Autos Will Survive/Thrive After Digital Revolution, Says Porsche.
“This is just the beginning of the most fundamental transition and biggest revolution since the invention of the automobile”
The automotive industry sometimes appears to be shaking in its shoes as it contemplates a future threatened by new technology.
The old idea of simply making the best possible cars and selling them for the best possible profit has gone out the window as connectivity, electrification and the possibility of computer driven vehicles opens up the possibility that upstart new entrants might be about to blindside traditional manufacturers.
Then there is the perceived threat from new ways of doing business which suggest buyers in the future may prefer to lease cars only when they need to use them. Finally, it will have dawned that most cars sit on driveways for 96% of the time and it is simply irrational to own one.
But if you’re thinking of turning your garage into an extra bedroom and letting it out, you may be disappointed.
Thilo Koslowski, Managing Director of Porsche Digital, concedes that the industry is facing a dangerous crossroads. But he reckons the traditional industry in general and Porsche and its sports cars in particular will survive and thrive through the challenge.
Far from becoming obsolete, the car will become an even more important fact of our lives, becoming the ultimate mobile device. Porsche plans to enhance the digital lifestyle. The perceived threat from new technology companies won’t materialize because the business of making cars and trucks is not easily replicated.
“That’s why we started Porsche Digital. This is just the beginning of the most fundamental transition and biggest revolution since the invention of the automobile,” said Koslowski.”
Porsche Digital GmbH is based in Ludswigsburg, Germany. It quickly opened Porsche Digital Inc in Santa Clara, California. Koslowski was formerly founder of the Automotive and Smart Mobility practice at advisory company Gartner, based in Silicon Valley. Porsche Digital is also charged with pioneering digital technology across the massive Volkswagen Group.
Ultimate mobile device
“It’s a most exciting, fascinating time as digital technology disrupts a 100 year old industry. It’s the first industry which is truly going to benefit from all of these technological developments. The car will be the ultimate mobile device and it will remain important. There’s no technology which can take over the need for a car – we can’t teleport yet like in Star Trek so we still need a physical device,” Koslowski said in a telephone interview.
Porsche is part of the Volkswagen Group, Europe’s biggest car maker in terms of sales. Other brands include Audi, the mass car market brands like VW itself, Skoda, and SEAT. There’s the Lamborghini exotic sports cars subsidiary, Bentley’s luxury limousines and some trucks and motorcycles too.
“Driving that revolution is what I call the renaissance of the automobile. Far from becoming obsolete, the car will become more important than currently. It will do more than just getting you from point A to point B. It will make sure you have continual connectivity to your digital life style,” he said.
The industry seems to be in a panic about the future, fearing where the next challenge will come from. It’s spending huge sums investing in connectivity, electrification, and autonomous cars. Some worry that UBER and its ilk will eat their lunch by reinventing the taxi. Others that car sharing will be the thing and nobody will own a car anymore. Perhaps the biggest fear is that because the young apparently aren’t into cars and don’t recognise brand power, cars of the future will simply be commodities sold in great volume with tiny profit margins.
Koslowski conceded that manufacturers are looking over their shoulders, but is confident the final direction will make sense.
“The automotive industry needs to make sure that it is investing money in the right areas. Some have a clear vision – not as a reaction to fear and disruption. Instead they see digitalization as an opportunity that offers novel ways of using new technology to create an even more compelling consumer experience.”
Won’t some of these ventures be wasteful blind alleys?
“We at Porsche are certainly looking at all of these aspects in great detail. Our strategy is to bring this to our customers. And we use the synergies that exist in this area throughout the VW group – with regard to the technological basis for instance. After all, we have a number of brands with very different profiles. An automated driving feature in the VW Sharan (minivan) would therefore be quite different to that in the Porsche Cayenne (luxury SUV). We may have a shared foundation, but with different, brand-specific configurations,” Koslowski said.
Looking at connectivity, autonomy, electrification, which one is the priority for Porsche?
“We need them all. We have the Mission E in 2019 and of course we’re looking at bringing self-driving technology into our models as well. The majority have connectivity now. We are already well on our way to use all three of these technologies. This is not just a reaction to a threat, but inspires us to make our cars more interesting, more compelling. We will still have a steering wheel (in Porsches) at the end of the day, he said.”
“This will all make the driving experience much more compelling. Our autonomous cars will have a steering wheel. Without a steering wheel it becomes a means of transport only. If you enjoy driving and are stuck in traffic, you will just push the button and get it to drive itself. We want to offer that kind of choice to our customers, it’s part of our value proposition.”
Enhancing the digital lifestyle
“A lot of auto manufacturers are reacting to these new developments and some companies are without a clear plan. At Porsche and VW we have a clear strategy. We see the whole digital disruption as a major opportunity not a major threat. We will make our cars more interesting and exciting as we enhance the digital lifestyle.”
Over next couple of years about of half of Porsches will be electrified with a mix of hybrid and electric sports cars and SUVs. The Mission E electric car will be the first battery only vehicle and should be on the market by 2019. The Mission E is a four-door sedan threatening the Tesla Model S. It is expected to have a 590 hp motor, 4-wheel drive, and acceleration from zero to 60 mph in just 3 seconds. Range is claimed as 310 miles with 15 minutes to recharge to 80%.
Is there a torpedo approaching from outside the industry ready to deal it a fatal blow?
“History shows that every time there is disruption there is potential for newcomers to place themselves into a market previously dominated by other companies. But the auto industry at the highest quality level isn’t easy at all (to replicate). Some of these newcomers from the technology industry are learning that it is difficult to build a car. I’m not worried about that. I don’t see the industry losing out. The auto industry and certainly we at Porsche see this as a significant opportunity and that’s why we formed Porsche Digital,” Koslowski said.
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