Auto manufacturers look to tech to change to service-led proposition
Audi and Ford gear up to switch to offer traffic and entertainment services in-car.
Leading brands from the automotive sector are seeking to reposition themselves as service-led brands by pairing with third parties such as app developers, and traditional telecoms providers to try and fend-off competition from the traditional lower tiers of the market, as well as potential encroachment from Silicon Valley giants.
Leading car manufacturers including Audi, Ford, Mercedes-Benz and Nissan have all unveiled vehicles and services leveraging online technologies to position themselves as ‘connected lifestyle’ brands at this week’s Frankfurt Motor Show in Germany.
Earlier this week, Nissan became the first car manufacturer to unveil a smartwatch, designed specifically for drivers of its Nismo range that will provide users with biometric data, such as their registered heartbeat, as well as monitor the efficiency of their fuel consumption (see video). This data is then connected to a driver’s smartphone using bluetooth technology while they are driving their vehicles and can be later analysed to assess performance.
In a statement Gareth Dunsmoure, Nissan Europe’s general communications manager, says the launch of the Nismo smartwatch was geared towards making its “Nismo brand more accessible”.
“On track, Nissan uses the latest biometric training technologies to improve the performance of our Nissan Nismo Athletes and it is this technology we want to bring to our fans to enhance their driving experience and Nismo ownership,” he adds.
“As Nismo is the performance arm of Nissan, we wanted a way of integrating Nismo’s heritage in racing into this futuristic innovation.”
Similarly, Ford’s nascent SYNC AppLink service lets mobile users access compatible apps they have downloaded to their phones via a voice-activated control mechanism while in their vehicles.
The manufacturer first unveiled the service, which is initially only compatible with Android and iOS phones, earlier this year at the Consumer Electronics Show (CES) in Las Vegas, with music-streaming Spotify as its headline partner, and is encouraging app developers to port their portfolio of apps to the service using a software development kit (SDK).
Meanwhile Ford unveiled a host of new additions to the service at the IFA consumer electronics trade show in Germany last week, including a navigational service partnership with TomTom, plus a room-booking service with Hotels.com.
The service has yet to go live in the UK, but Ford will introduce it to the UK along with next year’s launch of the Ford EcoSport sports utility vehicle (SUV) in the early part of the new year.
The generic shift towards premium automotive brands’ repositioning from traditional manufacturer to include digital services as a key selling point has been prompted by the rapid advances of brands formerly considered as lower tier brands, such as ex-Eastern block manufacturers like Skoda, according to Tim Kiek, editor of the Institute of the Motor Industry’s Motor Industry Magazine.
“The market is hugely competitive with new car sales over the last 10 years largely in decline… There’s been a lot of homogenisation with brands like Skoda catching up with traditional leading car marques… and they [brands like Audi and Ford] are looking to provide something extra such as value added services,” he adds.
For instance, in anticipation of O2 and Vodafone joining EE in the roll out of 4G mobile networks, Audi last month also unveiled plans include optional 4G connectivity in its A3 S3 Sportback model, which will let drivers with suitable connection plans to stream in-car entertainment to their vehicle, as well as access traffic and weather updates while at the wheel.
Speaking about plans to articulate this shift in the market positioning, an Audi spokesman told Marketing Week: “The 4G upgrade will significantly enhance the way our optional Audi connect services are delivered by dramatically accelerating click-through and download functionality. We will of course make reference to this in our pricing and specification material, but our key communication focus will continue to be the Audi connect services themselves.”
Although, traditional car manufacturers are also facing potential competition from Silicon Valley, with Google’s interests in ‘driverless cars’ considered a logical long-term goal of its existing mapping services. The online services giant added further credence to this theory last month when it led a $258m round of funding in Uber, a mobile app that helps users find cars available for hire.
However, the convergence of the auto-trade and online service has also provided the opportunity for partnerships, providing Nokia, which last week agreed to sell its handset business to Microsoft, with an opening salvo for its future outside of the handset business with its online mapping unit Here.
Earlier this week Nokia used the Frankfurt Motor Show to announce a key tie-up between its digital mapping arm Here and Mercedes-Benz to ultimately explore the potential launch of driverless cars – or “autonomous vehicles” – as well as Magenti Marelli and Continental Corporation.
Here said in a statement: “While autonomous vehicles may not hit the streets commercially for several years, automakers and tech innovators alike must already think about the infrastructure and technological requirements needed to support this technology. Mercedes-Benz and Here will continue to explore this area together.”