with cities. Hamburg is a case in point, where we are rolling out a whole fleet of electric DriveNow cars. We try a lot of things, also when it comes to charging and parking. But we’re working more on the operational than on the conceptual level. We are keen to get things going operationally, so we can see whether they get traction with customers.
As digital initiatives quickly become a core business for automakers, what’s taking up most of your time?
We obviously need to properly manage the customer interface, so we won’t be in the same position the smartphone industry is. There, many players are having a hard time keeping control of the customer interface and that would be a huge issue for us. Therefore, we see a lot of differentiation potential from new concepts for car interiors and the digital experience. The other big issue is scalability. It’s all about scale and getting products out to the world fast. From a platform point of view, we have a global footprint with our presence in roughly 45 markets. In the car, you’re going to need a proper software platform as well, but it takes time before you have that across your whole fleet. And it’s a lot of work. But innovation will not stand still because car cycles are too long.
Do you see big differences in the way connected cars are being developed across different global regions?
China is the most advanced. People there want to have the experience they are used to everywhere else and adoption rates are really high. Chinese people don’t talk about horse power, but focus on how digital the car is. That’s a big driver of many things. In the US, you need to pay attention, because it is a leading internet market. And Europe is keeping up well, with lots of usage of the connected functions available through our platform. Globally, we added 2 million customers to our connected mobility platform. The activity level on the platform went up by more than 5,000 percent last year. That means that customers using it are using it more.
And which services do they use?
There’s a lot of use of the remote functionality. In Norway, for example, we sell a lot of BMW i3 electric cars and 80 percent of customers use BMW Connected on a daily basis. Digital charging services in BMW Connected are a major driver of digital customer engagement, which is very visible in Norway with its very high share of electric vehicles. We track which functions people use and we can analyze every experience. Then, we decide whether we should keep a function, improve it, or take it out. If a function is not used, we take it out.
Is it going to work like an app store?
In the 5 Series today, you already have a lot of personalization options and, with the intelligent personal assistant there will be even more options. An example is a high-beam assistant you can purchase through our e-commerce store. We will be able to make it available through a remote software update.
Interview and images by Arjen Bongard