www.automotiveIT.com

Automotive 4.0 The Digital Revolution

Views from the Top

3automotiveIT international, Arjen Bongard 4

Evercore ISI, Arndt Ellinghorst 6

Volkswagen UK, Ian Plummer 10

H.R. Owen, Chris Harris 14

salesforce.com, Patrick Plata 18

Jaguar Land Rover, Mike Bell 24

Verizon Telematics, Kevin Link 28

Volvo Cars, Thomas Mueller 30

MHP, Oliver Kelkar 34

Qoros, Maurits Aalberse 40

GENIVI, Philippe Gicquel 44

Google, Hugh Dickerson 50

McKinsey & Company, Juergen Laartz, Dominik Wee, Matthias Kaesser 56

Nissan Group of Europe, Stephen Kneebone 62

CVTA, Scott J. McCormick 66

Lotus F1 Team, Michael Taylor 70

Dassault Systmes, Olivier Sappin 74

Continental Automotive, Otmar Schreiner 80

CE 21, Thomas R. Koehler 84

Imprint/ Contact 87

Table of contents

4It wasnt so long ago that the auto industry was all about engines and top speeds and, maybe, a little bit of safety and comfort thrown in for good measure. But that was yesterday. These days were talking about electrification, car-sharing, connectivity and autonomous driving. Those are the defining characteristics of to-days - and tomorrows - personal mobility. Technically, there are no limits to what the industry can do. But what about the practi-cal implementations? And, more importantly, how is a tradition-

ally conservative industry such as the car business going to adapt - and possibly even lead - the transformation we have embarked on? Thats the question we try to answer in this book, which is titled Automotive 4.0 The Digital Revolution.

A lot of things come together as we discuss the far-reaching changes in the personal- mobility space:

Urbanization is redefining the purpose of the car Growing air pollution drives electrification of the powertrain Connected consumers want their personal networks to include the automobile New IT and communication technologies help adapt business models And 3D, simulation and the internet of things are moving manufacturing systems

to a new level of sophistication.

All these changes provide business opportunities for the auto industry, for the auto industry and for suppliers, IT service providers and telecommunications companies. And they open up the personal mobility market to a host of new players that previously focused their attention elsewhere. In theory then, theres nothing but upside to the transformation. But risks and uncertainties abound. Scenario planners at market re-searchers IHS Automotive have made a map of all the global crises - or potential crises - the world faces. They include: hostilities in Ukraine, a further spreading of the Ebola virus, the continuing conflict in the Middle East, higher interest rates in the booming US market, economic downturns in Latin America, etc. The list is long.

Revolution or Evolution?

5In this book, we focus on the actions that are being taken to change the nature of the au-tomotive product offering to bring it in line with the demands of todays consumers. But we also demonstrate how car companies and their partners are making the auto indus-try more resilient, more flexible and better prepared for whatever challenges it will face.

In interviews and contributions, automaker, supplier and IT executives provide concrete examples of innovation at work, actions already taken, development in progress and opportunities being realized. Whether its about connectivity at the speed of light in Formula 1 racing, the power of connected retail to convince reluctant car buyers, the promise of big data or the quantum leaps in infotainment technology, the stories and interviews are an uplifting read.

Which leaves the one big question we posed in many of the interviews in this book: What will the car of the future look like? The answers vary, but, as the transformation of the industry picks up speed, there is no doubt that the automobile will play a key role in tomorrows personal mobility. And thats reassuring.

Arjen BongardEditor-in-chiefautomotiveIT international

6 Evercore ISI Arndt Ellinghorst

Given the structural weakness of the European market, the automotive industry is losing money on most of the cars it is selling in the region, says Arndt Ellinghorst , senior managing director and head of the Global Automo-tive Research Team at investment advisors Evercore ISI. As a result, automakers will have to look elsewhere in the retail channel, for example to find the savings needed to run a profitable European operation. Ellinghorst spoke to automotiveIT on the sidelines of the automotiveIT International Congress in London this summer.

" In Europe, most carmakers are losing money"

7Arndt Ellinghorst Evercore ISI

Mr Ellinghorst, please explain brief-ly what Evercore ISI does in the auto industry.We look at the automotive industry and our clients are institutional investors who ask us where they should invest. We an-swer questions such as: should I buy a carmaker, should I buy a supplier, what should I do now that there is an IPO com-ing? My job is to serve as a line of com-munication between the industry and the finance community.

So, lets cut to the chase and ask you: Is todays auto industry a good and safe investment bet?That depends. Europe is recovering slow-ly but steadily. The US is probably at the peak of the current cycle. China just keeps growing. The supplier industry has been very, very successful. So I think the indus-try is in better shape today than it used to be, but in Europe most of the companies are still losing money. Its a very challeng-ing environment and that will probably stay so for a while.

If youre not involved with the car in-dustry on a daily basis, you would tend to think that automakers are rich and make huge profits. But youre telling us this isnt necessarily the case?Look at the financials. People are always shocked when I tell them 60-to-70 per-cent of all cars sold in Europe are sold at a loss. Every year these carmakers are los-ing money in Europe. In a good year, they

probably generate a profit of 300 euros a car. That means the freedom to spend money in this industry is very, very limited.

The European market doesnt present a pretty picture then?Thats true. The Italian auto industry is losing money in Europe. The French auto industry is mostly operating at a loss in Europe. General Motors Europe and Ford Europe are losing money in Europe and so are the majority of the Asian brands. Even the Volkswagen brand is barely making any money in Europe. So if you add it all up, the industry is losing money.

The European market is not in good shape. Do you see excessive European Union regulation as the main cause of the problems?The European Commission hasnt been helpful the last 10 years in making the in-dustry more profitable. Politicians have made sure that chronically ill companies were bailed out, even though industry con-solidation was and is badly needed. At the same time Brussels came up with probably the strictest fuel efficiency regulations on the planet. The industry has to comply with a fleet average of 95 grams of CO2 per ki-lometer by 2020. Thats roughly a 20-to-30 percent incremental improvement in fuel efficiency from here until 2020. Thats going to cost 1,000 euros per car. If you are making a profit of 300 euros per car and someone tells you to spend 1,000 euros extra just for the powertrain and the engine, thats tough.

8 Evercore ISI Arndt Ellinghorst

You said that, in Europe, the industry doesnt have a lot of money left over to invest. How then will carmakers devel-op all those fuel-efficient technologies and how will they pay for all the new infotainment and safety features con-sumers expect ?If you look at the spending priorities, the industry first has to comply with regula-tions. Theres no discussion there. You can-not sell cars that dont comply, so thats where the money has to be spent first and foremost. Fuel efficiency, of course, pro-vides a real benefit to consumers. If they can spend less on fuel, that can save a lot of money. Second, when were talking about the IT side of the connected car, you have to realize that everything in this area has to be paid for by the consumer. You have to make sure, therefore, that the innova-tions are of real use to the consumer. If car buyers dont want to pay, the carmaker will have to find the money elsewhere, for instance in the distribution channel.

Please talk us through some of the big trends youre seeing in the car industry.The first big trend is demographics. People are getting older and older people tend to drive less. At the same time, younger peo-ple are less interested in cars. If they are, their focus is on new ways of mobility such as electric cars or car sharing. Peoples mo-bility requirements are changing and this has a direct impact on the business mod-el of the carmaker. The other big trend, of course, is that people want to be connect-

ed with iPhones or iPads or other devices. Most young people feel that the actual car is something from a different era.

And why do they feel that way?The consumer electronics industry is changing every two or three years and the lifecycle of a car is seven years. So you buy a new car that has been developed five or seven years ago. In many cars, its difficult to plug in your cell phone and listen to music.

What can be done to turn this trend around and whats the role of IT in such an environment?I believe the lifecycle of the products will shorten. If you want to sell cars that meet the demands of a younger population, the cars need to be updated faster. Tesla is a good example. It can update the soft-ware of a car overnight. And not just the driving features but also the infotainment systems.

Tesla seems to be doing well, in part because it takes more of an IT-driven approach to the vehicle.The Tesla brand, with its Model S electric sports sedan is a huge success in the US. The overnight software update means you have new software in place when you get into the car the next morning. That could mean a new version of Google Maps or something else and that is something ex-citing for especially younger customers. Teslas founder and CEO, Elon Musk, has

9Arndt Ellinghorst Evercore ISI

managed to come up with a competi-tive and exciting car. The big question is whether traditional carmakers have the mindset and the flexibility to adopt a simi-lar approach quickly.

