When is a car company not a car company? There are a couple of paths into this way of thinking.
One – and this is among my least favourite topics, but I suppose we must delve into it – is the idea that car makers are gradually becoming software companies that just happen to also make cars. Eek.
Volvo’s Jim Rowan, several weeks ago uninvited from being Volvo’s Jim Rowan, spoke positively about this trend in March.
He talked of ‘cloud architecture’ and ‘full-stack software’ and, I know, I know, I should actually understand what those things mean and what the implications of them are, but even though I’m skinny and bald and my spectacles are thin-rimmed, I’m just not tech bro enough to get my head around it all.
Software is essential: I do understand that much. And I get that if a car can talk to other cars and a base some distance away, if it can send and receive reports on incidents and accidents, that will make for safer and easier journeys. But as a driver/owner/user, I don’t need to know and honestly don’t care how any of this is happening.
Then there are the user-facing parts of software, which I do care about and which some important people clearly believe are going to be deciding factors in what defines their company’s characteristics and what separates it from a competitor.
I think the user interface and user experience are really important, but I also don’t buy into the theory that software will define a car company.
I used to put this down to the fact that I’m increasingly an old man yelling at clouds, but the more I hear from younger drivers, the more I think they feel the same way. There’s only so much software you can use in a car. I just don’t believe people are going to fall in love with a car brand because it has the best software.
It’s not like shopping for furniture or the choicest ingredients to make a great dinner. There I’ll pick my favourite things. I don’t, though, have a favourite shopping website, which is what car software most reminds me of: it’s not a thing in itself but a conduit to get to a thing.
Join the debate
Add your comment
Interesting column, Matt. Written in a car magazine, you will get very audience-specific responses. If addressed to car buyers as a whole, I would guess that the answer is. 'No, I don't care if software is redefining automotive or not, but if it makes cars cheaper to run, safer, more convenient and easier to use (e.g. reliably connect phone) without massively increasing the price then I'm in favour.'
Commercially I think it would be very dangerous for car companies to redefine themselves as software companies. All their IP is tied up in expertise related to production (whether mass or bespoke), engines, safety, dynamics and brand management. Some have spent over 100 years refining this IP in one of the most competitive global markets. To suddenly start competing with software companies, who have similar expertise in their markets, would be idiotic. Jim Rowan's fate suggests that Geely, prompted by investors (Volvo's share price has fallen from SEK70 soon after the IPO at end-2021 to SEK18 now), came to realise that.
There's no doubt that software is essential to modern cars but its implementation will be key to a successful product. I would presume a car company should produce a car with characteristics/relative strengths that gives the company the greatest marginal advantage in a given market. In the large SUV market, Volvo should therefore focus on producing a car that is safe, comfortable, spacious and provides a sense of reassurance and calm - in contrast to the competing product from Merc, BMW, Zeekr, Kia et al. The software should support these characteristics and not be the primary reason for buying the car. If they did so, they wouldn't stand a chance against the likes of Tesla.
I think buyers will care, all right, when the tech collapses and effectively writes the car off as being beyond economical repair!
The used car market is roughly three times the size of the new car market here in the UK, and unlikely to change soon.
Simplicity is the key to cost effective motoring with 3-15 years old cars.
Likely decision swayers will be cheap to run, cheap to run and err....cheap to run. Lack of complexity.
I think most customers now understand software adds functionaility. Eg your phone may look cool but without apps it's pretty pointless. This will only increase as EV motors and adaptive suspension allows people to customise cars how they want, not forced into a sporty or comfy fixed version by manufacturers. Same for steer and brake by wire. (It's just automotive journos that struggle with the new world!)