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BMW Forsees Bright Future In Driverless Cars

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On: Thu, Mar 10, 2016 at 8:46AM | By: Carl Malek

BMW Forsees Bright Future In Driverless Cars

Following nearly a century of designing "the ultimate driving machine" for its customers, BMW is preparing for a future where driverless cars will become a bigger part of the automotive industry, according to a new report that was released by Reuters.

Published only days before the company celebrates its 100th birthday, the report was penned by BMW's head of research and development, Klaus Froehlich. Froehlich described his vision of a future where the company will be completely overhauled, with half of the R&D team consisting of computer programmers. These programmers would compete head-to-head with rivals from Apple and Alphabet (Google's parent company) to be the first to build the digital brains behind self-driving cars a noticeable change from the current focus on the body and mechanical hardware of a vehicle.

"For me it is a core competence to have the most intelligent car," Froehlich statedduring an interview at the 2016 Geneva Motor Show. Froehlich's comments could point to a change at BMW in terms of who it sees as its competitors; firms such as Uber and Lyft, as well as sales website Truecar would be added to its traditional list of rivals and competitors. The way Froelich sees it, "Our task is to preserve our business model without surrendering it to an internet player. Otherwise we will end up as the Foxconn for a company like Apple, delivering only the metal bodies to them."

BMW would have to accelerate its current efforts towards finding new suppliers if it wants this future to come to fruition. Many of these new suppliers would be outside the automotive industry; BMW will have to rapidly evolve and adapt to cater to these suppliers so it can develop and nurture a new network that can help it win big in the long run.

"We have some catching up to do in the area of machine learning and artificial intelligence," Froehlich said. Along with the new push to gain new suppliers, a second cultural shift could occur which would see BMW possibly license the technology produced by its own engineers, including drivetrain technologies for electric and hybrid vehicles as well as battery technology for the forementioned vehicles. This would help free resources for BMW, while serving as a compelling piece of bargaining leverage in negotiations with new suppliers and perhaps even smaller manufacturers.

"Going forward we will sell electric drivetrains. ... We see many smaller manufacturers who cannot afford to develop a plug-in hybrid." BMW's recent change in tone could also be driven by a more basic element, pride. In Germany, BMW, Volkswagen, and other car companies form the strong backbone that has helped foster the country's reputation for meticulous engineering and world-class build quality. However, with the shift in focus from the body of the car to the brains that are nestled within, there is a fear that expertise in this field would accumulate not only in Silicon Valley, it would also be found in China, versus the traditional German locations in Bavaria, as well as Wolfsburg.

Manuela Papadopol, director of global marketing automotive for Elektrobit (a subsidiary of Continental), elaborated on this sense of pride in a separate statement stating, "In the auto industry the battle will not be for horsepower, but bragging rights will be 'my car is more autonomous than your car.' " In a way this is already happening, albeit in cautious baby steps, with all three German automakers pursuing ambitious efforts at trying to outdo one another in driverless cars. The stakes for all three companies are huge since driverless cars could allow them to gain sales from a renewed group of older buyers who may want a vehicle that can help them safely maintain their independence, without the challenges that come from a traditional automobile. This would especially be beneficial in the U.S. where a strong pool of aging baby boomers may help light the spark in sales of driverless cars, and also help accelerate the levels of innovation and development of driverless vehicles.



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