A final question: What kind of car do you think youll be driving 10 or 20 years from now?I really believe in electric mobility. I think the combustion engine will increas-ingly be replaced, also because of the driving-pleasure potential of electric mo-tors. Mobility will be more electric in 10 or 20 years, but I hopefully will no longer own a car then. Instead, I will pay for mo-bility. Imagine Im a BMW premium cus-tomer. During the week I will probably have an electric vehicle to drive around

in the city. On weekends, Ill need a big-ger car to go into the country. Evenings I might prefer to have a driver to take me to a concert in downtown London. Owning a car is increasingly outdated, but paying for mobility is something that consumers will still be willing to do.

Interview by Martyn Warwick,

TelecomTV, for automotiveIT

www.telecomtv.com

Photos by Silvia Steinbach

Arndt Ellinghorst, head of the Global Automotive Research Team at Evercore ISI, is one of Europes foremost global automotive analysts. Before joining Evercore ISI, Ellinghorst headed Euro-pean automotive research at Credit Suisse. In earlier roles, he worked at Dresdner Kleinwort Wasserstein and WestLB Panmure. Early in his career he also worked for Volkswagen and Audi.

Brussels hasnt been helpful in making the industry more profitable

10 VW Ian Plummer

Ian Plummer is making major changes to the way cars are sold, as consumers adopt a new approach to buying cars. The head of Volkswagen sales in the UK, believes dealers will use a lot more digital technology to better explain a host of new features that are redefining cars. And, in an interview with auto-motiveIT, he says he is looking forward to the day when the car will be able to drive itself.

"I think theres a real need for change"

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11Ian Plummer VW

The world of automotive retail is un-dergoing big changes. As head of car sales in a major European market, what do you see as the big trends in the au-tomotive industry today?The key trend were seeing on the sales side is that customers are behaving very differently compared with a few years ago. Its not a complete revolution from one day to the next, but over the last few years we have seen a huge shift in customer be-havior. Instead of a visit to a physical deal-ership to touch and see a car, prospective buyers are doing all their research virtually. They use social media and manufacturer and dealer web sites and tend to visit ac-tual dealerships much less frequently. Our web traffic has doubled while our show-room visits have halved. But we sell more cars and are adapting to the changing customer approach.

There are other major trends in the industry such as big data, the connect-ed car, autonomous driving, the in-ternet of things, machine-to-machine communications. How do these impact your operation?They add complexity and, thus, pose big challenges when it comes to explaining the customer benefits and getting the customer to use the new features. The first challenge is to get the right tools in place online. But the key to success is to enable the customer to seamlessly continue his journey from a digital start into the dealership. We dont believe the

dealership is disappearing by any stretch and the second key differentiator has to be the quality of the physical customer experience with dealerships delivering real theater to their customers. The third element that really blends everything to-gether is the people who have to deliver all this with passion and warmth. Were putting a lot of focus on helping our team to actually get the points across and cre-ate the seamless journey. For example, we want customers to be able to config-ure the car online and then find the same configuration on the iPads we have in our showrooms. Weve developed a warm-er, more human journey from the digital start through the ownership cycle and the after-sales experience.

And your sales staff presumably needs more and different training. They have to be comfortable with the communi-cation technology in the cars to be able to show customers how to use it.They do indeed. The iPad technology we put in place at our dealerships gives sales executives much simpler access to the data they need to explain things. As cus-tomers already have rich knowledge of the cars, the sales teams need to have at least the same level of useful knowledge. And they need to be able to use media such as video technology to demonstrate certain things that are easier shown that way. Obviously touching and feeling a car in a test drive is still important, too. We found it critically important to show our

12 VW Ian Plummer

teams how to use the new tools. We have digital champions on every site and they function as change leaders, embedding changes in the teams and showing how things actually work.

It sounds like IT has taken on greater prominence in the sales process.Absolutely. Any key project today has a very strong component of systems and IT integration. Our challenge is always to link

our new ideas to legacy systems, which is never particularly easy. But it is abso-lutely critical that we do that. So our key challenge right now is to make sure that all the new ideas we are coming up with - and the digital tools that I have described to enable them are of use to the sales teams and to the customers. The benefits have to be absolutely clear. And then the challenge is to make the tools as simple to use as possible so that they can actually

We dont believe the dealership is disappearing by any stretch

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13Ian Plummer VW

deliver on the promised benefits. The role of IT is therefore absolutely critical in ev-erything we do.

You have new versions of two popular VW models, the Polo and the Passat, on the market. How are they different from the previous generation and how are you selling them today?Those are two good examples. The face-lifted Polo is just coming out in the UK and the new Passat will reach the mar-ket early next year. But you could also look at the Golf, which we launched last year. Theyre all built using modular architec-tures that allow them to share technolo-gy. New infotainment, safety and driving assistance features, which all benefit the customers, require a lot of good explana-tions from sales executives. Ill give you an example how our sales staff can connect the digital with the physical world. Sales executives can prepare an SD card with data relevant to a test-drive route. And they can add music and maybe even a video that can be shown in the car. That makes various functions and features easier to explain and provides a better test drive. Also, when youre preparing to show a potential customer the emergency brak-ing function, its quite useful to show a video first so he knows what to expect. Its this combination of digital and real thats quite critical.

Finally, a vision question: What kind of cars will we be driving in 10, 20 or 30

years? And what will your sales opera-tion look like then?I cover a lot of miles each year and I fancy the idea that in 10, 20 or 30 years the car will drive itself and I can sit back, work, read or sleep on the road. To sell that kind of car I think we need to do an awful lot more of the stuff we are doing right now. A Goo-gle executive told me recently that, if we think the revolution we are seeing right now is not going to affect our industry we are frankly delusional. I think that there is a real need for change and I think we will see an acceleration of the digitalization of the sales process. Well need to see a lot more theater in the way we actually sell cars, with the kind of things you can see, for example, in the Audi City digital showrooms.

Interview by Martyn Warwick,

TelecomTV, for automotiveIT

www.telecomtv.com

Ian Plummer became head of Volks- wagens UK sales operations at the start of 2012. He joined VW from Renault, where he was commercial director for the UK. Earlier, he ran the Renault-Nis-san Retail Group in the country. During his career, Plummer has held several international marketing and aftersales roles at Renault. He graduated from Loughborough University in 1991 and in 2002, he received a MBA degree from the Theseus International Manage- ment Institute. He lives in London.

14 H.R. Owen Chris Harris

Chris Harris, who is the marketing and customer director of H.R. Owen, says managing customer relationships in a smarter way is the key to success for the luxury-car dealer group. H.R. Owen sells brands that in-clude Aston Martin, Lamborghini, Ferrari and Rolls-Royce. Customers interested in buying these cars like to be recognized and treated profes-sionally when they enter a dealership, Harris says. The dealer executive spoke to automotiveIT on the sidelines of the automotiveIT International Congress in London.

" Email is by far the best means of communication with our customers"

15Chris Harris H.R. Owen

H.R. Owen specializes in luxury vehi-cles, but, as consumer attitudes to per-sonal mobility change, is there still a future for this high-premium segment?We obviously hope so from our business point of view. But one of the advantages we have as a dealer group is that, from a brand marketing point of view, our cus-tomers really like cars. They are not choos-ing any kind of vehicle to simply get from A to B in the most efficient way. In fact, I would happily admit that most of our cars are probably not the most practical way of driving from A to B. But thats not the point. Its actually about the enjoyment of the journey, its about the enjoyment of the driving experience and I think there will probably always be petrol heads and people who want to drive cars that are more engaging. And obviously, its clear that you need a certain amount of wealth to be able to afford the cars we sell. So lets say wealthy petrol heads are our target audience.

What are the biggest and most impor- tant trends you see in the car industry today?Ill answer the question from a retailers point of view. For us the most important thing is how we use current technology to gather and organize customer data in order to serve these customers better. Our job as a retailer is to sell the cars and selling cars is all about understanding customer needs and listening to customers. That could be in a conversation, but it could

also mean listening to them in terms of the way they interact with us via email or through our website or in other ways. And then we want to use that information to present them with interesting offers for cars at the right time. If somebody just received a year-end bonus it might be a great time to talk to him about one of our cars. If somebody was just made redun-dant it might be a lousy time to talk about this. Ultimately we need to work out ways of having those kinds of conversations at the right time.

