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BMW share their strategy for capitalising on the future
of connected cars
BMW’s Strategy for Building the Best
Connected Car
As connected and autonomous vehicles come
to fruition how are automotive companies
reacting to a new business model and market
dynamic?
Digitalisation has had an enormous impact on
automotive companies. Autonomous vehicles
are the biggest disruptions because of the
cultural shift it has created for Original
Equipment Manufacturers (OEMs), who are
reacting to them in different ways in order to
best implement the different requirements that
are needed. We, as an industry, are different
today than we were in the past and in terms of
what the future holds; we will have to continue
to react, adapt and innovate if we are to
capitalise on connected cars and autonomous
vehicles.
In the past, cars were sold and occasionally
required maintenance. With connected and
autonomous vehicles, automotive companies
like BMW will be interacting with the
customers more and more, how do you
foresee this shift changing the industry?
The possibility pf building Connected Cars
brings with it great opportunity but also great
obligations. OEMs need to live up to the
expectations of the customer in a way and time
frame that they are not typically used to.
Currently, OEMs are dealing with the customer
in a very direct manner and in order to keep the
car fresh, innovation cycles are much shorter in
the digital world.
I predict we will see more automotive
companies updating the experience in the car
and making it much more personal to the
customer. Our cars are sold through our BMW
dealerships so we do not own the customer, in
the internet world there is always a possibility
we can alienate the customer more from the
OEM, so we focus on customer feedback as we
feel that is best for understanding our
consumers and building direct relationships.
“There are endless ways to be creative”
Building new direct customer relationships are
key across all industries right now. How are
BMW developing a loyal consumer base that
will engage with connected cars and
autonomous vehicles?
We operate through multiple touch points and
ensure that customer interactions with our
dealers across those points are optimised to
their highest potential. Our touch points are:
Dieter May is the Senior Vice President Digital Business Models at BMW
Group. Dieter May is a global leader with over 20 years experience in high
tech industries, spanning mobile products, large-scale cloud based
consumer services and semiconductor technology. Dieter has a track
record in scaling, transforming and re-positioning global businesses. He is
a well-rounded leader with a focus on strategy in action and proven
execution capabilities combined with excellent leadership skills in multi-
cultural environments.
Automotive IQ interviews Dieter to find out where the road to Connected
Cars leads for BMW:
digital space, digital presence, our app and our
configurators. It is important for us to be able to
migrate the consumer in a very transparent and
fluid way through all the various touch points
with the brand. Our brand is the most effective
way we can develop a loyal consumer base that
engages with us. Our brand experience in
Munich is one of a kind, many customers travel
here just to experience it, we believe we
provide great consumer benefits and that is
why people stay with us for a lifetime.
Can you tell me about one strategy BMW has
implemented to engage their consumer base?
At BMW we have our connected drive tour
which is a distribution channel in the car where
you can buy apps and update your experiences.
This has created huge potential for growth
because it is a direct point of contact situated in
the car. Furthermore, this point of contact is
relevant, contextual and personal with endless
opportunities to innovate and help us continue
to engage the consumer.
“We will see more automotive companies
updating the experience in the car and
making it much more personal to the
customer”
As the lines between the vehicle and smart
phone converge, the automotive industry must
keep the Connected Car fresh for its customers
but maintain focused on providing a great
customer experience. How are BMW ensuring
that customer-centricity is not lost along the
way?
Product wise and from a structural and
organisational perspective, we need to keep our
eye on the customer. It is hard for car
companies to be completely customer-centric
because the relationship is not directly with the
customer however, customers expect
excellence from the BMW brand and that is
what we focus on delivering.
Software has never played much of a
component in the vehicle before, and suddenly
it is a key element to the connected car. How
are OEM's optimising their software for
safety?
There are different aspects OEMs need to
optimise in relation to software, most
importantly the cloud and back-end software
need to be safe in the car. Over the air
connectivity also needs to be safe. There are
two ways to achieve this optimisation: firstly, by
in-built privacy and safety through the design
which is intrinsically part of building the vehicle
and secondly, focusing on the security
measures and tests a car needs to pass in order
to make sure it is safe.
Privacy and safety are totally different once a
car is connected to multiple things. A car used
to be self contained and now we have all these
links to the external world and that can cause
trouble if you are not managing it well because
they could all create potential problems. This
new level of safety is now a requirement for
OEMs.
With so many Over the Top services (OTTs)
being promised in Connected Cars, how are
BMW planning to provide a product that is in
keeping with the calibre of all the other car
models, whilst still making a vehicle that will
be different from competitors?
We have been presented with a unique
opportunity for better and seamless integration
where we can apply context to the cars and
learn from the customer to make the
experience more intuitive and personal.
Differentiation comes from how you integrate
the software into the car, for instance having a
smart phone optimised in the car ready to use
through different screen styles and formats.
With all the regulation and the limited
software choice, how creative can BMW be in
this space?
There are endless ways to be creative, by using
our car information to create new business
models and new digital experiences BMW can
continue to set it-self apart from the
competitors.
“Privacy and safety are totally different
once a car is connected to multiple things”
How important is it for big car manufacturers
like yourself to be at the forefront of
connected cars?
Market studies validate that digital experience
and connectivity in the car will become more
imperative for premium cars as the experience
and expectations of the customer keeps going
up. If the younger demographic buy our cars
they need to consume media in the car like they
are used to out of the car.
Recent McKenzie studies state that 20% of
customers would switch their brand if the
digital experience is not on par with others. This
concern is popping up and we need to notice
the trend and make sure that BMW is at the
forefront of providing what it is our customers
want and expect.
What do you believe are still the two biggest
concerns when moving towards connected and
autonomous vehicles?
Security and privacy, OEMs needs to make sure
both are handled well.
How do you foresee the car industry looking 10
- 15 years from now?
In the future there will be new mobility
concepts where we will see customers asking
why they need to own one car and not have
access to several BMW models instead. A
consumer wanting to easily switch between
cars and drive new cars immediately is likely to
impact the whole industry.
This article was created in the lead up to the Connected Cars Europe Summit, taking place on 28-30
September 2015 in London. Discover how to prepare yourself for this big shift in the automotive
industry and how to overcome the potential disruption the Connected Car will bring.
For more information, please download the brochure.
Call +44 (0) 20 7036 1300
Email [email protected]
