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Wednesday
May072014

The Connected Car

An informative interview that provides insight on the connected car...

The fast-growing German luxury automaker has added a Silicon Valley ethos into its auto development, aiming to make customers even happier with its cars.

Audi R8 coupe

Hudi says electronics is the motivating force for innovation in modern automobiles, from the engine to the gearbox to the driver experience. So Audi works closely with semiconductor and software companies to bring research ideas into its cars. But getting into position to create a connected car, the car as social medium, took a good deal of planning and time and a major restructuring of how the premium car manufacturer works with its supply chain, mixing traditional automotive suppliers with technology companies. In an interview with MIT Sloan Management Review contributing editor Michael Fitzgerald, Hudi described the transition Audi is making and his perspective on the future of the auto industry.

To what extent does Audi think about the car as a social medium?

The car and social media belong together. Not long ago the car was the least networked part of our life. We started to change this and we offer interaction now, well integrated in our user human-machine interface (HMI) concept into the car. By the end of this decade, I’m convinced that every premium car around the world will be 100% networked. It will be part of the [Internet] and offer customers the functionality they want.

Audi potentially will have access to totally new kinds of customer data. Is that considered important to Audi?

We do not gather data from the device. The contract is completely customer-focused. It is a classic Android account with a Gmail account.

Did you talk about setting it up so Audi would have more access to that data?

Customer data are not in our focus. The Audi Smart Display’s main focus is to give the customer a better user experience. But what is in our focus is the data [that] we can deliver for our cars, [to improve how] cars interact together.

I’ll give you an example: since 2011, we have had online traffic conditions in our cars, done withINRIX. We send out anonymous information from our cars to see how traffic is moving, and every three minutes we give customers anonymized information about where cars are moving, where there is a traffic jam. We have big potential for doing applications where cars inform each other whether there is an alert or additional information. That is our main focus.

Is extending the brand by bringing Audi into the house part of the strategy?

The consumer should have the flexibility to use the entertainment system in the car and also take it to the home. It is a very modern way of connecting the consumer world with the automotive world. We say they rationally belong together, and this is another step where we fuse them together. In 2010, we were the first car manufacturer to offer a Wi-Fi hotspot in the car. This is another good example where we fuse consumer devices with our cars.

How did you break free of the traditional five- to seven-year product development cycle?

Look at our modular infotainment platform, introduced with the new Audi A3 in 2012. This is a paradigm shift in bringing the technology of consumer electronics as fast as possible into the car. We used to make a specification and get in contact with first-tier infotainment suppliers like Harman or Bosch or Alpine. They would propose a kind of systems approach, and we would evaluate it and work together to realize the infotainment system.

The problem is, the approach they proposed always had a time delay, typically five to seven years, from the latest and greatest consumer electronics. Imagine all the path-changing things coming from the consumer world, like navigation, like speech recognition, connectivity, HMI. We thought [it] was no longer possible to continue doing it this way, so we separated the hardware into slow-moving and fast-moving parts within such a system, and we also separated the software.

We work with technology partners from the consumer world, like NVIDIA, for the fast-moving parts, and the slow-moving parts we’re still doing with the traditional first-tier automotive suppliers.

When you have separated these fast- and slow-moving parts, and you have a powerful technology partner like NVIDIA as your chip supplier, you also need the software running on the computer. For that reason we founded e-Solutions, a joint venture together with Elektrobit, a Finnish company. We are now able to completely follow the cycle of consumer electronics, where every one and a half to two years we are able to bring an over-the-air update of a new entertainment platform. But it took time to build up all the competencies and necessary pieces. We started building on this idea in 2003.

You mentioned that one obstacle was bringing together these technology providers, to start and launch a joint venture. What about internally? What kind of pushback did you get, and how did you overcome it?

We realized the gap between consumer electronic cycles and car electronic cycles was getting too big. This was the starting point of the discussion. Our traditional first-tier suppliers were too slow, and it was too complicated to be quick and innovative that way. So in 2009, we made the proposal at the board level, the CEO/CTO level and the marketing board level and finance side.

We had no resistance from the top or the other departments. We were surprised that we got the approval so quickly. You always get some questions, but it went really perfectly with the mobile infotainment platform. That was, in retrospect, absolutely convincing — [a situation] where our CEO and CTO and top management fully stood behind the step. They saw that we’re playing in a completely new Champion’s League, where we’re directly dealing with NVIDIA and Qualcomm and Google. In 2012, we introduced our modular infotainment system in the A3. In 2014, we’re bringing the virtual cockpit in the new TT. Next year we are bringing the Audi Smart Display based on an Nvidia Tegra chip. This cycle was, five or seven years ago, impossible even to think about.

What drove the recently announced Open Automotive Alliance with Google?