You obviously need a lot of data for this to work. How do you get this data and how do you secure it?We spent three years working to achieve the so-called single customer view and weve invested a lot in this. We have eight dealerships across 14 different sites and any of our sales people can now access our system and find any customer they want. From that customer record, they can look at when they last did a transaction with us, what cars they own, when these cars were last in service, how much that service cost. So should a customer come in to any of our dealerships, possibly even for the first time, he will be recognized and we can right away start dealing with him professionally. Thats what customers in this market segment understandably expect. Its just as when they walk into a five-star hotel; they expect to be recog-nized and treated like they have been there before.

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And how did you accomplish this exactly?We have had to bring together lots of dis-parate bits of data from sales, after-sales and even email systems. Email contained lists of people who attended events, for example. We brought all that together onto one platform and we are probably the first dealer group in the world to use Salesforce.com for that purpose. There are several advantages to Salesforce software. Its a cloud-based system, so we dont have to maintain large amounts of infra-structure. Its very flexible, so weve been able to turn it into an automotive system even when it wasnt designed as a car system in the first place. From a security point of view, its a system that has a se-curity model that is very strong. The data is stored in secure data centers, which is

probably safer than having it on a local server at a dealership.

It sounds like information technology plays a big role in making your sales operation more efficient. Can you give us some concrete examples of IT driven processes that help you in this?From the customer-service point of view, its all about bringing together as much information as you can in one place so you get that single customer view. But then you need the kind of tools to mine that data for intelligence that you can use to make attractive offers to customers at the right time. For example, if you consis-tently send someone emails about Ferrari and he has never once opened them, you can reasonably assume hes probably not interested in Ferrari. You can then make

H.R. Owen Chris Harris

H.R. Owen represents luxury brands such as Lamborghini in the UK

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sure that he no longer gets Ferrari-relat-ed email. You can even take Ferrari out of intelligent emails that, for example, have four brand options listed in them. The key is using IT intelligently.

In the new world of social media, email seems to be losing its relevance in private interactions, but you seem to say that in your business its still im-portant.Email may be a bit of an old-fashioned technology, but for us it is far and away the best means of communication with customers. Customers tell us they like it. More than 50 percent of our customers open our emails, which is a rate I have never seen in other industries I have worked in. And less than 0.2 percent un-subscribe from our emails. We believe that the data effort weve made helps us pro-duce well-targeted emails. The money we spent on writing, designing and delivering emails well is paying off for us. Our cus-tomers are voting with their mouse clicks in terms of opening and reading them.

Finally, we would like to ask you what kind of car will people interested in the top end of the market be driving in 10, 20 or 30 years?As I mentioned, our customers are first and foremost what I would call wealthy petrol heads. Theyre interested in the experi-ence of the drive, so I think they are going to be driving cars that are fun and exciting and involving to drive. Cars will have more

and more electronic systems that will make them easier to drive. But you have the option to turn these systems off and then it will get more exciting. The brands we represent are going in that direction. If you take a technology like electric cars, these are not only about city driving with lower emissions. Look at the new La Fer-rari, which is a high-performance hybrid. The technology is deployed to propel you from 0 to 60 mph faster than ever before. Obviously thats because electric motors have instant 100 percent torque. In our segment, electrification will help build extremely exciting cars that can also be more efficient and produce fewer exhaust emissions. I predict were going to drive exciting cars with all kinds of powertrains, including full electric and hybrid. They will still be great to drive.

Interview by Martyn Warwick,

TelecomTV, for automotiveIT

www.telecomtv.com

Photos provided by H.R. Owen

Chris Harris H.R. Owen

Chris Harris became marketing and customer director of H.R. Owen in October, 2011. He joined the British luxury dealership from Nokia, where he was global marketing strategy di-rector. Earlier, Harris worked at Vertu, Thomas Cook and P&G, with respon-sibilities that took him across Europe, the Middle East and Asia.

18 salesforce Patrick Plata

Patrick Plata is responsible for leading Salesforces strategy for the automotive industry. He joined Salesforce with 28 years of leadership experience in the global automotive industry at Nissan and Renault, where he served as chief operating officer.

Building the Platform to Provide a New Automotive ExperienceBy Patrick Plata,EVP and Chief Automotive Officer,Salesforce

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This spring, Martin Winterkorn, chairman of the management board of the Volkswagen Group, made a prophetic statement: Over the next few years, our industry will face one of the greatest upheavals since the invention of the auto-mobile. We are indeed in the midst of an epic transformation: energy, mobility, connected cars, automated driving, a surge of cloud computing and of software everywhere, workplace transformation, new ways to collaborate, new ways to partner, newcomers in the automotive ecosystem. The upheaval is happening in many areas and the digital revolution plays a role in all of them. But I will concen-trate here on just one: the need to adapt to new customer demands and redesign the customer automotive experience to address them.

New Customer Expectations

Auto customers behavior and expectations have fundamentally changed. They now choose from many channels to communicate about the car they want or the one they use: not just over the phone or through a visit to the dealer, but increasingly via mobile, web, SMS, email and soon through the car itself. The automotive brand, for them, is ex-pected to take care of them during any interaction, over any channel-dealer or direct. Customers want the brand to always know them wherever and whenever they connect with it. They want their experience to be consistent, and they want the brand actions to always be relevant to them. They want to feel like its a one-to-one experience; they want a fast response. They want the interaction and experience to be effortless, and, if they need help, they want the brand to always be there to support them.

Todays Highly Diverse Customer Journeys

There are many moments of interaction with the brand during a typical automotive cus-tomer journey often more than a hundred. It starts when a prospective buyer searches for information about a new vehicle and continues through test drive, purchase, finance, service, buying accessories, and new purchase. The journey includes multiple channels, both online and offline. Some interactions are handled by carmakers, some by dealers, and some by both. All are rapidly becoming digital, even more so with connected cars.

No two customer journeys are alike. Just as automotive engineers design every detail of the car and driving experience, carmakers need to carefully design the end-to-end expe-rience their customers have with their brand. Whats more, key moments of truth must be identified to surprise and delight customers.

Patrick Plata salesforce

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The most successful carmakers will take advantage of the new channels and opportunities to connect with their customers in a whole new way to deliver a consistent experience that matches their needs and the brand promise. By giving them more information and more ways to stay in touch, they can create a new type of relationship with the customer.

Engineering a New Type of Automotive Experience

To be successful, carmakers, dealers and other players in the ecosystem need to design processes, systems, and competences to deliver a one-to-one, consistent, relevant, fast, 24x7 customer experience. It starts with a unique 360-degree view of the customer, with real-time insight into channel contacts, social posts, time spent with specific models on a web page, app utilization, and new information captured by the sales or service people. It continues with rapid test and implementation of new applications made possible by todays cloud computing platforms.

A key challenge to executing the new automotive experience lies in the numerous but partially or totally disconnected databases and applications of today, managed by differ-

salesforce Patrick Plata

Web Motor Show

Email Apps

Social

Brand Portal

Connected Car

Dealer- ship

Contact Center

360 Customer Profile Customer Success Platform

Legacy Systems

360-degree customer profile

Carmakers need a customer success platform

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ent functions inside the carmaker or the dealers. The hope is that the same technology that drives the digital revolution for customers (mobile, cloud, social, apps, artifical intel-ligence and big data) will enable automotive companies and their dealers to deliver it. But they need to integrate these new technologies with the legacy ones and create the right tools to succeed.

Build A Customer Success Platform

Whats needed is a multi-channel platform that integrates technologies around the whole customer experience, not around legacy systems or silos. At Salesforce, we call this the Customer Success Platform. An automotive customer success platform comple-ments most legacy systems. It is a data and application layer with APIs that sits on top of them, and a middleware layer interfaces with appropriate APIs. For automotive applica-tions, it delivers the following six core capabilities:

1:1 and Social Marketing: Carmakers are able to listen to and engage customers and potential customers on social media. They can address issues and identify and nurture leads in a personalized manner. But just as important, they can also amplify positive messages, react quickly to address bad ones, publish content, and actively participate in social discussions about the company and its products and services.

