FRANKFURT ”“ One thing was clear at last week’s first carIT Congress: Despite an abundance of new technologies coming to market, the auto industry is still hard at work to define business models for electric vehicles and the connected car.
Speakers at the one-day event, whose theme was "Mobility 3.0," presented an impressive array of new technologies.
These included Ford's Sync, the voice controlled communications and in-car infotainment system that the US carmaker plans to roll out in Europe next year. Ford Germany CEO Bernard Mattes said "smart technology solutions" such as Sync will continue to be one of the differentiators available to the world's carmakers.
BMW, which is putting strong marketing emphasis on its connected-car strategy, said new concepts unveiled at the Frankfurt auto show this month underscore how the premium car maker is moving ahead with its vision of future mobility.
Said Elmar Frickenstein, who heads the German premium car maker’s electrical and electronics research: " “The vehicle willbecome a mobile node in a network” that gets updates through a “clever cloud infrastructure.”
Competitor Daimler is also planning a much broader range of infotainment options than it has had so far. "In 2012 we're bringing a whole bouquet of new apps to market," said Bharat Balasubramanian, head of product innovation and electronics research.
Balasubramanian touted Daimler's "full connectivity solution," which uses a back-end server to control all information going into and out of the car.
The new technologies promise to better connect cars to other cars, to the home, to the surrrounding infrastructure and to the internet.But the process is likely to be slower than many had hoped for only a few years ago.
The absence of reliable highspeed data networks is a major impediment to the growth of the connected car.
"To establish car-to-car communication, we need proper data transmissions," said Michael Bolle, executive vice president, Robert Bosch Car Multimedia. He added that, in his view, the new higher speed LTE mobile phone network now being rolled out in Europe is a precondition for car-to-car communication.
Other industry executives agreed.
"What do we still need? We need a global high-speed network so we can all use our own devices," said Daimler's Balasubramanian.
"The infrastructure is one of the biggest obstacles," added Thomas Form, head of electronics research at Volkswagen. He noted that the planned introduction of the European emergency calling system e-Call by 2015 is wrought with problems and is, in many ways, an example of the issues faced in speeding up connected-car programs.
"How long will the technology be available, will you use GSM, LTE, UMTS or something else?" he asked. "You need a measure of technology security for 15 years."
Automakers have their connected-car strategies firmly in place, but many speakers at the carIT conference expressed worries that a cost-benefit analysis would raise some serious questions.
Willi Diez, director of the Institute for Automotive Research in Geislingen near Stuttgart, said the auto industry may not be leading the transformation now getting underway. "There are other players that might be better positioned," he said. "In the end you need a business model that is profitable."
Those business concerns were echoed by VW's Form. "The telematics wind has been blowing through the car industry since 1995, but the economic success has failed to materialize," he said. "What's different now from five or 10 years ago?"
What has changed, undoubtedly, is that the car is on the decline in the developed markets of North America, Europe and Japan.
"In Europe, cars are not a growth industry, but there is a battle for market share at the expense of competitors," said Jochen Gehrke, automotive analyst at Deutsche Bank.
Add to that increasing congestion, a growing trend toward urbanization and a declining interest among younger people to buy cars and you have a summary of why automakers need to act. They have no choice.
Urbanization is a major force pushing automotive IT innovation, said Diez. "Driving in cities was never all that much fun and it will be even less fun in the future," Diez told the car-IT conference.
Ford's Mattes noted that the average person in Europe spends almost two years of his life in acar. "That's why you have to make time spent in the car as pleasant as possible," he said.
Diez said "urban mobility optimizers" will constitute a whole new car user type in coming years and it will be a group that's interested in both new infotainment and electric vehicles.
The growing importance of social networking is also driving the automotive infotainment revolution. Matthias Wissmann, president of the German carmaker association (VDA) said the internet doesn't draw potential car buyers away. Rather, he said, it complements the car in a positive manner.
-By Arjen Bongard