BMW Gives Up On Drivers

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GENEVA (Reuters) — After a century building what it calls the “ultimate driving machine,” BMW Group is preparing for a world in which its customers will be mere passengers, and the cars will do the driving themselves.

Days before BMW’s 100th birthday, Klaus Froehlich, its board member for research and development, described plans for a completely overhauled company, where half the r&d staff will be computer programmers, competing with the likes of Google parent Alphabet to build the brains for self-driving cars.

“For me it is a core competence to have the most intelligent car,” Froehlich told Reuters in an interview at the Geneva auto show.

As a high-tech world opens new business opportunities, BMW sees its competitors as including firms like internet taxi service Uber and sales website Truecar, which Froehlich described as “new intermediaries.”

“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 for them,” Froehlich said.

BMW will have to ramp up quickly, striking deals with a new network of suppliers, many from outside the traditional automotive industry.

“We have some catching up to do in the area of machine learning and artificial intelligence,” Froehlich said.

Today, software engineers make up just 20 percent of the 30,000 employees, contractors and supplier staff that work on research and development for BMW.

“If I need to get to a ratio of 50:50 within five years, I need to get manpower equivalent to another 15,000 to 20,000 people from partnerships with suppliers and elsewhere,” Froehlich said, adding that German schools are not producing enough tech engineers for BMW to hire them all in house.

As software becomes as important as hardware, another cultural shift could see BMW free up resources by licensing out technology produced by its own engineers, such as drivetrains for electric and hybrid vehicles.

“Going forward we will sell electric drivetrains,” Froehlich said. “We see many smaller manufacturers who cannot afford to develop a plug-in hybrid.”

Bragging rights

Germany’s premium auto makers are at the center of the country’s global reputation for meticulous engineering. Chancellor Angela Merkel will attend BMW’s birthday bash at its Munich headquarters on Monday.

But with the expected shift in focus from a car’s body to its brains, the risk is that the expertise will accumulate in Silicon Valley or in China, rather than Germany’s carmaking regions of Bavaria and Baden-Wuerttemburg.

“In the auto industry the battle will be not for horsepower but bragging rights will be ‘my car is more autonomous than your car’,” said Manuela Papadopol, director, global marketing automotive for Elektrobit, a software company now owned by Continental.

BMW, Mercedes-Benz and Audi are each making an effort to build a hub for automotive software and services. They clubbed together to buy digital map maker HERE from Nokia last year to create a neutral platform where smart cars can share data on road and traffic conditions.

BMW’s own recent hiring included a 200-strong digital innovation team in Chicago, most of whom had worked for Nokia, the Finnish mobile phone pioneer.

Among the areas Froehlich identified where BMW will still need partners is in cloud computing, the technology of storing data and software remotely and accessing it over the internet. Data gathered from a car’s onboard sensors will be combined with remote information, for example about weather and traffic, using next generation mobile networks, also known as 5G.

The ultimate aim would be to build as much expertise in-house as possible, although there could be mutual benefits from working with new outside suppliers.

“The thinking here is: they too have weaknesses and there may be some win win situations,” Froehlich said of potential new suppliers. “Nonetheless I need to build our own in-house competence in the next 5 to 6 years.”

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2 COMMENTS

  1. BMW moved from the Ultimate Driving Machine to the Ultimate Driving Simulator in the 2000s as they tried to keep pace with Mercedes on the luxury front while maintaining some semblance of sporty driving to separate it from the more sedate Mercs. This has resulted in an electronic warfare game of unprecedented proportion that continues to this day. Every gadget and gizmo you can think of now has to be present, and while this makes for a very comfy interior, it also serves up many more distractions from actual driving.

    This also has major negatives in other areas, particularly weight. BMWs, as have most newer cars, have become real porkers. Much of this has to do with electronic safety equipment, but much more with the additional conveniences offered.

    To counter this, they have had to make sacrifices. No more alternators, for one, in many models such as the X5. They’re trying to save weight and parasitic drag on the engine by using brake regeneration to charge the battery instead of a real alternator. Unfortunately, it’s not working and there’s an ongoing recall on all X5 models, presumably for the life of the vehicle, that will require regular replacement of the lead-acid battery since it will be killed by the progressive lack of full recharge cycles. Talks about an environmental mistake. All to save perhaps 0.25 mpg at best. Similarly, they have switched from hydraulic to electric power steering to save weight and reduce power drag on the engine. This has the added benefit of making systems more complex, less reliable, and harder to repair as well. It’s a lose-lose for everyone.

    The new 7-series has self-driving technology built-in, much like the new Mercedes S-class does (released about a year ago). Undoubtedly impressive technology, it’s one more step towards the self-driving car. Already with electronic power steering, electronic braking, and electronic throttle we’re not so much driving a new BMW as suggesting where we would like it to go. Soon we will not even need to have a steering wheel or pedals.

    All of this will be played off as added safety and efficiency. No more human error. No more wasteful speeding. Cars can stack, bumper-to-bumper, and gain efficiencies of drafting. New “jobs” will be created as the government mandates that all roadways have embedded sensors and markers that can be read by the self-driving systems in next gen cars. And the NSA will be able to track every single car and occupant, presumably by the tattooed barcode on their forearms or back of the neck.

    Police will be able to shut down any vehicle they wish, on a whim, and fabricate a new range of never before considered “offenses” in order to shoot our dogs or rape women or murder under the pretense of safety. No crime necessary.

    Now might be a good time to consider buying something you can keep running for the long haul since these systems will soon be as mandatory as a backup camera or air bags.

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