Dealer Sales: Whether owned or influenced, automotive retail is literally where the rubber hits the road. With strong lead management, retailers can catch potential cus-tomers who might otherwise slip through the cracks. With a shared 360-degree view of the customer, carmakers and dealers can sell more intelligently. Mobile tools allow salespeople to interact and close sales in real-time, even away from the dealership.

Connected Services: Dealers, carmaker engagement centers, and social listening teams are able to answer and serve customers anytime, anywhere, through any de-vice including their connected car. These teams can access up-to-date customer information so they know who the customers are, their history with the brand and its dealer network, and even what their connected car has to say.

Owner Portal and Communities: Car owners need a single interface so they can see and take action on the important details of their relationship with the brand, the dealers, the service department, and finance department. In addition, a community functionality allows owners, dealers, service personnel, and employees to share infor-

Patrick Plata salesforce

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mation, opinions, reviews, and media in an open forum. The interface needs to be on the web, on mobile, or on the car display.

Analytics: Car manufacturers, their suppliers, and dealers can get new insight through the huge amount of data made available from customers, cars and legacy data.

Apps: Developers can create and deploy new app experiences at lightning speed to take advantage of new value-added services and maintain an active relationship with customers.

Connecting And Supporting Cars And Drivers

The connected car channel poses a difficult challenge for carmakers. The development cycle is separate from that of smartphones, and except for Tesla, carmakers have little ex-perience updating their cars over the air. Moreover, since customers are not accustomed to paying carmakers for services inside their vehicles, developing a new business model on a new generation of telematics is quite a blind bet for top management.

But connected cars are becoming a reality, and players like Apple and Google are joining the fray. Many new connected car service providers have started to invade this space. They are entering the automotive value chain and starting to monetize it. They sell car data acquired through OBD2 plugged-in devices. They are selling crash data and driver behavior data to insurance companies. They are selling vehicle maintenance programs and in-car advertising, and they deliver free navigation and good traffic information. What if they happen to know more about car users and car buyers than the dealers and the carmakers? Even though carmakers need to act faster, they struggle to develop busi-ness strategies to capitalize on this opportunity. They need to integrate the connected car with their customer experience platform. A Company Transformation

A major upheaval is under way. Carmakers and dealers are challenged and must act now. They need a platform with applications to redesign the customer experience and address the new needs of todays customers. They also need to learn how to leverage cloud computing on top of legacy systems so they can drastically cut development and implementation time. That way they can swiftly innovate, test and scale (or stop) to con-tinuously bring new choices to automotive customers.

salesforce Patrick Plata

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But technology is not the only issue. Car companies need to align their organizations to become fully customer-centric, dealing in a more holistic way with these new custom-er experiences. They need a much more cross-functional approach. For example, social listening and social engagement shouldnt only be done by marketers and telematics shouldnt only be done by engineering. Similarly, sales and service processes at dealers need to be addressed in a very new and more holistic way by the dealers and the different departments of carmakers.

Conclusion

Designing a best-in-class automotive customer journey and rolling it out across different geographies is possible today. But it requires transformational thinking, the technology tools to make it happen, and alignment of talent, organization, and processes to support it. It requires a customer success platform. With the right leadership, an automotive cus-tomer journey will create new opportunities for carmakers and dealers to generate new revenue and create loyal and engaged customers for life.

Photos provided by salesforce

Patrick Plata salesforce

24 Jaguar Land Rover Mike Bell

Mike Bell, global connected car director at Jaguar Land Rover (JLR), is responsible for managing the end-to-end connected car business service for the British automaker. In an interview with automotiveIT, he explains how JLR caters to clients who increasingly consider connectivity one of the key factors in the buying decision. Bell also talks about the companys data policy and shares his views on how cars will evolve over the next 25 years.

" Digital natives do not buy the vehicle if it lacks smartphone compatibility"

25Mike Bell Jaguar Land Rover

Mr. Bell, please explain briefly what Jaguar Land Rover is offering in the area of car connectivity?Our connectivity strategy covers four core technologies. Three of them we bring to market now: telematics, mobile de-vices and connected infotainment. The telematics component includes eCall, bCall and stolen vehicle tracking; mobile device support includes InControl Apps and a WiFi hotspot. With our new XE model we also offer a new mid-range in-fotainment system that includes all three components. A new highline system will be announced soon. The fourth technolo-gy is V2X communication. Were are work-ing on a number of collaborative research projects but do not have a launch timing.

How important is the connected car for Jaguar Land Rover?Connectivity is a critical capability for our vehicles. It is one of the top 10 reasons to buy a vehicle today. We need to ensure we are amongst the leaders in the premium segment. We do so with built-in connectiv-ity. I already mentioned the term telemat-ics before. This includes eCall functionality as well as stolen vehicle tracking, roadside assistance and remote vehicle control. We also do so with brought-in technology. We also support what we call beamed-in technology: to allow the control of stan-dard iOS and Android Apps in a driver-fo-cused manner. This system was co-devel-oped with Bosch. We offer WiFi hotspot capabilities together with a roof antenna

and the possibility to connect several devices via a single connection. In some markets we also offer special data plans, for example in North America and China, but not in Europe yet.

How important is connectivity for the average Jaguar and Land Rover driver? Thats easy: Digital natives do not buy the vehicle if it lacks smartphone compati-bility. Of course not all of our buyers are that young. But there are differences be-tween the local buying habits in different parts of the world. In China people buying the same type of vehicle are typically 10-15 years younger than in the rest of the world. In general, older people are more interested in security features. But if you take a look at a typical Range Rover or Jaguar XJ customer, they are very often on a CXO level. That brings with it a high technology expectancy and demand, even if the driver himself is in his late 50s or 60s. Connectivity matters for all age groups. Only a small number of buyers are not interested at all.

With all cars getting connected, where does JLR feel it has an edge?We offer a great end-to-end experience for our customers. That starts when they leave the house and goes all the way to the final destination. Customers take the bits they want. Of course other companies also have similar features, but we have a joined-together experience. Our use of a touch screen makes the experience of in-

26

tegrating smartphone Apps more natural for customers and much easier for devel-opers.

How is the infotainment in the new JLR vehicles received by the market?The reaction of journalists driving the new generation of cars has been very positive. We received an award from Germanys Autobild magazine for our smartphone integration, InControl Apps.

You told us at the automotiveIT Con-gress in London that you hope to get valuable new customer data from con-nected cars. Are you already getting this and, if so, what are you doing with it? Our main desire is to improve the cus-

tomer experience. For example, a cus-tomer may find it useful to send vehicle diagnostic information to their preferred dealer. The customer can opt-in to these features.

Every carmaker says the data belongs to the customers, but theres still a lot of concern over privacy. Is that not jus-tified?It is about our customers. So we adopted the most stringent data protection princi-ples, which means that we comply with German laws - on a global scale We also do not monitor individual customers use of the car. The data is provided to the cus-tomer via the smartphone App, InControl Remote.

Jaguar Land Rover Mike Bell

The Jaguar XE, which was unveiled in September 2014, features a new mid-range infotainment system

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Can you name some IT and telecommu-nications companies you work closely with? And what exactly do you do with them?We partner with multiple mobile opera-tors, including Vodafone, AT&T and China Unicom. We also work with service provid-ers like WirelessCar, AppCarousel and we work with silicon suppliers such as Intel. We have a joint research program with the latter. We also work with Bosch on multi-ple levels for the infotainment hardware and software (Bosch Softech), with Sym-phony Teleca and TCS for infotainment systems integration and with Panasonic for consumer technologies. There are sev-eral more partners we work with.

Theres a lot of talk about driverless driving. Will we at some point see au-tonomous Jaguars and Land Rovers on the road?When were talking about autonomous cars there will be an evolution of technologies rather than a revolution. We will have more and more sensors and functions to automate and assist with driving. We are not setting a time, but, of course, JLR will at some point provide autonomous vehicles. But well also provide a choice. Our customers - whether they are luxury or sports car buyers - like to drive, and it will be the customers choice. A sports car is built specifically for the enjoy-ment of driving. But even in a luxury vehicle you probably won't enjoy being stuck in a traffic jam. So you will be able to engage au-tonomous functions where you choose.

