Automakers steer cars toward connectivity

That's the message from executives at American automakers, who are strongly pushing their dashboard technology and e-commerce efforts at the 2001 North American International Auto Show in Detroit. The show, one of the largest of its kind in the world, opened Sunday with a four-day media preview and will be open to the public through Jan. 21.

"Connectivity is one of our highest priorities," said Wayne Cherry, vice president of design for General Motors. "E-commerce is changing the way we think of our vehicles."

The automakers and their suppliers echoed that sentiment at the Consumer Electronics Show, which began Saturday in Las Vegas. Numerous electronics makers unveiled gadgets for the car, from in-dash DVD players to voice-activated navigation units. Sirius Satellite Radio and XM Satellite Radio also previewed services and products for the car.

On Sunday, GM kicked off its auto show preview by giving journalists a sneak peek at four futuristic concept vehicles, including one with a dash-mounted PC and cellular modem access. For years, automakers have struggled to keep up with the faster cycle times of the electronics industry, usually with unfortunate results: Very few automobiles come equipped with the latest serial or universal serial bus (USB) ports to accommodate PCs or handheld devices.

GM, which last fall unveiled pre-installed PCs in some models of its Cadillac luxury vehicles, hopes to change that. It plans to provide up-to-date PC access on lower-end models and expects to make "significant announcements" on that front later this year, Cherry said.

On Sunday, GM introduced the GMC Terracross sport-utility vehicle, which features an integrated laptop computer with a cellular modem on the vehicle's dashboard. It also has a configurable color instrument panel that allows the driver to display information from the speedometer, fuel gauge, tachometer and warning lights in dozens of different ways.

Although concept cars rarely see the light of the mass-production assembly line, automakers liberally borrow cues from their most popular concept cars, which appear around the world at big auto shows.

GM researchers say young consumers are demanding dash-mounted PCs with cellular Internet connections. To appeal to Generation Y, which is just now learning to drive, the world's largest manufacturing company must perceive itself as a connectivity provider--not just an automaker.

"They told us they wanted in a car all the things they wanted to do at home, from email and Web surfing to video games," said Carl Zipfel, chief designer for the Terracross. At 33, Zipfel was the oldest member of the Terracross design team.

According to automotive marketing group J.D. Power and Associates, 30 percent of consumers say they are "interested in" on-board computers, while 23 percent say they are interested in passenger video games.

That pales in comparison to the number of consumers who expressed interest in safety features: 84 percent wanted run tires and 80 percent wanted low-tire-pressure monitors. But the number of technophilic drivers willing to pay extra for on-board gadgets is rising sharply, representing an important revenue stream for the mature auto industry.

Although rigging automobiles to suit a wired population is a priority, the automakers also hope to revolutionize their own operations through technology.

Each is experimenting with selling vehicles online, and GM is even letting its Brazilian customers configure vehicles online--a process that cannot currently be imported to the United States because of franchise laws that forbid manufacturers from selling directly to consumers.

GM, Ford Motor and DaimlerChrylser also announced early last year the formation of Covisint, an online marketplace where automakers and an estimated 30,000 suppliers can sell parts and collaborate on projects.

Although auto executives insist they can wring roughly $3,000 out of the cost of an average new vehicle, the project has been beset by turmoil: Its leaders cannot find a capable chief executive to lead the venture, and it does not have a permanent headquarters. And many analysts are warning that, as the U.S. economy cools and Internet businesses fall on tough times, the automakers funding the venture might scale back grandiose plans.

Despite the difficulties, it's clear that the auto industry is eager to shed its Rustbelt reputation and align itself more closely with the New Economy than with the smokestack industries of the Old Economy.

Ford Motor CEO Jacques Nasser told an audience of thousands of journalists and Ford employees Sunday that e-commerce is an "imperative" for the automaker.

"We've started a variety--really a flurry--of e-business efforts," Nasser said to rapt applause from Ford workers.

And, putting a new spin on the New Economy buzzword "bandwidth," Nasser said that Ford is in a unique position to connect customers--be they patrons of Ford's upscale Jaguar division, yuppie parents who drive Volvos, farmers who favor F150 pickups, or nostalgic aficionados of the redesigned Ford Thunderbird.

"We can leverage our significant brandwidth," Nasser said.