Munich, Düsseldorf Get in, log in to Android or iOS and drive off: This is the absolute horror of the German auto industry. Volkswagen, Daimler and BMW definitely do not want to be “brain amputated” by Google, Apple or Chinese tech companies like Tencent in the near or distant future, as ex-Mercedes front man Dieter Zetsche once pointedly put it.
In order to permanently retain sovereignty over the data in one’s own vehicles, BMW boss Oliver Zipse therefore promoted broad cooperation between established manufacturers and suppliers at the Handelsblatt Auto Summit. “This is a great opportunity for European industry,” said the 57-year-old. From his point of view, there will be no getting around to making more pacts. “This industry lives from cooperation in the digital area,” emphasized Zipse.
Specifically, the manager advocates an alliance of the major German car manufacturers for future operating systems. At its core, Zipse wants to work together on the higher-level architecture, i.e. on all those parts of the software that are not directly visible to customers, but run centrally in all vehicles.
“We can very well imagine a cooperation to establish common interfaces with our suppliers,” explained Zipse. Bosch, Continental or ZF would then not have to program their components separately for each manufacturer. And car manufacturers could still differentiate themselves significantly from one another via individual domains such as infotainment or assistance systems.
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The courted responded in a friendly, but in detail quite negative, to Zipse’s suggestion. Volkswagen boss Herbert Diess declared that he was basically “open” to working with his old employer. The following “but” has it all. “We first have to develop the platform for ourselves, that’s complex enough.”
The manager advocates an alliance between the major German automakers for future operating systems.
(Photo: Getty Images)
First of all, it is primarily a matter of bringing all brands of the mammoth group from Wolfsburg – from VW to Audi to Porsche – into line with the development of the in-house operating system VW.OS, explained Diess. “If we have everything sorted internally, then we will certainly be ready to offer the third party afterwards.” Obviously, obtaining a license from VW is by no means what BMW boss Zipse should understand by cooperation.
That leaves the old rival Daimler. The Bavarians have had a purchasing partnership with the Swabians for years. In addition, the corporations merged their collected mobility apps a few years ago. Zipse and Daimler boss Ola Källenius are very good with each other personally. Premium and Premium – they speak the same language. The prerequisites for a pact for the operating system are therefore better here than for the Volkswagen volumetric goliath.
Digital services are becoming a decisive factor in purchasing
“It is conceivable,” said Daimler front man Källenius, that a collaboration on software with BMW is of course already possible. However, everyone should know that the operating system is ultimately “the brain and central nervous system” of the car. It is therefore “extremely important” to master this system in its entirety. “If you were to combine that one-on-one between two car manufacturers, you would in principle have the same digital soul,” says Källenius. “That can work, but you have to coordinate a lot. And you don’t want to slow down. ”
In short: “We cannot wait. We have to maintain the high pace of development so that we can meet our own deadlines, ”said Källenius, also rejecting Zipse. The MB.OS operating system from the Mercedes manufacturer is to be used in the first vehicles of the brand with the star from 2024.
But Källenius left a back door open for further discussions. The Swede advocated taking a closer look at the individual parts of the system instead of bundling with the higher-level software platform. “At this level, you should definitely use industry standards,” explained the Mercedes front man. So individual functionalities. Or to put it another way: German small and small instead of a large industrial alliance.
“This development is a bit tragic,” states Stefan Bratzel. The director of the Center of Automotive Management (CAM) would have expressly welcomed a cooperation between BMW, Daimler and Volkswagen on the operating system. Unfortunately, this train “left” years ago, explained Bratzel. Now there is hardly any point in working together; the voting loops lasted too long. Especially since the attackers are getting closer.
“The Glasgow Declaration does not conflict with what we have already said,” says Källenius in an interview with Handelsblatt editor-in-chief Sebastian Matthes.
(Photo: Handelsblatt, Ina Karabasz)
It is true that no software giant – neither from Silicon Valley nor from the Far East – currently offers a holistic operating system for vehicles. But above all Google is embedding its “Android Automotive OS” infotainment system with services such as Google Maps and a clever voice assistant in more and more new cars.
“The car manufacturers have to decide: A complex and lengthy in-house development on the one hand carries the risk of falling behind the competition. The integration of an existing solution from the large tech companies on the other hand opens the data interface for external parties, ”explained Alber Waas, automotive expert at the Boston Consulting Group. Mass manufacturers such as General Motors, Ford, Stellantis and Volvo swear by the latter. After all, Google promises you a workable solution for relatively little effort.
With the economies of scale that arise through these major customers, the search engine company’s desire to expand should also increase. It is only a matter of time before Google occupies more domains in the car. This is a dangerous development for the German auto industry, as the preferences of its customers are changing radically. Connectivity is increasingly becoming a kind of knock-out criterion when purchasing a vehicle.
More and more car buyers are ready to switch
According to a study by management consultancy Oliver Wyman, up to 40 percent of vehicle owners in Europe and 80 percent in China are already willing to change their preferred make of car if they get better digital services from another provider. And the number of those willing to change should increase sharply in the future. Younger customers in particular have long been more interested in bytes than in PS. Loyalty to brands like Mercedes or BMW could quickly wane.
On the other hand, the development away from an electromechanical-hydraulic product towards rolling smartphones with XXL screens is also opening up new business opportunities for the car companies. BMW boss Oliver Zipse puts the sales potential that he sees with digital features and services for his group in the future at up to five billion euros per year from 2030.
The operating system is of course the basis for all digital sales offers. “If necessary, we can do this alone, of course,” explained Zipse. Of course, he would prefer to share the high development costs with others.
Daimler boss Källenius, whose company is likely to invest up to five billion euros in the development of MB.OS in the coming years, says, on the other hand, that nobody should be deterred from such high expenditures. The existing approach of buying dozens of control elements from individual suppliers with the associated software is in any case “not exactly cheap”. He was sometimes surprised at how small the cost difference between the old and the new philosophy was, explained Källenius. In the end, investing in your own operating system could “even be the more investment-friendly alternative”.
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