A round up of all the top stories from Munich by Siegfried Mortkowitz.

If you've missed it, you catch up with Day One.

The second day of TU-Automotive Europe 2016 began as the first day had concluded: with future mobility services. “Cities will need free-float car-sharing to solve their problems,” Thomas Beermann, CEO of Car2Go Europe, told the participants of the Munich conference. “And it will become more and more electric, zero emission.”

Beermann went on to say that car-sharing will give rise to other businesses and that the driverless car will be a boon to the business and to urban environments. “Autonomous driving will very much reduce the number of car-sharing vehicles used to provide the same service,” he said. “In Berlin, we could now fulfil the same demand with half the vehicles.”

He also cited the demographic shift that was much the talk of Day One of the conference, the increasing movement of people into urban centres. “This is an enabler [of car-sharing],” he said, “because cities need to look for solutions” of the problems caused by high-density urban populations, such as congestion and pollution.

Another enabler of car-sharing and other growing mobility services is the change in attitudes regarding car ownership. “People still like cars, people still like to drive cars,” Beermann said, “but not all people still want to have the asset with all the obligations linked to it.”

All these factors, he said, account not only for his company’s current success and annual growth of 45% but especially for his forecast that “car-sharing will grow massively… the growth will come not only from adding city by city by city but the change will also come from the changing mobility patterns within a city.”

Beermann cited forecasts from several well-known consultancies that predict that car-sharing user and vehicle growth will result in a seven-fold increase in revenues in the sector by 2021. “We are at the beginning,” he said. “The growth is still to come.” This, he went on to say, is good news for urban environments because “flexible free-float car-sharing is a solution [to urban problems] because it reduces the number of private cars, it reduces the kilometres driven, it has a big impact on the parking pressure and CO2 emissions. Therefore, it is essential that free-float car-sharing, as part of the general mobility mix, consisting of public transport, bikes, walking, the private car, taxi, is part of the solution to the problem of congestion, pollution and space.”

Another solution would be a service that facilitates parking. Andreas Hecht, executive vice-president and general manager, automotive, at INRIX, cited a study, which was also quoted on Day 1, that found that 30% of urban traffic consist of drivers looking for a parking spot. He also described an INRIX study, involving 5,000 respondents in five countries, which revealed that real-time parking availability was one the most consumer-desired connected in-vehicle services.

Hecht announced INRIX has just launched its real-time parking services for the first time in a carmaker’s vehicle. “It’s in the BMW 5 series,” he said. “This is a probability model that a driver is going to find a parking spot on a particular block.” INRIX says it is the world’s first commercial deployment of On-Street Parking by a carmaker.

But whatever future mobility will look like, a fundamental aspect of the automobile will not change and that is the importance of the customer experience. It’s a definite plus if the mobility solution helps to make urban life safer, healthier and less stressful but if it isn’t easy or pleasurable to use no one will buy it.

This is why a number of conference presentations also focused on the present, such as the panel discussion on Winning the Hearts and Minds of the Connected Consumer. As one of the panel members, George Parthimos, CEO of Connexion, pointed out: “The HMI of a lot of the delivery and usage of [infotainment] features is still a little bit cumbersome. Then you transition that to the sharing economy. How does that work when you need three hours to learn how to use a vehicle, if it’s your own vehicle, [and] how would someone like yourself jump into a shared vehicle and use those services?”

His solution to this lack of seamlessness is the use of artificial intelligence, voice recognition and pre-emptive decision-making for the driver, “to try and make it easier for the customer delivery and use of the vehicle. That would assist in the HMI”.

Tamás Zsolt Szabó, director of product management at NNG LLC, agreed that there is a problem. “About 60% of users check on a car’s connected feature before making a final [car-purchase] decision,” he said. “But only a fraction of those actually choose to buy them. However, studies show that about 30 to 35% are willing to pay, so there is a market.”

This suggests that embedded infotainment might have lost its allure for consumers, or that they are waiting for new innovations. Szabó believes that not enough has been done to educate users on these features.

“Where we need to improve is with the 30 to 40% who have the features but never use them,” he said. “We as vendors need to put more focus on the user-centric design of these features, make it easy for the user to deal with the overall customer experience related to connected features. And the [car] OEM’s dealers need to invest in training and competence transfer so that users are aware of and know how to use these features.”

Hecht agrees that carmakers have failed to make in-vehicle services work and that there is a demand for them. He cited another part of his company’s survey of 5,000 respondents that asked them to identify the relevance of brands, car performance and technology and to rank them according to importance when they make a decision of which car to buy.

“It was eye-opening that technology plays a much stronger role than brands or car performance when the time to make a purchase decision comes,” he said of the result. “It’s quite astonishing how consumer behaviour has changed.”

