The interior of the Mercedes-Benz Vision EQS

These are exciting times for the automotive industry, as advances in in-car technology are poised to revolutionise the car as we see it today. Mercedes-Benz is among those leading the charge, and in a roundtable discussion at the recent Frankfurt Motor Show, Daimler chairman Ola Källenius has revealed some of the company’s key ideas, as well as the challenges it will face over the coming years.

The 50-year-old Swede recounted the first time the carmaker participated in the Consumer Electronics Show (CES) in Las Vegas, previously the reserve of tech companies. “The very first time we went there, I think it was in 2008, people were asking themselves, “What is a carmaker doing here?”

“When I went to the CES at the beginning of this year, it felt like there were more cars than other devices! And the tech companies used cars to demonstrate their technology.” he said, referring to the high-profile showcases from tech giants like Nvidia, which roped in carmakers for the show.

The reason for this, according to Källenius, is that the opportunities for the integration of technology into vehicles have opened up. “Way back when, the car was a mechanical island. Today, it’s the ultimate mobile device. It really is a smartphone on wheels,” he said, adding that the arrival of 5G connectivity will only hasten the development of in-car tech.

We can already hear the luddites thinking, “But I replace my smartphone every year or two, I can’t replace my car every year!” To which Källenius replied that while a car of today may have the technology of a smartphone, it has been developed in a completely different way to make it durable and, hence, last longer.

“Needless to say the engineering target of a vehicle is very much different from, let’s say, the engineering target of a smartphone or some other electrical device, so we have to design it for longevity,” he said. As for the growing level of electrification in cars these days, Källenius said that an electric motor can “more or less go on forever”, with battery deterioration over time posing more of a challenge.

“Maybe there will be, at some point, some kind of backwards compatibility or new batteries in our vehicles,” he said. “It’s still early days. But we do design our vehicles and the electrical parts for longevity.”

Another concern users have these days is data privacy. Companies like Facebook and Google have gotten into hot soup recently over their alleged sharing of personal information to third parties for monetary gain, and while Källenius didn’t rule out Daimler potentially benefitting from the use of their own owners’ data, he said that at the end of the day, the company must serve the customer first.

To do this, the company is being transparent by allowing users to opt in and out of individual services as they see fit. “Most apps have one very long terms and conditions that most people don’t read and then they click, and they don’t know what they did,” he said. “With our Mercedes me services, we allow you to choose what you want, at the individual service level.”

Källenius adds that while Daimler could still make money through your data, it will only do so if it provides a meaningful benefit to you. “If we can offer you a use case that you want and that is beneficial to you, and at the same time it could be a business case for us, that’s what we’re pursuing.”

Mercedes is also in the midst of digitalising its sales and marketing processes in order to improve the buying experience and reduce costs. “You will still have offline [sales], but you will have an even more seamless online-to-offline experience.” he said.

Källenius added that the company is trialling new ways for buyers to purchase their cars, following in the footsteps of Tesla’s strategy of selling directly to consumers. “Actually, in my home country in Sweden, we’re experimenting with a direct sales model, with fixed pricing, where the customer actually buys directly from the manufacturer, and the dealer acts as an agent.

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