* Software seen as tool for expanding functions of cars
* Also a way of upgrading vehicles at lower cost
* Software brings "new era" in carmaking, Mercedes says
By Edward Taylor and Ilona Wissenbach
STUTTGART, Jan 10 The new Mercedes-Benz C-Class
has cameras that can read road signs and sensors to judge
distance to the car in front, but is not yet able to make full
use of the hardware.
What may sound like a shortcoming is in fact a deliberate
strategy by manufacturer Daimler, and a sign of
things to come for the global luxury car industry.
Owners of the upscale Mercedes compact will be able to add
new functions such as predictive cruise control - which lets the
car drive itself in some situations - by updating the car's
operating system when the technology becomes available.
Taking their cue from gadget makers such as Apple,
Daimler and rivals are developing cars to receive software
updates that include new tools or even improve fuel efficiency,
much in the way an iPad gets new capabilities with each
successive operating system.
That is a big change - and a potential saving - for an
industry used to spending heavily to revamp ageing models.
"We are entering a new era," Mercedes-Benz development chief
Thomas Weber told Reuters. "Until now, cars retained the
properties they had on the day they were purchased."
Daimler's push shows software is emerging as a new
battleground among carmakers seeking to use technology to make
cars safer, more entertaining, and better at solving problems
such as locating a parking space or the nearest hospital.
While the aircraft industry has long relied on computers to
fly planes, cars have been held back by insufficient broadband
telecoms infrastructure, the price of computing power and
regulatory limits to automation.
But software is now set to become as important to carmakers
as traditional engineering, according to Thilo Koslowski, an
analyst with IT and research group Gartner Inc.
"What we are witnessing is a change that will impact the
industry for decades to come," said Koslowski, who used to work
at German luxury carmaker Audi. "The next venue of competitive
differentiation will come from software."
While some drivers remain sceptical about surrendering
control, many are ready to embrace functions which let them
access information, make calls, e-mail or listen to music in
traffic, according to auto supplier Continental, which
interviewed 4,000 car owners in Germany, Japan, U.S. and China.
"What a customer knows from his smartphone, he will also
expect from his car," Mercedes' Weber said in an interview.
In anticipation of rapidly changing customer tastes in
so-called infotainment, Audi introduced a system which allows
customers to swap hardware components when they become outdated.
Gartner's Koslowski believes the promise of software updates
will become a major selling point for carmakers. "The average
consumer doesn't really detect advancements in mechanical
engineering. But they understand an upgrade in infotainment," he
Software is also starting to help drivers in a myriad of
other ways. For example, it allows drivers of BMW's i3
electric vehicle to gauge whether a battery has sufficient
charge to reach a destination. In some cities, the car can even
help to look up the timetable of alternative transport methods
such as trains and buses, and find a nearby charging station.
Increasingly, system updates can alter a car's actual
driving performance. An upgrade to Tesla's electric
Model S sedan, for instance, commanded the suspension to
increase ground clearance at highway speeds.
Software can also modify engine regimes or shut down some
cylinders to adjust the balance between efficiency and power in
real time, reducing fuel consumption.
Mercedes-Benz, meanwhile, is working to offer predictive
cruise control in its cars and trucks, a tool to adapt a
vehicle's engine revs and gear to suit the gradient of a slope.
Currently maps used in satellite navigation systems are not
able to gauge the gradient of a particular road, a feature that
will emerge as maps evolve, enabling Daimler to develop software
for more cost-efficient driving, Weber said.
"If the car is equipped with the right hardware, you can add
functions at a later stage," he said ahead of next week's
Detroit auto show which will showcase the new C-Class.
The promise of advancements in software has led
Mercedes-Benz to overhaul its research and development
operations in California. It plans to double resources at a new
headquarters in Sunnyvale, where around 100 staff work, although
it declined to put a timeframe or figure on the investment.
Ian Robertson, BMW board member in charge of sales, believes
software can be used by automakers to expand into completely new
areas of business that go beyond driving.
BMW has invested in ParkatmyHouse.com, an online parking
marketplace which brings together owners of private parking
spaces and people in search of parking. The service has more
than 400,000 customers.
Upgrades to software are not always popular, however, as
Microsoft found with its Windows 8 operating system.
Increasing complexity in vehicles can also bring problems.
Renault blamed glitches with the R-Link
touch-screen entertainment and navigation panel for delays to
its Zoe electric car, while Ford tumbled to the bottom end
of U.S. vehicle reliability rankings because of flaws in its
rival MyFord Touch system.
Few doubt, though, that the growing power and ambition of
on-board software can only accelerate in the next generation of
Manufacturers will "switch to an architecture that controls
vehicle function through software" to reduce weight and
production costs, Forrester Research said in a recent report.
"New features and updates (will) come principally from
software rather than hardware."