Reimund Schmald, business development manager, mobile content, EMEA, at
Nuance Communications, suggested that infotainment products will become more attractive as cars become increasingly autonomous.

“Infotainment features will make a greater difference in the future than today as we shift to autonomous driving, or to a shared economy,” he said. “Also, the user experience of infotainment and the consumption of media you’ll be doing it in a car that will change [your] behaviour. And the task we all have is to educate the user about the advantages of those services and to make them accessible to them. Today, there are a lot of services in the car that are difficult to access.”

There is another problem that carmakers have in trying to monetise their proprietary infotainment features and that is that almost all their customers have been digitally educated by the user experience of their Apple or Android mobile phones. However, Szabó believes that this is not an insurmountable barrier. “We need to exceed the experience. What Apple and Google are offering is only connected, and the non-connected part is only a cheap backup. We need to integrate the online and the offline experience in the car. That’s going to be the big challenge for us as vendors. And that’s how we can fight against Google and Apple.”

Schmald pointed out that: “There will always be a difference between the experience that is built in [and] deeply integrated and the experience that is brought in, coming from outside, which is Google or Apple. And there will also be a break in the experience. That is the case today and this is something we have to overcome in the design of the [user] experience of the future – if we allow [customers] to bring that experience into the car.”

Hecht cited yet another consumer survey, this one carried out by Accenture, which showed that 37% of consumers would switch to a different carmaker if that carmaker were the only one offering a car with full access to apps and their favourite content in the vehicle and 32% said they would be willing to pay a subscription for connected services.

“It means that there is a huge untapped potential out there for creating custom-branded, OEM-branded app experiences that consumers will pay for,” he said. “Unfortunately, at this point it’s safe to say that the industry is failing at that. The reason for the failure is fragmentation. Every OEM has a specific protocol, a specific way of getting that app or getting that information into their vehicle. Car Play and Android Auto are leveraging that fragmentation to their advantage, bringing simplified versions of their Google and Apple interfaces to the automakers’ dashboards. In the near term, these offerings are filling a void for smartphone-based infotainment programming but they don’t really meet the OEM’s criteria for differentiation. It’s really not in the best interest of the carmaker.”

A morning super-panel on Automotive Digitisation addressed this very issue. According to Dieter May, senior vice-president, digital business models, at BMW, Google and Apple have set an important benchmark for the user experience of digital services. “We need to compare ourselves to the CE world,” he said. “The bar is getting much higher in terms of customer experiences, digital experiences, in the car and also connected to the car. So, the race is on and there is a new phase coming where digital needs to become mainstream and on par with what we are used to from our consumer experiences.”

Benoit Joly, Renault’s chief sales and marketing officer, agreed with that view and said, like BMW, his company had created a dedicated unit to work on this issue. “We decided to hire software people and decided to build our own open platform for connected services, because this is the only way you can build the agility that is required to compete in the CE space. So we are now in a position to decouple the software from the hardware of the car and then bring it faster to market.”

May said that BMW believes that: “We need to change from a vehicle-centric model to a customer-centric model, and that’s why we power our vehicles now with a consumer profile, in order to provide in a very personalized and contextual way services to the consumer that really matter to them.”

It is a matter of making the vehicle a part of the customer’s established digital lifestyle, he explained. “The customer leads his digital life already and just because we are building cars we won’t change the customer’s digital life. So we need to seamlessly integrate into that and our approach is to make services available on whatever digital touchpoint is out there. That ranges from the phone to the smartwatches but also to new devices, like Amazon Echo or the integration with Microsoft Cortana. That hopefully will drive traffic and engagement.”

For Joly, his company’s open platform is the solution and it very much resembles in its aims BMW’s approach. “You can’t get away from Google and Apple,” he said, “which means you have to integrate Car Play and Android Auto, and you have to create better experiences in this environment. That’s why we believe in this open platform. It’s about integrating into other platforms and keeping this openness up to speed. So that, ultimately, you leave the choice to the customer. At the end of the day, if the customer has a choice, he will make the decision about which ecosystem he will want to use. The Microsoft, the Apple, the Google – we need to open the choice for him and let him select his preferred daily environment and the car needs to seamlessly integrate into this environment.“

As BMW’s May succinctly concluded: “You can never act against the consumer.”

Consumer Telematics Show 2017

04 Jan 2017, Las Vegas, USA

The Consumer Telematics Show (CTS) kicks off the calendar year for the connected car community, serving two strategic purposes; it gives automakers a platform for new partnership and product announcements and acts as the largest and most focused meeting point for 500+ automotive execs before International CES®.