A final question about the future: What will the car look like in 2040?In 2040, connectivity will be pervasive. High-speed connectivity will be standard. The coverage problems we face today will be a thing of the past. In 2040, the view to the outside will be via a screen. This makes different seating layouts possible. Your ve-hicle will be used like a mobile office or a living room, depending on the drivers and the passenger's needs.

Interview by Thomas Koehler

Photos provided by Jaguar Land Rover

Mike Bell is global connected car director at Jaguar Land Rover (JLR). This relatively new position was cre-ated in 2012 to address customer demand for connected car technol-ogies. Bells role combines technical expertise with a focus on delivering a premium customer experience to drive commercial value. Earlier, Bell was chief technology officer at JLR. He has spent more than 19 years working as a senior strategic technol-ogy professional at several compa-nies. His experience spans multiple industries including utilities, manu-facturing, telecoms, oil exploration, and the public sector.

Mike Bell Jaguar Land Rover

28 Verizon Kevin Link

Kevin Link, chief technology officer (CTO), is responsible for the OEM ve-hicle technology and network architecture of Verizon Telematics. He is also in charge of the overall technology strategy. Link is one of the co-founders of Hughes Telematics, which later became Verizon Telematics. Prior to his involve-ment in the telematics industry, he spent 19 years in various engineering roles developing products and services for the US wireless industry.

5 connected car trends for 2015By Kevin Link,Chief Technology Officer (CTO),Verizon Telematics

29

The car is quickly becoming the coolest mobile device we own just ask the 16,000 decision makers and influencers who attended the Los Angeles auto show in No-vember to discuss the latest technological advancements in connected cars. In 2015 more mainstream automakers will adopt connected car and other advanced tech-nologies. Here are five auto technology trends to watch for in the new year:

1. The number of vehicles that include a telematics option will increase: There are 14 automakers that control 80 percent of the car market globally and each one of them has a connected-car strategy. In 2015, well start to see these strategies apply to more car models as connected features such as high-end navigation, telematics and infotainment are included as standard options.

2. Advanced technologies will become a precursor for autonomous vehicles: Future-forward car manufacturers will start to push the envelope on enhancing ad-vanced technologies such as adaptive cruise control and lane departure warning further setting the stage for autonomous vehicles.

3. Competition for off-the-shelf aftermarket solutions will intensify: Overall, adop-tion rates for connected cars remain relatively low. For example, 200 million cars in the US are not connected. The coming year will usher in more competition for solu-tions to benefit the aftermarket.

4. 4G LTE will become the de facto standard and Wi-Fi in the car will become a reality: Often lauded as the early adopters, high-end auto makers will set the course when it comes to 4G LTE and Wi-Fi hotspots in their car deployments as a future-proofing mechanism. While the amount of bandwidth that comes with 4G LTE may not be need-ed by all drivers, automakers do not want to be faced with a situation down the line where they are required to migrate from 3G to 4G because their models have sudden-ly become antiquated. Meanwhile, demand for mobile Wi-Fi hotspots is increasing as rear-seat entertainment in the form of tablets and mobile computers becomes a must-have for parents of small children, limo drivers, field service workers, etc.

5. Wider integration between connected cars and the internet of things: As the internet of things becomes more prolific, location and intent will be central to iden-tifying drivers algorithms, thereby making the car the proxy for delivering on the promise of the connected lifestyle. In other words, intelligent technology will con-tinue to embed itself into peoples day-to-day lives, changing how they engage with the world including the driving experience. (Photo provided by Verizon)

Kevin Link Verizon

30 Volvo Thomas Mueller

As vice president, electrical & electronic systems at Volvo Cars, Thomas Mueller is in charge of a significant chunk of innovation in the new models the Swedish carmaker is rolling out. In an interview with automotive-IT, Mueller explains how Volvo is addressing the new technology challenges and he talks about the opportunities the auto industry has as it integrates more sophisticated connected systems.

" New technologies let car drivers make better use of their time"

31Thomas Mueller Volvo

Id like to start by asking you about the big trends you see in the automotive industry today. What are the transfor-mative forces at work? The three trends I see at the moment I would describe as safe, green and con-nected. On the safe side, I would list ev-erything safety-related thats finding its way into the car. A lot consists of IT and software supported systems. On the green side I would put everything that aims to reduce CO2 emissions. That includes hybrids and electric vehicles. And on the connected side you see everything that is connecting cars to the outside world. In other words, were talking about bringing the car into the internet, but also bringing the internet into the car.

Theres a huge technology leap going on in the auto industry. How difficult is it for owners of cars or drivers to come to terms with all the new stuff?Drivers are picking up the new technolo-gy fairly easy. Thats because the consumer electronics industry has been moving into this space for several years. And in the pre-mium segment of the car market, where we operate, people are very comfortable using all the features of their smartphones. We havent met that many customers who are not familiar with smartphones and connected technologies.

Where do the difficulties then start for the automaker?The challenge for the automaker is how

to bring two worlds together. The tradi-tional automotive industry comes from a very mechanical world. In the past 15 to 20 years it has moved more and more into the direction of electrical and electronic systems and software. That was the first challenge we had. And we could still man-age this well because it was all in the car in what was pretty much a closed environ-ment. Now the car is getting connected and we have to deal with data exchang-es with the outside world. Were talking about different technologies, different lifecycles, a different way of thinking and different possibilities for new features.

Can you explain that a bit more?Take software. In most of our cars, were looking at highly embedded systems. They were developed according to certain specifications, were automotive-grade and built in line with the automotive de-velopment cycle and the lifecycle of the car. With IT, its a completely different story. Hardware and software are pretty much separate from each other. You can exchange hardware without the custom-er noticing it. You can swap applications from one day to the next. You can very quickly apply patches, bug fixes or new applications. These are two worlds com-ing together and they need to learn from each other.

You mentioned the issue of different development cycles for the automotive and the IT industries. How do you bring

32 Volvo Thomas Mueller

these two in sync with one another?You need to put a lot of thought into this. You need to get the interfaces right. Were not talking about one side adopting the lifecycle of the other. Its all about co-exis-tence. Were doing a lot of work on devel-oping an architecture that starts in the car but also goes outside of the vehicle. The question is how we can make interfaces that are robust enough to deal with a car, which has a lifecycle of 10 to 15 years, and, at the same time, make the newest appli-cations available to customers during this lifecycle.

Tell us a little bit, please, about the sales and marketing approach and how it has to change to sell what is es-sentially a totally new kind of vehicle.When it comes to marketing, the key is to explain the new features to custom-ers. The industry is challenged by this, because the environment is so complex and theres so much detail behind all the innovations. Look at all the differtent fea-tures you can get in a new Volvo. While you operate a smartphone, you can call a call center, bring your applications into the car and so on. We need to explain all these features to customers in a crisp, transparent and logical manner. Were do-ing many things in this area. Were running trailers on the internet, were investing in our sales force, were installing demonstra-tors at our dealerships, just to name a few.The internet plays an important role, too. Just google Volvo On Call, our connect-

ed smartphone app, and you see lots of trailers explaining everything. Or log in to our web site. With lots of smart customers browsing the internet before they make a purchase, you need to explain things in a much different fashion.

How is IT and communications tech-nology enabling your organization to operate smarter and more efficiently?These new technologies help broaden the customers experience beyond owning the car, sitting in it and driving it. Were talking about preparation for the journey, but also what you do after the journey and what services you need around your car. We can, for example, help plan your trip in advance, send navigation information to your system. When you enter the car, it already knows where youre going. You can switch on the heating or air condi-tioning in advance and after the trip you can download your driving journal, which makes sense for a business travel expens-es report.

And does this new connectivity pro-vide an opportunity to improve car maintenance and service as well?In the context of service, we introduced in May our connected service booking feature, which lets the car tell the dealer-ship that it needs maintenance. The deal-er then proposes a time, which you see on your in-car monitor. You can respond by either calling him up or just agreeing through the push of a button in your

33Thomas Mueller Volvo

car. Its very important in the premium segment that you offer a wider range of convenience features for the customer. Modern people dont have time and this kind of feature lets them make better use of their time. There are great opportunities for the auto industry here.

Volvos used to have a little red light that would come on when you needed service. Are those days finished?That red light will still come on, but a lot of things happen at the same time. The infor-mation goes to the dealer and the sched-uling can then take place automatically.

