Audi snubs Google bid to attract German carmakers

FRANKFURT (Bloomberg) -- Google's strategy of courting German carmakers into partnerships got a snub from Audi amid concerns that Internet-assisted driving may risk intruding on passenger privacy.

"A car today is a second living room -- and that's private. The only person who needs access to the data onboard is the customer," Audi CEO Rupert Stadler said in a speech to executives in Berlin on Tuesday.

Stadler’s comments signal a move by German automakers to tap domestic reservations about data protection as they attempt to build rival platforms to challenge Google for market share in Internet-assisted motoring.

"Customers want to be at the center" of car ownership "and not exploited for it," Stadler said. "They want to be in control of their data and not subject to monitoring. And we take this seriously."

Talking at the same event, Google’s Chairman Eric Schmidt said the technology company has worked with Audi, Opel and Volkswagen in an "Automobile Alliance" for about a year.

"I want to emphasize we're doing this with partners," Schmidt said. "In our case, we're working with a whole infrastructure here in Germany." Schmidt said the Google wants "essential" German expertise to realize its European automobile projects.

Carmakers including Toyota Motor Corp., General Motors and PSA/ Peugeot-Citroen are investing heavily in an industry shift in which software plays a vital role and new competitors and alliances emerge.

Digital features

Stadler reiterated Audi’s view that electronics and digital features could become as important as horsepower to manufacturers' product value by the end of the decade.

Audi and its German counterparts BMW and Mercedes-Benz have set aside rivalries to bid as a group for Nokia's HERE digital-map division alongside a private equity group, sources said last month.

Automakers are pushing for deeper integration of electronic functions in vehicles, such as in-car connectivity. Nokia's maps could help limit Google's inroads to the industry by providing the basis for technology including automated driving.

Volkswagen Group, Audi's parent company, set up a task force last year to speed up the adaptation of technology for new models. VW said on May 22 that its Car-Net system will package applications for on-board use of drivers' smartphones or tablets operating on Google's Android Auto software or Apple's CarPlay and include voice recognition.