Our partnership with Google goes back to 2004, to sync Google Earth with the car. Since 2009, we have these features in our cars, and have had a big success with that in the United States. Today, 80% of all smart phones around the world have Android, so it was obvious that it would be an appropriate way to interface the devices with the car. We are designing the interfaces now, and next year, we’re going to have the first cars on the road where these devices are interfaced to the car. The customer already has an Android and Google account coming with his smart phone, and needs no additional account to bring this access to the car.

How does something like the Audi Smart Display come about, internally?

On the development side, we talked about what the next generation of rear seat entertainment is. No tablet fits to the car in a way that guarantees it will still interface to the car when it is updated, or won’t have problems with high and low temperatures and so on. All the existing rear-seat solutions are fixed, they’re not mobile. We want to be able to cope with the consumer technology cycles. We have partnerships with NVIDIA and we have our e-solutions joint venture, so why shouldn’t we make a smart tablet that perfectly interfaces to the car? Because of our earlier success with entertainment systems, it was easy to convince people internally. We built a prototype last fall. And this was so convincing in appearance and basic functionality, we first decided to bring it to market very quickly and to show it at 2014 CES.

Will this be transformative for customer relationships? It gives you access to customers in a way you’ve never had before. Is that part of your thinking?

The major idea behind it is to give our customers innovative and unique functionality they don’t get at other car manufacturers. Even if they would get it from another car maker, we always try to make ours better integrated into our cars.

What does Audi gain from the car becoming a social medium?

Customers do not want to leave the network of their lives behind when they get in a car. They want to use their time wisely, to adjust to changing schedules and commuting conditions. And the Audi is now in a position to keep them connected. In the future, our cars will take even great strides to gather, analyze and present vast amounts of information and personal updates available on the Cloud.

Typically, car owners have relationships with dealers more so than the manufacturer. Does the car as social medium change that dynamic?

Having more socially connected cars will help our customers communicate better with dealers in terms of services they need or appointments they want to schedule. We are working on tools that help Audi customers find a faster route to a car [that is] configured the way they want it. This way, Audi, our dealers and our customers can always remain in a closer loop of communications than ever before. But Audi is not intruding on a dealer’s relationship with a client.

Do you interact with counterparts at Volkswagen’s other units?

We interact in a very, very efficient and near-perfect way! It would be silly if we didn’t realize the symmetries in the huge Volkswagen group. We have identified and defined all the systems of the car in modules. In areas like switches or connectors — things that are not relevant for the brand or image of the car — we work perfectly together. We also devise work responsibilities so that some parts, our colleagues at Volkswagen are handling, and others we are handling at Audi. But in systems where it’s necessary to differentiate by directly appealing to the customer, those are handled by each brand.

What’s been the most challenging facet of trying to achieve digital transformation?

You have to identify the best technologies in the world and have the confidence to integrate them as fast as possible into systems. I’m in the great situation that electronics inside the car, inside Audi, have already gone through a lot of the transition process to bring them up to speed with the international way of thinking, the international way of development. We’ve had a development lab in Silicon Valley since 2001. Since 2008, I also have a development center in Beijing. I have a small office in Korea and in Tokyo.

How we interact and develop in the worldwide network with Audi headquarters here in Ingolstadt gives us a lot of open-mindedness and flexibility.

 

Monday
May052014

Countdown to a Golf

As you know we rarely do the news. 

Countdown to a Golf caught our attention, its imaginative, its innovative, its disruptive, and its cool.

It empowers prospects/customers to set their price.

 

Press release from VW Canada:

Did you ever think a day would come when you could watch the price of a brand new car drop in front of your eyes? Volkswagen Canada wants you to share in the excitement of the launch of the All-New 2015 Golf and Golf GTI with the ultimate test of patience and nerves with COUNTDOWN TO A GOLFwhere you have the power to decide how much you’ll let the price count down before locking in a brand new Golf or Golf GTI!

Here’s how it works:

· Visit VW.ca/golf-countdown where you’ll see the price of the All-New 2015 Golf and Golf GTIcount down every second, up to $1,000 per day. As you watch the price decrease, all you have to do is jump in, reserve it and a new 2015 Golf could be yours

· But how long can you hold out? Are you patient enough to wait for the new Golf to drop by thousands of dollars?

· You don’t have to be at your desktop to get in on the excitement – you can participate anytime, anywhere on your mobile device or tablet.

· If someone beats you to it, there’s still good news! 60 seconds after a discount is reserved, the Countdown will start again on another All-New 2015 Golf.

On now until June 24, 2014, for the first time in car history, Volkswagen Canada is putting consumers in the driver’s seat by allowing them to set the price on their All-New Golf or Golf GTI.Click here to experience the thrill of the Countdown or watch this video to get all the details.

As you know, brands continue to push the envelope in creating unique experiences for their prospective and current customers, and Volkswagen Canada is truly committed to engaging with Canadians in innovative ways, with this campaign being no exception. 

