Volkswagen AG is looking to change the way consumers buy new-car options by using over-the-air updates to offer some features on a trial basis.
Calling the process "functional demand," Volkswagen believes it can revolutionize the options-buying process, giving consumers more time to try out and experiment with infotainment, comfort features, powertrain functions and other options. These features could be added and deleted, with car buyers purchasing them on a subscription or trial basis.
"Today you go to a dealer and they have a limited time to explain the functions," Frank Welsch, head of technical development for VW's board of management, said in an interview at CES. "By having updatability, it gives drivers the possibility of testing for a couple of weeks."
Over-the-air updates were once considered a daunting technological task that could expose vehicles to cybersecurity issues. But Tesla proved it was possible to alter almost any feature on a vehicle when it began tweaking the behavior of the Model S sedan through over-the-air updates. Now, automakers are searching for different ways to gain access to vehicles to provide safety updates, fix computer issues without forcing customers to head back to the dealer, add features and update options over time.
IHS Markit says over-the-air updates will save the auto industry $35 billion in 2022, and the total number of vehicles equipped to handle over-the-air updates will increase from 1.2 million in 2015 to nearly 32 million vehicles in 2022.
Welsch said VW's functional demand process would work on features that are not dependent on having specific hardware in the vehicle. It would apply to features that are controlled by software codes, such as voice control (provided there is a microphone in the car), adaptive cruise control, navigation, lane-departure warnings, concierge services, satellite radio and personalization of the dashboard.
A recent survey by J.D. Power showed that automakers are spending billions on features that drivers never use. The 2016 U.S. Tech Experience Report showed that 20 percent of customers never use 13 of the 33 technologies studied, and that there are 14 options that drivers say they do not want in their next vehicle. Among those are Apple CarPlay, Android Auto, in-vehicle concierge services and in-vehicle voice texting. The study found that customers either didn't find those features useful, or that they came bundled as part of an options package and weren't used.
"There are many technologies consumers weren't sure they had, and other technologies they chose not to use," said Kristin Kolodge, executive director of driver interaction and HMI research at J.D. Power. "Customers are paying for that technology when they purchase their new cars, and on the opposite end, manufacturers are paying to develop that technology."
By having access to options and features on a trial basis, Welsch said, drivers will be more motivated to figure out how the technology works before the trial period is over.
And Kolodge says a system like VW's could help cut out financial and manufacturing waste from the car-buying and car-manufacturing process.
"It allows for a more customized and personalized option take rate, but doesn't affect manufacturing complexity," she said.
