Article below appeared in hollywoodreporter.com on 25 November 2013 by Michael Walker.
Technology is reshaping the auto industry as thoroughly as it is transforming Hollywood and will be just as disruptive. “This is fundamentally changing how we drive,” said Sven Beiker, of Stanford University’s Center of Automotive Research.
At the 2013 L.A. Auto Show, which opened to the public Nov. 22 and continues through Dec. 1, signs of an industry in ascendance after a glimpse of the abyss during the financial crisis were evident at every turn, from the debuts of more than 50 spit-polished models to the sunny demeanors of the eternal “booth girls” in skintight minis and towering heels dotting the floor of Los Angeles Convention Center.
There was much to celebrate. According to Motor Intelligence, year-to-date U.S. auto sales are up in every category. The luxury segment alone was up 13 percent over 2012, including Hollywood favorites Mercedes-Benz (12.6 percent), BMW (12.8 percent) and Porsche (a staggering 24.4 percent). At every press conference–at Jaguar, Mercedes-Benz, Porsche and even once-beleagured Chevrolet–corporate factotums cited spiking sales while crowing that happy days were definitely here again.
But behind the scenes, carmakers revealed themselves to be in the thick of what Hunter S. Thompson liked to call an “agonizing reappraisal.”
Having survived a swooning marketplace during the crisis, the once-complacent auto industry is taking stock of several coming distractions hurtling toward it at a pace that no longer allows for business as usual or leisurely product cycles — the latter borne out by Volkswagen’s 4 percent decline in North American sales this year, one of the few carmakers to show a loss, which analysts blame on VW’s lack of refreshed models.
So what could worry the industry during a year of otherwise stellar performance? In a word: tech.
At a series of panels held during the show, executives, industry analysts and academics were unanimous in their conclusion that technology is reshaping the auto industry as thoroughly as it has entertainment and will be just as disruptive. The changes already underway comprise demand for seamless integration between cars and personal technology to the advent of driverless cars, which experts predict will be available in limited form as early 2015 with fully autonomous vehicles arriving by 2020.
“This is fundamentally changing how we drive,” Sven Beiker, executive director of Stanford University’s Center of Automotive Research, said during the show.
In an object lesson of the importance of technological relevance, Mercedes-Benz spent $1 billion on a complete revamp of its flagship S Class sedan and stuffed it with tech so advanced that a lightly modified version of a 2014 production model was able to complete a 62-mile driverless journey on German roads relying entirely on its radars, 3-D stereoscopic cameras and other computer-assisted aids. At the show, Audi unveiled its 2015 A3 sedan, which utilizing the same advanced 4G LTE standard as smart phones allows the car to create an in-vehicle WiFi hotspot capable of handling high-definition video streaming to as many as eight devices.
“Technology is relentless,” Mike Bettaglia, director of U.S. auto retail at J.D. Power and Associates, said during the show. “This is not going to decelerate.”
Self-driving cars emerged as one of the most popular and contentious topics. Although drivers remain deeply ambivalent about the technology–66 percent of respondents in one survey said they wouldn’t feel safe riding in a driverless car–they nevertheless endorse the precursors to fully autonomous vehicles already available, such as adaptive cruise control and parking assist. The consensus at the show was that the public will adapt as the technology is phased in and the benefits become evident–according to one estimate 4.2. million accidents could be eliminated and 21,700 lives saved if 90 percent of US. vehicles were self-driving.
Experts at the show also stressed that expectations about self-driving cars must be managed so that the public will not shun the technology when the inevitable malfunction causes a fatality. “Incidents will happen,” cautioned Beiker.
“We should not believe we are going from 5.3 million crashes and 33,000 fatalities annually and somehow this magical technology can protect in every situation,” said Ron Medford of Google, which is deep in the development of software for autonomous vehicles and is testing a fleet of self-driving cars. “Seatbelts were about 50 percent effective in reducing frontal crash fatalities,” Medford added. “Electronic stability control was 75 percent effective in preventing rollover fatalities in SUVs. I think self-driving cars will exceed that. But will it be 100 percent? No.”
Meanwhile, carmakers are struggling with the demands of drivers who insist upon an unprecedented level of connectivity while on the road, which must be balanced with safety concerns.
“There’s more and more technology in front of the driver,” said Bruce Mehler, a research scientist at the Massachusetts Institute of Technology. Mehler cited data collected by Nielsen about in-car use of wireless devices that showed phone use topping the list, followed by texting, emailing, social networking and shopping. “The car is turning into shopping center,” Mehler said. “Amazon is the number 4 ranked site.”
The demand for connectivity is also testing the capabilities of automakers’ infotainment and navigation systems, which must seamlessly mesh (but often don’t) with dozens of models of smart phones, to car dealerships where sales managers struggle to master the technological vagaries of the cars they sell or risk alienating increasingly tech-savvy customers.
J.D. Power’s Bettaglia said that 67 percent of new vehicle owners have a smart phone and 41 percent use one while at the dealership to compare prices, search inventory and read reviews. Car deliveries that a decade ago involved handing the keys to the customer now require 30 minutes or more of tech tutorial. Carmakers are meanwhile trying to balance fulfilling customer demands for connectivity with a patchwork of driving laws that prohibit hands-on smart phone use. The dilemma for manufacturers is to give drivers what they want without compromising the evolving ethic over tech-induced distracted driving.
“The main concern is safety,” Jonathan Tarlton, of Nissan’s vehicle connected services group, told The Hollywood Reporter. “But it we dumb down the experience, then we’ve lost the customer, because they’ll pick up their smart phone.”
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