Interview by Martyn Warwick,

TelecomTV, for automotiveIT

www.telecomtv.com

Photos by Silvia Steinbach

Thomas Mueller is vice president electrical & electronic systems at Volvo Cars. He joined the Swedish automak-er in April 2012 and has responsibili-ties that include E/E architecture, HMI, infotainment and connectivity, the electrical distribution system, body electronics and electric propulsion. Before joining Volvo, Mueller worked in different management positions at the BMW Group. He holds a PhD in nuclear physics with a strong back-ground in electronics and IT, comple-mented with studies in economics. Early in his career, Mueller worked at several international research centers both in Europe and the US.

These new technologies help broaden the customer experience beyond owning the car

34 MHP Oliver Kelkar

Oliver Kelkar is responsible for business innovation management. In this function he is driving themes of the future for the automotive and manufacturing industries.

Industry 4.0 (R)EVOLUTION

By Oliver Kelkar,Business Innovation Manager,MHP

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In recent years, business organizations have faced a number of new challenges. The most important one is:

FLEXIBILITY

The customers growing demand for individuality, ever more volatile markets, global competition, shortage of resources, ecological aspects and cost pressures force business organizations to become more flexible:

Flexibility with regard to their own production and product development, but also flexi-bility with regard to the stronger internationalization of the lines of industry. For instance, just look at the fact that consumer electronics has found its way into automotive vehicles. Volatile markets with heavy fluctuations in sales have an increasingly drastic and perma-nent impact on manufacturing companies. After all, fluctuations of this kind prevent a reliable forecast of the required product volumes. As a consequence, the ability to ensure high flexibility regarding delivery periods and quantities has become very important for business organizations, if they wish to still be able to meet customer expectations in future. This means that, in future, manufacturing companies will find themselves in an en-vironment in which both the correct and rapid response to changes on short notice and absolute customer orientation while taking the best interests of the staff into account will be of vital importance. The shortage of natural resources and space consumption in urban areas will have an impact on the decisions and actions of business organizations.This fourth industrial revolution is inspired, made possible and driven by the Internet of Things and Services. The focus is on the Smart Factory. It is powered by cyber-physical systems (CPS). It is served by smart logistics, by intelligent mobility, by smart buildings, resource-saving power generation and supply. It produces smart products that continue to evolve and change, even after leaving the smart factory.

With our MES projects (Machinery Execution Systems) which are frequently based on SAP technology, we integrate the centralized business management with production equipment. The resulting transparency yields flexibility - flexibility for job order planning, for logistics and production. This integration constitutes a significant component in the implementation of Industry 4.0 with its cyber-physical systems.

Oliver Kelkar MHP

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Figure 1: The role of IT from the perspective of the business departments (MHP-Study Industry 4.0,

Nov. 2014)

Industry 4.0 is an interdisciplinary challenge that needs to be dealt with as a top manage-ment issue. The business departments expect a tight integration with IT. IT plays a central role within the company. It orchestrates the backbone of the business.

The Internet of Things and Services is the technical vision of integrating objects of any kind into a universal digital network. Sensor and identification technologies give various objects a unique identity and enable their localization. Thanks to digital product mem-ories and embedded systems things (such as cars, consumer goods or clothes) commu-nicate both among themselves and with their environment. They can make decisions on their own and trigger actions. As a result, the physical world of things is linked with the virtual world of data. Cyber-physical systems constitute the core, the infrastructure, of Industry 4.0. These are devices, buildings, transport vehicles or production plants and logistics components that contain embedded systems and are capable of communicat-ing via the Internet. These objects are intelligent and capable of assigning and executing tasks on their own.

Thanks to its know-how on contact-free identification technologies, MHP helped to cre-ate an RFID-based solution for test vehicles in the Transparent Prototype project. The assembly status is automatically documented prior to each test run and the test run data

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How would you rate the importance of a close strategic cooperation with your IT?

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MHP Oliver Kelkar

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is then compared with this data. As a consequence, we obtained faster and more reliable results which motivated us to develop a significantly enhanced, GPS-based integration for the entire test vehicle fleet on behalf of our customer.

The necessary platform for company-wide or cross-company data storage is provided by cloud computing solutions. The smart objects, products, machines, and internal ICT sys-tems are linked with the cloud via communication networks. This way, data is also avail-able to mobile applications. Using the MHP BIG DATA scenarios, we enable our customers to create value from data, to make (partly) automated decisions and analyses in real time. In the course of the fourth industrial revolution, our industrial production, the working methods and probably even our entire social life will fundamentally change.

Still, how well is Germany, how well are the leading markets of the automotive and man-ufacturing industry prepared for the pending changes? We took a closer look at this question and carried out the study Industry 4.0 a positioning of the German automo-tive and manufacturing industry (November 2014).

Figure 2: Industry 4.0 as an opportunity for business organizations and Germany as a business and

investment location (MHP-Study Industry 4.0, Nov. 2014)

The findings of the study show that business organizations still need to cope with many challenges. Certainly, this equally applies to all organizations in society, such as associ-ations, research institutes and politics. It would be easier to get a grasp on this topic, if

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Deutschland wird bei der Umsetzung und Anwendung von Industrie 4.0 eine Vorreiterrolle einnehmen.

Langfristig ist die Umsetzung von Industrie 4.0 fr Ihr Unternehmen erstrebenswert.

Industry 4.0 Perspective

In the long run, the implementation of Industry 4.0 is desireable for your business. Germany will be a forerunner in the implementation and application of Industry 4.0.

n=227 I fully agree I agree I do not agree I do not agree at all I cannot judge this

Oliver Kelkar MHP

Unternehmen erstrebenswert. In the long run, the implementation of Industry 4.0 is desireable for your business.

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specific, industry-related case studies were used. This is, in particular, true for mid-sized companies. There is a large demand for concepts, paradigm shifts, technologies and solutions in connection with Industry 4.0, although the Industry 4.0 is not an established concept yet and the underlying understanding will have to grow. At present, there is still a certain degree of skepticism and uncertainty. Generally, business organizations attach a high importance to Industry 4.0, which will significantly rise in future, although only 50 % believe that Germany will be able to play the leading role. This complex topic is definitely a task for the top management.

80 % expect that Industry 4.0 will hold a high benefit for their business. In particular, the ability of responding to changing conditions in a highly flexible manner stands in the foreground. Cost and resource efficiency are also driving factors. Industry 4.0 technologies such as BIG DATA, public clouds and the Internet of Things are gaining in importance.

Naturally, the machinery and plant engineering industry is more intensively involved in Industry 4.0 than the automotive industry, since the efficient and flexible production of smart products and vehicles requires cross-linked, smart und versatile machines.

2012 Mieschke Hofmann und Partner Gesellschaft fr Management- und IT-Beratung mbH 5

Roadmap

Environment analysis Corporate analysis Starting point Assessment of Industry 4.0

MHP Oliver Kelkar

Figure 3: MHP Assessment - Industry 4.0 can be implemented and planned

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If a business organization wishes to be among the leading suppliers, there is no other way than dealing with this range of topics already now and creating added value by implementing Industry 4.0. It should be kept in mind that large investments may be required that will pay off in the long run. A strategic approach with a flexible roadmap will have to be developed in order to avoid that the need for investments jeopardizes Industry 4.0. The MHP consulting product is tailored to this flexible roadmap. Based on the corporate strategy, the impacts from the environment and the market situation, a roadmap with specific recommendations for the implementation and actions will be developed. A cat-alog of 200+ actions with related criteria and weighting will help business organizations to benefit from previous experience.

In order to make Industry 4.0 a success, all players will have to engage in a joint and constructive discussion. Prof. Dieter Kempf, BITKOM chairman, correctly summarized the core of the challenge presented in this paper when he made the following statement: If we do not implement Industry 4.0, others certainly will. And if we wish to realize it, we will have to do so quickly, since our global competitors have been dealing with this topic for a while. So let us get going! (Photos provided by MHP)

Oliver Kelkar MHP

40 Qoros Maurits Aalberse

Qoros Auto was founded in 2007 as a Chinese-Israeli automotive manu- facturing company headquartered in Shanghai. The first Qoros production model, the Qoros 3, made its public appearance at the Geneva Motor Show in March 2013 and went on sale in China in December 2013. From the start, the car has come with the QorosQloud infotainment system as standard. Maurits Aalberse, director of Connected Services at Qoros, spoke to auto-motiveIT about the brands infotainment strategy and its plans going forward.

