Klaus Entenmann: "The customer no longer needs to come to the dealership to get car-buying advice." (Photo: Daimler)

Digitization is changing the automotive industry top to bottom. In a short interview with automotiveIT, Klaus Entenmann, CEO of Daimler Financial Services, discusses which technological developments are crucial for the financial services units of car manufacturers and what the consequences are for the way they approach customers.

automotiveIT: Mr. Entenmann, digital transformation is taking place across the entire industrial landscape, but it is having a particularly strong impact on the automotive and finance sectors. What's happening in this regard at Daimler Financial Services?Klaus Entenmann: We're at the beginning of a new development and a lot is yet to come. But the changes will be permanent, there's no doubt about that. We notice that classic consultancy processes in car retailing are increasingly under pressure as a result of digitization. That means we have to rethink things. In future, we have to even more strongly take into account the customer perspective. That's why we're undertaking projects such as our AutoGravity app (financing per smartphone). In this respect we are attacking ourselves and are moving in new directions. We're also pursuing targeted seed funding to identify new trends. We have to - at least in part - reshape the customer experience and the consultancy processes associated with it. Our idea: The  customer should no longer have to come to the dealership to get advice. If he wants, he can get the necessary information and manage the entire process within five minutes directly on his smartphone, including financing offers from various banks and the associated credit check. We are deploying the new digitization technologies to achieve a 24-by-7 customer experience - and of course to boost efficiency.

What are the technologies you are focusing on?We are investing in artificial intelligence and, as a first step, are very successfully integrating cognitive self-learning language systems based on IBM Watson into our customer service processes. The results show that we're heading in the right direction. In a challenging next step, we will connect emotions to language. Just think about the potential of emotional digital intelligence that can understand customer requirements and can satisfy them with high quality.

Captive automotive banks traditionally provide financing, leasing and, sometimes, insurance services. But the trend is moving away from privately owned cars. Do you expect demand for financing products to decline and how are you reacting to this? I wouldn't call it a trend. In China, financing represented 10 pc just a few years ago; today, it's more like 30 pc. In Los Angeles and other big cities the percentage of young people who no longer see a car as the most important investment, is in many instances going down. So we have different degrees of saturation, depending on the market and the region. I'm rather expecting stable or growing markets. But we are, of course, also working on new products and have already set trends with these. Just think of car2go, MyTaxi or our Moovel mobility platform. With these services, we reach totally different customer groups that might not want to buy a car. Digitization offers completely new possibilities and we will make use of these.

Interview by Hilmar Dunker