2/24/2016, Chicago Tribune -- Carmakers are becoming a familiar sight at tech shows, where they're rolling out new models to woo a generation of consumers who question the need for a car that only gets them from A to B.
At this week's Mobile World Congress in Barcelona, Ford unveiled a new vehicle for Europe as well as in-cockpit technology, Volvo is showing off a keyless car and Mercedes-Benz Formula 1 driver Lewis Hamilton will appear on a panel with the president of chipmaker Qualcomm.
Eager to win over millennials who may care more about the latest Apple iPhone than a redesigned Mustang, automakers are trying to become more tech-savvy and shed their image as 20th century metal benders. The pivot toward the younger set comes amid a slowdown in China, competition from Tesla Motors -- which sends automatic software updates to the car's command center -- and a boom in ride-sharing services such as Uber that have left car companies anxious about growth and eager to try out a new crop of digital products and services.
"Carmakers have a very narrow window of opportunity to win over Generation Y," said Richard Viereckl, an analyst at PwC in Frankfurt who co-authored a 2015 study on connected cars. "They're at these technology shows to portray their brands as hip, and with mounting competition from the likes of Apple, Panasonic and Sony, they're fighting to keep the attention of and access to their customers."
By 2022, 345 million autos worldwide will be connected to the Internet, nearly four times more than last year, according to IHS Automotive. In six years, 98 percent of the cars sold globally will be connected, up from 30 percent last year, the consulting firm said. The trend is driven by customer demand: Three in four consumers said they consider connected car services an important feature in their next vehicle purchase, AT&T and Ericsson said in a report in October.
The risk for carmakers is that Apple, Google and Microsoft will conquer the connected-car business with operating systems and apps that people are familiar with. Google and Apple already offer in-car infotainment systems with Apple CarPlay and Android Auto, and Google is at the forefront of developing self-driving cars.
"Google and Apple have a good chance as anyone at grabbing the car ecosystem," said Kevin Curran, a computer science professor at Ulster University in Londonderry, Northern Ireland. "Cars today are computers with wheels, and tech companies know that field all too well."
To fend off the threat, carmakers are set to make "big decisions" over the next 24 months, striking cooperation pacts and increasing spending on research and development as well as M&A to get ahead, said Thilo Koslowski, who heads the auto practice at researcher Gartner Inc. Those who don't are at risk of being left behind, he said.
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