" Car connectivity is the new battle-ground for product differentiation

in the automotive sector"

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41Maurits Aalberse Qoros

Please update us on how Qoros as a new carmaker is doing.After our initial success with our first pro-duction car the Qoros 3 Sedan we received the second 5 star EuroNCAP crash test rating for our second model, which debuted at the 2014 Geneva Mo-tor Show, the Qoros 3 Hatch. We also just recently presented our third model at the Guangzhou auto show in November2014. Its called the Qoros 3 City SUV. We also debuted the second version of our QorosQloud infotainment service there.

Can you please summarize the strategy behind your infotainment package?We strongly believe customers today and tomorrow expect high-quality connectivity options in every car. People dont line up at car dealers any longer just to look at new models. Car connectivity is the new battle-ground for product differentiation in the automotive sector. We offer an 8-inch ca-pacitive touchscreen standard on all Qoros cars, which is unique to the segment we operate in. Also, 95 percent of our cars have access to our QorosQloud connected ser-vices. This cloud-based system offers a wide range of services including navigation, driv-ing control and social sharing. And its very intuitive and easy to use.

How much of the brands initial success in China comes from the standard info-tainment package?The infotainment package is a strong fac-tor in the success of the Qoros brand. We

discovered that 75 percent of Qoros buy-ers actively use the majority of the core services in their car and more than 90 per-cent would recommend QorosQloud to friends and family. Thats a great start and our challenge now is how we can make this number 100 percent.

So far youre only in China. What kind of data security concerns are you deal-ing with in the market and how do you address them?Hackers of any kind target connected objects everywhere in the world. We are working with world-class global partners in the end-to-end QorosQloud architec-ture. That includes the car and the back-end. Our partners are strongly involved with us in this area. Partners include Micro-soft, China Unicom, Harman, Wireless Car, and Neusoft/Alpine.

Given the dominance of the mobile phone in China, do you need an em-bedded system there as well?Our onboard unit is easy to operate. It offers local functions as well as functions relying on cloud connectivity and hybrid as a continuum. We see the car monitor as one of the screens for the users mobile journey. The idea behind this is simple. For example, you plan your route on any device; it does not matter if this is your PC, your tablet or your smartphone. Your smartphone tells you about the whole journey including walking information. You then use the screen in the car while

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driving. When you enter the car, one touch of the monitor is all you need for the car to take over from your phone. When you park the car at or near your destination with the help of our cloud-based dynam-ic parking information, the smartphone takes over again. The screens augment each other and each has the information that you need at a particular time.

At the automotiveIT Congress in Lon-don this summer you said that the car must be or must become a fully con-nected part of the digital lifestyle. How far are we removed from that today or is Qoros already there? We are already fully connected at Qoros.

The customer-centric digital ecosystem was pioneered in Qoros first production car and launched in late 2013. Today, 95 percent of our cars are sold with the con-nected services system fitted as standard. But we are never satisfied and keep on innovating. We focus on ease of use and gamification. Our customers have fun us-ing our systems. With the use of the social media and community elements weve exceeded our own expectations.

Please tell us some more about Qoros-Qloud.We feel we offer a complete portfolio and for a car priced at about 16,000 euros in China we offer unique cloud-connectivity

Qoros unveiled a hatchback version of the Qoros 3 at the Geneva auto show in March 2014

Qoros Maurits Aalberse

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standard. Were very happy that other car-makers also see connectivity as more and more important. With our QorosQloud we created a head start and we are building a digital value chain from the ground up. It will be relevant not only for our customers but also for business partners. Think insur-ance or car dealers.

Which IT and telecommunications companies do you work with most closely? We are a true first mover in China and work with several top suppliers. Micro-soft provides telematics service, we use the dispatcher from Wireless Car on China Unicom as telecommunications provider. On the backend side, traffic information is supplied by AutoNavi and enhanced by TomTom. We get map services by AutoNa-vi and we also integrate server content providers like EasyPark for Dynamic Park-ing services, Dianping local services that work like Yelp in the US, and many more. Working with partners help us to innovate at high speed. Our cloud-based approach allows regular incremental updates, which makes us flexible.

But you dont outsource everything.We rely on key functions to be provided in-house: We have a team for the product vision, product management and concept as well as a design team that focuses on user experience, interaction and graphic design and a technical team to get it done, with, indeed, a strong link to our partners.

We also have a business development team that supports CRM and after-sales as well as our dealers and works with partners such as insurance companies. Together we form a multi-disciplinary, multi-cultural team, which translates in a very short time to market of an integrated digital ecosys-tem and value chain. Of course, we started with a clean sheet of paper, but this is just a part of our success story in the connect-ed vehicle segment.

Interview by Thomas Koehler

Maurits Aalberse is director of Connected Services at Qoros Auto. He joined the China-based interna-tional car company in 2012, having gained 16 years of experience in multiple disciplines across the au-tomotive and technology sectors., At Qoros, Aalberse is responsible for telematics and QorosQloud, a con-sumer-centric digital ecosystem that offers more than 30 functions, includ-ing enhanced navigation, driving control and social sharing accessible via connected in-car infotainment, a consumer web portal and mobile device app. Earlier in his career, he worked at IBM and TomTom, where he was director of product manage-ment & marketing.

Maurits Aalberse Qoros

44 GENIVI Philippe Gicquel

Philippe Gicquel is general manager for cockpit, safety and infotainment EE modules at PSA/Peugeot-Citroen. He currently holds the presidency of the open-source association GENIVI.

Answering key infotainment questions

By Philippe Gicquel,President, GENIVI

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In-vehicle infotainment (IVI) has been in the spotlight for several years and with recent announcements from Apple and Google, the focus is even more on this important area.

With the smartphone, the consumer electronics industry has created a revolution that has totally changed consumers and their habits. Smartphones are now both communication devices and digital extensions of their individual owners. Benefit-ing from this digital extension anytime and everywhere is a requirement for more and more people, which puts the automotive industry under significant pressure to answer a growing number of questions.

How to deliver to customers in the car their normal smartphone experience as well as an undistracted and safe drive? How to manage the rapid evolution of consumer electronic devices? How to manage the diversity of customer expectations resulting from the di-versity of the smartphone industry? How to balance the pros and cons of smartphone integration with the pros and cons of a pure, embedded solution? Is there a risk to lose brand recognition in a car to the profit of the consumer electronics industry? Should cars be connected by themselves or through smartphones? What is the value of car data and should smartphone apps get full access? How is cyber-security managed? What level of integration or segregation is needed between pure infotainment and car functions tied to driving assistance? An exhaustive list of questions would fill pages.

Multiple options

Most of the open-ended questions listed have multiple possible answers. And for those that are not open-ended, the answer may depend on a variety of factors. These include car segment, market zone, brand strategy, who you put the question to in a company, when you ask it, etc... For this reason one should be wary of people who pretend they can describe the future in definite terms. Multiple options are possible and will eventu-ally coexist in coming years. Uncertainty is the only certain assessment one should make when talking about the future. What is clear and undisputed today is that automakers do not wait for the answers to all questions before moving forward. They have already joined organizations that define smartphone integration standards. After the generation of systems allowing Bluetooth phone, including Bluetooth audio streaming, the new trend is to allow drivers on the road to use smartphone applications through the cars HMI equipment: large touchscreen, loudspeakers, microphone, steering wheel switches and commands.

Philippe Gicquel GENIVI

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This strong trend does not mean that automakers have a smartphone integration only policy. They still have several good reasons to keep some of the features native to the

embedded head-unit. First, this head-unit does not provide only CE type infotainment but also supports specific car features such as front and rear parking cameras, on-board computer, vehicle function configuration, climate control and other features. Second, the smartphone market is diverse and fast moving. Covering a broad market-share of smartphones will be challenging and no automaker can afford to leave customers with-out a preferred solution. Third, some car companies are unwilling to lose control of the most important customer-facing branding opportunity, the user interface delivered by the HMI. Fourth, data is seen by some people as the black gold of 21st century. Modern

APPLE(Carplay)

OAA(Android Auto)

CCC(Mirrorlink)

XXFIAT - CHRYSLER

FORD

GM

HONDA

HYUNDAI - KIA

JAGUAR LAND ROVER

MAZDA

MERCEDES

MITSUBISHI

PSA PEUGEOT CITROEN

RENAULT - NISSAN

SUBARU

SUZUKI

TOYOTA

VW GROUP

BMW

VOLVO

X

XX

XX X

XX X

XX X

X

XX X

X X

XX

X X

XX

XX X

X

XX

X X

XX X

X X

XX X

Info Web September 2014

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cars generate a huge amount of data that may be of interest to a very diverse and grow-ing number of companies. The ability to collect and process data and then resell the information is something that many automakers may like to keep under control.

