Analysis: Watch out for the robot car!: Page 2 of 3

May 29, 2014 // By Christoph Hammerschmidt
In the European automotive industry Google's activities with robot cars have been watched with a certain nervousness. Now the pictures of a cuddly two-seater have gone around the world: Apparently a humble vehicle containing just the minimum of what is required to make it move at all. Certainly, nobody expected the Google car to compete against the mechatronic masterpieces from Munich, Stuttgart and Ingolstadt, but in terms of automotive technology this is below expectations. This first sight impression however should by no means be a reason to underestimate neither Google's engineering capabilities neither its appetite for a larger piece of the market cake.
fairs and industry meetings, BMW, for example, does no longer position itself as a manufacturer of cars. Instead, BMW defines itself as a "vendor of mobility".

Technological building blocks of this new type of mobility are, among others, the connected car and automated driving. In both of these areas, the European automotive industry has reached a similar level of technological maturity as Google. Past year, Daimler sent an automated car over the same route as Berta Benz took in the year 1888 during her historical first-ever cross-country trip with an automobile a distance of some 100 kilometres. In Gothenburg, Volvo is currently tests automated driving with about 100 vehicles - on public roads and among normal traffic.

When it comes to automated driving, technology today is much less a roadblock than the legal and insurance situation. The Vienna Convention on Road Traffic (not signed by the U.S., by the way) as well as liability aspects currently prevent carmakers from offering such vehicles. But in the light of the current development it is expected that the discussions and processes among lawmakers gain speed.

But there is another aspect why Google scares the traditional automotive industry with its seemingly harmless two-seater: It highlights the fact that it is possible to build a car without having any experience in this business. Who ever feels inclined to participate in this market can have built a vehicle by engineering service providers and contract manufacturers. Given the highly fragmented value chain in today's automotive industry, a large percentage of the intellectual property, experience and expertise associated to making automobiles is no longer in the hands of traditional carmakers but of other members of the value chain - and as such, it can be purchased by anybody with deep enough pockets (we believe that Google's pockets meet this requirement). The advent of electromobility already confronts the illustrious and elitist circle of traditional carmakers with the prospect of

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