The move by automakers to concede the technological centerpiece of a vehicle’s dashboard did not come quickly or painlessly for Detroit engineers who have long prided themselves on their ability to understand what consumers want from their cars. Even more unnerving to some is that Google and Apple soon may be releasing cars of their own.
Apple and Google have each received pledges from roughly 40 automakers to work with their technology. Yet even as executives from either industry shake hands over these partnerships, there’s a clear undercurrent of tension in the alliance between Detroit and Silicon Valley.
Software is as central to a car’s character as the stitching on its seats or the feel of its steering wheel. And some auto industry executives are open about their need to partner with firms that are on the front lines of innovation.
Many of these tech firms are also launching projects — from driverless fleets to ride-sharing models such as Uber — that are expected to disrupt the basic business of buying or leasing a car.
“Carmakers are definitely worried that their business model is going to be seriously threatened in the next 10 years,” said Karl Brauer, analyst at Kelley Blue Book.
Added a senior auto industry executive, who spoke on condition of anonymity in order to speak more freely: “It’s interesting to see how Silicon Valley looks at us, and that’s as one word — prey.”
In the face of disruptive projects emerging out West, carmakers are racing to bolster their technology prowess. At the nation’s biggest consumer electronics show last week and at the Detroit Auto Show this week, some of these companies are recasting the industrial image that has defined them for decades.
Gill Pratt, the new chief executive officer of the Toyota Research Institute, said that robotics could be a major business for Toyota in the future, and perhaps eventually its primary focus.
“The old joke is that Toyota is the world’s best manufacturing company. They just happen to make cars. Times have changed, and software and data are now essential components of Toyota’s future mobility strategy,” he said. “It is entirely possible that robots will become for today’s Toyota what the car industry was when Toyota made looms.”
Last week, several automakers announced partnerships that would have seemed odd just a few years ago. GM announced that it would invest a half-billion dollars into the ride-sharing company Lyft — a business that on the surface would seem to be competition to companies selling cars to consumers. Brauer said the partnership should help GM absorb lessons that will be crucial to its survival as it adapts to a new era of mobility.
“The GM-Lyft alliance follows news of a Ford-Google alliance, both of which are only the beginning of a series of automaker-tech tie-ups we’ll see in the coming months,” added Brauer, the Kelley Blue Book analyst. “The rapidly-shifting nature of personal transportation has traditional car companies scrambling to position themselves for an uncertain future.”
Meanwhile, Ford said last week it would work with Amazon and drone firm DJI to get cars to talk to homes and drones. And even as it signed deals with Apple and Google to build info-tainment systems for its cars, Ford said it would continue to work to make its own proprietary system an industry standard. Toyota announced it would use Ford’s system and other manufacturers including Subaru and Mazda, said they would consider it as well.
Ford chief executive Mark Fields said that the number of nontraditional competitors coming into the industry has motivated the company to innovate and be more tolerant of mistakes and failure. He added that the company has been drawing lessons from the ethos of Silicon Valley after opening an office there, looking at the consumer experience in a much more holistic way.
“For years in this industry, we’ve designed vehicles in a certain way. The switch engineer that does the turn signal doesn’t talk to the headlamp switch engineer, and you end up with an experience that, in our past, hasn’t quite worked,” Fields said at the major consumer technology conference here.
“As our vehicles become a part of the Internet of Things, and as consumers give their permission to us to collect that data, we’ll also become an information company,” Fields added.
So far Detroit’s record on creating easy technology experiences for drivers has been mixed.
Consumers have expressed particular dissatisfaction with automakers’ info-tainment systems — the primary way consumers interact with the technology of their cars. In 2013, nearly two-thirds of respondents to a Consumer Reports survey said they had problems with those systems. Those issues have persisted in recent years, dragging down the reliability ratings of some car brands, other surveys show.
Still, automakers can be defensive when it’s suggested that they don’t have the technical chops that their tech counterparts do, and that they may end up making shells to house software from the Googles and Apples of the world. Modern automobiles are practically run on computers, after all. Sophisticated programming helps monitor engine performance, control idling speed and can even fool environmental regulators, as Volkswagen customers infamously discovered last year.
They also remain wary of surrendering too much control over the driving experience to tech firms that may not understand the nuances of how to build a car.
“I would venture to guess that for the vast majority of this room, the most technically complex thing you own is your car,” said Raj Nair chief technical officer at Ford. “The technical complexity we’re working with in an automobile is not just about getting on Google and researching something. You’re trusting your life to it.”