Competitive solutions

Eventually, some other considerations may favor embedded solutions. Such may be the case for navigation for autonomous vehicles, as it is not likely that an automaker will trust a smartphones navigation for autonomous driving use-cases. For all these reasons, a large majority of car companies still believes they need a competitive solution to devel-op embedded infotainment. That means a solution under their control, with smartphone integration being one feature among many others.

GENIVI is working to develop one such compet-itive solution. Since it was launched in 2009 by BMW and Intel together with PSA, General Mo-tors, Wind River, Delphi, Magneti-Marelli, and Vis-teon, the GENIVI Alliance has grown to maturity. Products using GENIVI deliverables have been launched; membership is stable at more than 160 companies; and movement from a closed industry organization to an open-source development approach has been accomplished. GENIVI is now launching a more aggressive technical and marketing strategy in order to better leverage the great assets realized during the last five years. Consultants estimate that GENIVI-based systems mar-ket-share will reach more than 20 percent by 2018. And with member activitiy on the rise and new automakers joining the alliance, the trend suggests growth will continue.

GENIVI well-positioned

If we look at the big picture of connected cars and the move to the Internet of Things, GENIVI appears to be well positioned for the future. GENIVI software embedded in the head unit is in a critical path of the growing number of services provided by the connect-ed car. The head unit deals with infotainment and navigation, both of which use data from the cloud. The head unit connects through Bluetooth or Wifi to customer devices enabling communication between vehicle and cloud. On-board HMI enables interac-tion with connected services provided by the head unit. Through its partnership with Autosar, which defines car ECU standards, and with W3C, which defines web standards, GENIVI helps define software standards for sensor-to-cloud communication.

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Through its Linux-based, open source model, the alliance is facilitating a dramatic reduc-tion in development cost and time to market. GENIVI offers the automotive industry the agility that Android brought to smartphones, plus the fact that the development is facil-itated by a non-profit organization with broad community involvement. This last aspect is a guarantee for the members that they will keep control and can steer developments without the liabilities incurred by unbearable commercial contracts.

HTML5 brings convergence

Three other important technology moves need to be mentioned to draw the full picture in the area. First, HTML5 deployment brings some convergence in apps development. Apps using this technology can be deployed on any device, including GENIVI head units. Second, personal data storage in the cloud allows people to get their personalized en-vironment everywhere on any device without the need to carry it with them. Finally, telecommunications technology on the SIM card is moving quickly, especially in the Eu-ropean market. European carriers may allow the use of reprogrammable SIM cards, thus allowing new business models for communication contracts. For example, a car could become just one of the devices included in a multi-device, family contract.

Bring all these technologies together, and you can imagine a future where people do not need to carry their digital extension with them but can access it anywhere, including in their cars. Such a trend has been described as the pervasive step. It appears it happens in every technology field after a while.

The future

Through wearable devices available today, the movement of diversification of formats for a persons digital extension has started. The car as an electronic device may become one object among others that implements and provides access to the customers digital world, without the need of any intermediate device.

Once again, the uncertain nature of the future is the only certain assessment we can make, so the description above is not THE future but only one hypothetical view. But one thing is clear: GENIVI as the major organization in the in-vehicle infotainment ecosys-tem will play an important role in the delivery of these future trends for the automotive industry. (Photos provided by GENIVI)

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50 Google Hugh Dickerson

Hugh Dickerson is a senior industry head at Google. He leads the team that works in partnership with the automotive industrys largest players in de-veloping and delivering successful digital marketing strategies.

Be First to the Future

By Hugh Dickerson,Industry Head, Automotive,Google

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The world is changing fast, being fueled by the rapid acceleration of technological advances. As I sit writing this piece my youngest son is reading the news on his tablet and recounting how Alan Eustace, one of my Google colleagues, has just skydived from a height of more than 40 kilometers at speeds of over 1,300 km/h. Alans feat is mind-blowing but so also are the technological advances that allow the spread of this news, in both words and video, so wide and so quickly. He broke the record previously held by the Austrian Felix Baumgartner. Felixs jump has been watched over 40 million times on YouTube and was watched by so many globally at the time that it used 8 percent of the worlds internet bandwidth.

This pace of change in media is incredible. The telephone took 75 years to scale to 50 million users, the radio took 38 years, the television 13 years and the internet just four years to reach that same figure. Perhaps making the point of this acceleration most poignantly is that the Angry Birds app took just 35 days to reach 50 million users. This rapid acceleration is only set to continue. As you read this you are experiencing the slowest day of technological change for the rest of your life. This pace of change can be bewildering for many of us as our linearly wired human brains struggle to come to terms with the exponential rates of advancements.

Hugh Dickerson Google

Alan Eustace skydived from a height of more than 40 km at speeds of over 1,300 Km/h

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It is against this backdrop that I joined Google just over three years ago to lead a team that works in partnership with automotive manufacturers in developing and delivering successful digital sales and marketing strategies. This move followed twenty years of working across the globe in various parts of the automotive industry.

During this last decade, advancements in vehicle design and performance have both benefitted from and fueled this technological revolution. There have been major ad-vancements in cleaner more efficient propulsion systems and there is also much devel-opment time spent on connected vehicles and driverless cars. I would contend, how-ever, that vehicle brands are not generally at the cutting edge, compared to leading retail businesses, in keeping pace with their consumer and grasping the opportunity that digital offers them in forming more profitable and longer lasting relationships with their drivers.

The capacity to change and grasp the digital opportunity is critical for manufacturers as the consumer shifts behaviors and small agile disruptors flood into the auto space snapping at the heels of the car giants. These disruptors are sometimes well known and publicized such as Tesla, which is perhaps as well reknowned in the industry for chal-lenging the distribution model as it is for its sporty electric vehicles. But more often the disruptors take the form of smaller startups or disintermediators sensing opportunity as auto manufacturers struggle to change gear and accelerate the adoption of digital into their sales and marketing.

But it is still not too late to be early in the digitization of automotive commerce if they act now. The key to success, in my belief, is switching the focus of sales and marketing departments away from what is emerging from the factory gates to the behaviors of existing and future customers. The car product cycle is understandably long due to the huge amount of investment and research that goes into designing and building a new model, but it is not this rhythm that should be dictating the pace of change in commu-nication and retail strategies.

The role of my team is to help sales and marketing teams across the industry cast off the shackles of the status quo to ensure automakers commercial businesses are fit for purpose for Generation Y, who have grown up in the digital age and are forecast to make up 75 percent of vehicle customers by 2025. We believe there are a number of key be-haviors that will characterize success in automotive sales and marketing going forward and I would like to share these thoughts.

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The first of these behaviors is being prepared to take risks or, perhaps more importantly in the motor industry, remove the fear of failure. At Google we think that if you are not failing it means you are not setting ambitious enough goals. Our major projects are born out of moonshot thinking, whereby we have identified a huge challenge and then tack-led it with a radical solution together with breakthrough technology.

Take Risks

Notable examples of late include Project Loon. We have a vision that the whole world should benefit from internet connectivity, but currently two-thirds of the worlds popula-tion does not yet have internet access. Project Loon is a network of balloons traveling on the edge of space, designed to connect people in rural and remote areas, help fill cover-age gaps, and bring people back online after disasters. More relevant to this publication is our work in the field of driverless cars. Our goal is to help prevent traffic accidents, free up peoples time and reduce carbon emissions by fundamentally changing car use.

Today automotive marketers often find themselves constrained by the existing distri-bution model. The current unwillingness to risk destabilizing the fine balance between all stakeholders leads to inaction that allows other new players to disintermediate prof-

Hugh Dickerson Google

Project Loon is a network of balloons designed to connect people in rural and remote areas

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itable areas of the business. Similarly, conservatively persisting with a media mix that does not match the pattern of consumption of your audience seems more risky than actually breaking the status quo and fully embracing digital