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Ich bin ein Connectedcar

by Roger Lanctot | Mar 19, 2014

In what may have been the first CeBIT keynote by an automotive executive but hopefully not the last, Volkswagen’s Chairman of the Board of Management Prof. Dr. Martin Winterkorn spoke last week of the merger of the automobile and the computer industry and raised the specter of the connected car becoming a “Datenkrake.” A literal translation is “data octopus” though VW communications rendered it as “data monster.”

The comment speaks to Volkswagen’s and the industry’s ongoing ambivalence toward vehicle connectivity and the inability to articulate the positive aspects of connectivity without highlighting the potential downside. Winterkorn pointed to the need to protect customers from abuse of their data:

“The car must not become a data monster,” he said. “We already protect our customers against a wide variety of risks such as aquaplaning, micro-sleep and long, time-consuming congestion. With the same attention to our responsibilities, we intend to protect our customers against the abuse of their data.

“I clearly say yes to Big Data, yes to greater security and convenience, but no to paternalism and Big Brother. At this point, the entire industry is called upon. We need a voluntary commitment by the automobile industry. The Volkswagen Group is ready to play its part.”

The first-time automotive keynote was part of a CeBIT presented under the made-up concept of “datability” with its obvious reference to Big Data. Winterkorn spoke positively of the broad societal benefits to be derived from vehicle connectivity but his Datenkrake comment hit a sour chord for international visitors though it may have resonated positively with the local German audience.

The comment highlighted two critical issues facing the auto industry generally and the German auto industry in particular. The first issue is the need for the automotive industry to embrace vehicle connectivity of all types. In this context, referring to vehicle connectivity as "Big Brother," "Datenkrake" or "paternalistic" represents precisely the wrong message – even in the context of conveying things to be avoided.

The automotive industry globally is clearly on a path to universal vehicle connectivity in a variety of flavors – via embedded modems, connected smartphones, V2X technology, and satellites - so it is best to treat it as a given and a positive rather than something to be feared or dreaded. For the German auto industry in particular, though, any negative impressions of vehicle connectivity must be overcome and dark references avoided.

Winterkorn managed to avoid Ford’s Jim Farley’s CES gaff of asserting that Ford was already tracking its customers – a claim which was actually incorrect.  But to focus on the downside or even mention potential negative outcomes from vehicle connectivity is to miss the point of connectivity entirely.

Embedded connectivity is being aggressively pursued by governing bodies such as the European Union and even the United Nations.  (The United Nations Economic Commission for Europe has been pursuing a global eCall initiative for the past year.)  Governments want cars connected for the benefit of the driver – to ensure the notification of emergency responders in the event of an accident as well as, ultimately, to entirely avoid collisions.

EV maker Tesla has shown, in the U.S., that a car’s safety can be enhanced by an over-the-air software update.  With the growing amount of software in cars and the rising tide of recent vehicle recalls, there is no doubt that over-the-air software updates are rapidly becoming a required capability on new cars.

With Toyota’s just-announced $1.2B settlement with the U.S. Justice Department over unintended acceleration and GM’s 1.6M vehicle recall now under scrutiny, the importance of vehicle connectivity for anticipating and/or remotely diagnosing vehicle failures has been elevated as a consumer value proposition. In such circumstances connectivity and data communication is the customer’s friend … not a monster. Is it paternalistic to notify a driver – via conditioned-based maintenance applications - that his or her brakes are in danger of failing?

It is time to put the Datenkrake back in the closet and embrace the warm cuddly customer relationship altering power of vehicle connectivity. Are there security concerns? Yes. And they must be addressed. Policies must be defined and published for what data is extracted; how it is secured, managed and shared; for how long; and with the customer’s consent, access and control.

Privacy, too, must be factored in and liability better defined – especially in a world increasingly populated with semi-autonomous cars. But the need for privacy must be balanced by the right of the State to access data that may reveal the circumstances contributing to vehicle collisions with people, property and other vehicles.

The right to privacy ends where harm has been or might be done to another. In this way the privacy governing the use of cars is different from the privacy conferred on the user of a mobile phone or desktop computer. Consumers may not want their poor driving behavior used against them by car insurers, much as consumers with pre-existing medical conditions don't want an unfortunate medial history used against them by health or life insurers.  But those concerns fall away when determining liability.

The actual challenge for Volkswagen and all car makers is to create connected car value propositions that are sufficiently, no, overwhelmingly attractive so that opting out is never considered. In fact, Volkswagen would do well to take a page from BMW’s strategy in North America and build a free layer of connected services into every car to ensure safe driving, up to date on-board software, and remote diagnostics for condition-based maintenance - at least!  (In fact, Qoros Auto, the newest car maker in the garage, is offering lifetime connectivity on its new hatchback, launched at the Geneva Auto Show.)

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