The auto-making alliance, which together sells more vehicles than any other auto maker, is picking Google to provide the operating system for its next-generation infotainment system, marking a major victory for the Silicon Valley tech giant, which has spent more than a decade trying to replicate the success it has had with the smartphone in the car.
The alliance, which last year sold a combined 10.6 million vehicles globally, will debut the new system in 2021, giving drivers better integration of Google’s maps, app store and voice-activated assistant from the vehicle’s dashboard, the companies said.
The move comes as other auto makers have been reluctant to cede control of this space to tech rivals, in part because they see the technology as generating valuable consumer data that can be turned into new revenue streams.
Many drivers remain wedded to their phones, opting to use them in their cars to call up directions and perform other tasks. The auto industry has struggled to develop interfaces that are as reliable and easy to use. Many car systems are too complicated and prone to glitches, industry analysts and reviews say.
The alliance’s executives said many of its customers are already predisposed to using Google’s apps over the ones developed by the car companies and their suppliers. And these executives have grown comfortable with Google, which began open-sourcing its software in 2007.
“The trust was built in the last few years,” said Kal Mos, the alliance’s vice president of connected vehicles, in an interview.
This deal will likely put pressure on the alliance’s competitors to further open their car’s multimedia systems to Google or Apple Inc., another software giant trying to play a larger role in the auto industry. The ultimate vision for Google is to create a broad ecosystem for its users, so they will be able to move their digital lives effortlessly between devices, whether it is a car, home or smartphone.
The companies declined to disclose the terms of the partnership. Google will have access to the data generated by its in-car apps, but must get the customer’s permission first before collecting it, Mr. Mos said.
Such in-car operating systems have become a key difference-maker for auto makers in recent years as they have closed the gap with each other in other areas, such as quality and reliability. Customers, meanwhile, have come to expect a user experience similar to their smartphones.
J.D. Power’s initial-quality study ranked troubles with today’s in-car multimedia systems as the “most problematic” category for new car owners. Consumer Reports magazine, which is known for pulling its buy recommendation for substandard in-car electronics, now tracks the most and least distracting systems.
As more vehicles are connected to the internet via built-in modems, industry experts expect new businesses to emerge for data generated by the car’s onboard electronics. Many auto makers say they want to maintain control over licensing this data to third parties and see it as a valuable touch point with customers after they leave the showroom.
Since 2005, Alphabet Inc.’s Google has been trying to chart a path into the car. Volkswagen AG’s Audi became the first to put Google Earth in its in-car navigation systems. Volvo Cars has announced that its next generation in-car infotainment system would run on Android, Google’s operating system.
But in general, car companies have been reluctant to go too far with Google, unsure how their business models will evolve, said Mark Boyadjis, a global technology lead for IHS Markit .
“Apple went to market with iTunes, coined it as a way to protect the music industry and then subsequently took over the music industry,” Mr. Boyadjis said. Auto makers are asking themselves: “’How much do I give over to this tech company?’” he added.
Google has been working to alleviate those concerns, putting out its Android operating software to be used for free.
IHS Markit estimates that auto makers this year are using some level of Android software in 19% of the infotainment systems installed in vehicles globally. In doing so, the auto makers are creating their own user ecosystem.
Google has also offered Android Auto to car makers to allow users to pair their smartphones into the dashboard display. Apple has a similar product, marketed as Apple CarPlay.
Outside of cars, Google’s operating system has become dominant, running in more than 80% of the world’s smartphones.
Silicon Valley’s increasing interest in the auto business has unnerved auto makers globally, especially as Google’s self-driving car project as evolved into a stand-alone business called Waymo and aims to begin commercially transporting riders this year.
The Wallstreet Journal