 

 

Friday
May022014

Vroom Room

Good Morning,

Entrepreneur MindsetIts the first Friday of a new month, its the Vroom Room, come in make yourself comfortable, enjoy the cappuccino and biscotti, join the conversation, leave a comment.

Tomorrow is the Kentucky Derby...cars, horsepower, horses, need we say more.

On a seperate note,the owners sold our favorite local thoroughbred farm...we dearly miss seeing the horses in the various paddocks, guess we need to find another farm that provides good photo opportunities.

Next week Auctions America is selling numerous cars from the John Scotti Collection

Canadian Sales:

April developed in a very strong month for most manufacturers in Canada. As usual a few manufacturers got tangled up.

R.Ferri Motorsports with Anthony Lazzaro and Nick Mancuso had a 1-2 win at the Pirelli World Challenge this past weekd end...yes Remo Ferri is the Ferrari dealer in Toronto, and great to see Canadians win.

In case you missed the Detroit Diesel Nostalgia just scroll down, we find it fascinating to connect dots after a few decades. It sheds new perspectives or reinforces held beliefs...whichever its interesting.

At the beginning of every year we mention that we will stay the course, and perhaps tweak a thing here or there as we progress during the year. It truly captured our imagination that several mainstrean publications are now renumerating "writers/journalists" on the basis of the quantity of eyeballs they capture.

We prefer to publish meaningful, compelling content that resonates, and enriches your automotive experience and knowledge base...we are not in the "eyeball business".

There is a fine line between staying the course, and increasingly trying to capture more eyeballs, and trying to generate additional advertising revenue. Then there is Google who regularly changes the rules and algorithms of their analytics. 

At Strada we stay the course, its our publication, its supported by our "passion".

The secret is officially out, Mark Fields is replacing Alan Mullaly at Ford.

The other day dealing with the typical afternoon congestion, and commutes that take forever. Even with all the gizmos in modern vehicles, creeping in traffic becomes intellectually boring. The thought arises that congestion, creeping in traffic, is the ideal application for an electric self driving vehicle. 

Shocking...that the thought of a self driving vehicle even flickered...really who needs this s@#t of creeping in an endless line of vehicles...factor in the latest engine start/stop technology to truly enhance the s@#t factor.

Our usual old race cars from the HMSA LSR April Invitation at Laguna Seca...enjoy.

 

Wednesday
Apr092014

Canada Digital Future 2014

Informative survey of the Canadian digital landscape... 

 

 
Monday
Mar242014

Classified Ads

If you have been in the auto business for a few years you surely remember and certainly used print classified ads to sell vehicles, especially used vehicles.

Those were the good 'ole days when everything was easy (presumably), simple, and straightforward, compared to today's complex technology, social media, engagement, digital front lines, text messages.

Lets see if we can connect a few dots from back in the day and their relevance to today.

Platforms: Which print platforms to use, what language, distribution.

Format:  A cost effective list, a brand building display, a combination, and what frequency. 

Position: Where was the ad going to appear in the platforms. Positioning provided an advantage.

Frequency: How often, which days.

Response: How fast a response for a specific ad.

Production: The time to produce the various ads, from fast for a list, more time for a display, to time and production costs for a glossy display.

Mix: What print platform mix for the month, local paper, used vehicle platforms, New York Times, DuPont.

Budget: How much money available for the year, month, week.

Strategy: Get an "edge" (competitive advantage) on your competition. Discretion was always an inherent part of any strategy..."The moment its out everyone else can copy you".

Time: Yes...it was time consuming, and same as today there was no time. Always seeking to accelerate the cycle.

Metrics: How to measure the effectiveness of the various ads, and platforms.

Scrapbook: Keep the various ads with dates in a scrapbook for reference.

An example from the "dark ages":

The dealer takes a vehicle in trade on a Friday, by the following mid week (usually the cut off was on Wednesday), the dealer places a classified (liner) ad for the vehicle to appear on the Saturday. By the following Tuesday the dealer knows the retail potential of the car in his market at that specific time. We could keep on going ...you surely understand.

An example from "2014":

The dealer takes a vehicle in trade on a Friday, by the following mid week, there is an ongoing discussion about detailing, a photo shoot, uploading photos, disseminating to various platforms. Hopefully by the following Friday the vehicle appears in a few platforms. Hopefully again by the next Friday (2 weeks have transpired) the dealer knows the retail potential. if you get the impression this vehicle is embroiled in a technological ball of grey...you also grasp a few competitive advantages.

It begs the question "How could a dealer in the dark ages that relied on print, a physical front line have a 7 day advantage on a 2014 dealer with the Internet, digital front line, social media, tools to quickly measure metrics".

A possible answer "The dealer in the dark ages was keenly focused on selling vehicles, creating customers, being competitive, and dramatically less distracted by routine technology"

Another possible answer "Few dealers in 2014 are seeking a Cyber Advantage on their competition"