Carmakers Step Up to Silicon Valley Challenge

Posted February 8th 2017


via New York Times

Autonomous driving, electric cars and ride-hailing apps from Silicon Valley, like Uber, are reshaping transportation. Young people no longer feel as compelled as previous generations to own cars. And Wall Street shows scant respect for automakers and their global manufacturing prowess: The market value of Google, which is building a driverless car, is more than double that of BMW, Daimler and Volkswagen combined.

At stake is the fate of the German economy, Europe’s largest, at a time when the region is only beginning to emerge from a decade-long economic malaise. Germany, in particular, is as dependent on its carmakers as Michigan is on Chrysler, Ford and General Motors.

Industry executives here often cite how Apple’s iPhone quickly erased Nokia’s once-dominant position in the mobile handset market, and they are determined not to let something similar happen to them.


Many carmakers around the world have decided to join forces with Silicon Valley through partnerships and investment deals. Fiat Chrysler is working with Google on self-driving cars, General Motors has invested $500 million in Lyft, and Volvo provided the vehicles for Uber’s driverless car tests. German automakers on the other hand are taking a more competitive, DIY approach, developing technology of their own to outfit their vehicles. The big question is, as Peter Schwarzenbauer, a member of the BMW management board, told the Times, “Do we car manufacturers learn to become tech companies more quickly than a tech company learns to be an automotive player?”