Porsche is not content to just continue its success as a profitable maker of premium sports cars. It wants to be an early adopter when it comes to new technologies such as blockchain, artificial intelligence and virtual and augmented reality.

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Porsche has developed a AR app that lets customers look directly inside the car (Photo: Porsche)

At a press briefing last month, the carmaker, part of the Volkswagen Group, showed a few of these promising new technologies. Some are nearing introduction, while others are still in the experimental phase.

“We will never forget our DNA, but we want to connect it with the future,” said Porsche’s head of sales and marketing, Detlev von Platen. He stressed, however, that “the famous Porsche experience will continue to come first.”

During a day of demonstrations, Porsche specialists showed a range of digital technologies that included a blockchain-based way to open and close a vehicle; a neural network that uses artificial intelligence to detect vibration anomalies in machines and systems; a powerful augmented and virtual reality option for car showrooms; and an expanded Porsche Connected ecosystem.

Underscoring the importance of the digitalization efforts, Porsche has upped its annual IT budget from less than 300 million euros to around 450 million euros. Lutz Meschke, Porsche’s finance director, who is also responsible for all IT, said a major part of the increase reflects increased IT spending. Porsche CIO Sven Lorenz, who implements IT strategy at the carmaker, reports to Meschke.

Meschke cited five IT priorities for Porsche: Connectivity, vehicle automation, mobility, sales and marketing and corporate digitalization.

The IT department is playing an ever bigger role in all of these areas. “IT is taking on new functions,” Meschke said, adding that IT staff is increasingly involved in vehicle development and “has become more of a business partner to the various divisions.”

Porsche executives said the sports car maker was the first to implement blockchain in the car. Through the use of the digital-ledger technology, Porsche’s door opener is better protected against hacker attacks, they said.

Porsche is also deploying blockchain for communication with third parties. One of them is logistics company DHL. So-called smart contracts can make sure that third parties have to honor an agreement. “With blockchain we can assure in particular that the customer continues to have control of his data,” Meschke said.

The sports car maker believes artificial intelligence can give predictive maintenance a boost. The Porsche Digital Lab, its Berlin-based innovation think tank, developed what it called a “sound detective,” which recognizes abnormal noise and vibration in machines. With the help of AI, for example, it can determine the state of a plug connection and predict whether a problem may occur later on.

Screen-Shot-2018-03-13-at-1.17.36-PM-300x198. With the help of AI, a new tool can predict maintenance problems (Photo: Porsche)

AR and VR

Augmented and virtual reality will feature in Porsche’s sales and after-sales operations. In cooperation with Google, Porsche is introducing “Mission E Augmented Reality,” an app-based AR implementation that lets customers look at various details of Porsche’s upcoming electric sports model.

“The customer has to be addressed in an emotional way in all phases of the purchase decision,” said Deniz Keskin, head of Porsche’s communication strategy and retail marketing. Virtual and augmented reality are perfect for this purpose, he added.

Keskin cited three ways in which digitalization can improve automotive product marketing. First is the establishment of a more direct connection between the customer and the company. Second, Porsche can offer customers information that is filtered for individual relevance. And third, it can provide a more interesting customer experience. “Through digitalization we have realized that we can offer an experience that wouldn’t be possible in the real world,” Keskin said.

The Porsche expert said he considered AR and VR “the fourth wave” in the consumer electronics evolution. It follows, the advent of the PC, the internet and the smartphone.