Carmakers must embrace Big Tech to survive the coming revolution

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The likes of Google and Apple threaten to sever the direct link between carmakers and customers (Source: Getty)

Merger plans for Europe’s car manufacturers have dominated headlines in recent weeks, not least because of the threat they pose to UK and wider European car jobs.

Combine this with Brexit jitters and concerns about overcapacity, and you might view our industry with a “glass half empty” attitude. And this is even before you contemplate the wider existential threats facing automakers.

Autonomous driving and car sharing threaten to replace vehicle ownership and turn cars into shared services. Technology interlopers such as Google and Apple threaten to relegate carmakers to commoditised manufacturers, their direct link to customers severed. As a car executive with over 25 years’ experience in the auto industry, perhaps I should share this pessimism. I do not. In fact I see the glass as more than half full.

I write this from Barcelona, where TMT chief executives and tech groupies from around the globe have gathered for the annual Mobile World Congress – a celebration of all things “techie”.

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You may ask – what is a car guy doing here? The answer is simple: amid so many existential questions, our industry must decide whether to compete or collaborate with so-called big tech. I believe we must do both. The stakes are enormous – an industry that gives work to millions of workers, and that some estimate to be worth more than $2 trillion a year.

I am not alone in believing in collaboration. There are numerous examples of carmakers working closely with technology companies to gain invaluable insights. Whether it’s Uber for insight into autonomous driving or Nokia for its navigation software, I could go on, and I will, if only to mention SEAT’s own strategic collaborations.

Through exploring opportunities with partners such as Apple, Google, and Samsung, we have already developed innovative technologies such as digital keys and parking apps. Internet connectivity – and the proliferation of connected devices – make these technologies possible, opening up a whole new world of interaction between the car and the driver, between the city and the car. Importantly, it could also help carmakers to become more relevant, as cars become an extension of our homes and offices.

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Imagine the commute of the future. As you approach your car, it picks up your unique ID from your smartphone and automatically unlocks itself, adjusts the mirror heights to reflect your personal settings, loads your favourite music tracks and journey route.

You set off for a meeting in central London – or Barcelona even. Your car warns you of heavy traffic ahead, and redirects you onto a better route. It also tells your colleagues that you’re running late for your meeting. You’re low on petrol so it tells you where you can fill up – and offers you a discount on the fuel plus other special offers. Your car directs you to the nearest parking space at the end of your journey, having already booked and paid for it – again securing you a discount as a loyal customer.

The potential of this so-called internet-of-things ecosystem is enormous: predictive traffic information, traffic management, parking finder, valet services, restaurant bookings, shopping vouchers, an endless list of commercial opportunities.

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Inevitably, companies will compete to secure as big a slice of this commercial pie as possible, but carmakers need to ensure we win our fair share.

Importantly, the auto industry must help provide solutions to the problems that we have helped to create, including traffic congestion, one of the banes of urban living. At SEAT, for example, we estimate that 30 per cent of urban traffic is caused by cars looking for parking. Our industry can help provide solutions by ensuring our cars are integrated into a city’s wider digital ecosystem.

Chip-enabled rubbish bins can already tell local councils when they need emptying. Connected street lights help them to cut costs and emissions. Now, car sensors can feed back “big data” to cities, helping them to monitor air quality, manage traffic, and optimise parking availability.

Over the next 10 years we will see more changes in the way we work, live and travel than we have seen over the last 100. The car industry, here in the UK and across Europe, needs to ensure it’s in the driving seat of this revolution, if it is to flourish, and it can only do this by ensuring it remains relevant to people’s lives.