Audi Sees Electronics Matching Horsepower in Carmakers’ Value

Audi AG expects that electronics and digital features will become just as important as sheer horsepower for global carmakers as they brace for a fundamental industry shift and new competitors and potential allies emerge.

“By 2020, 50 percent of value creation will be based on apps, software, electronic systems and digital services,” and opportunities are “endless,” Luca de Meo, Audi’s sales chief, said Sunday in the text of a speech prepared for the Consumer Electronics Show in Shanghai. “This will totally change our industry and our offering.”

Audi, the world’s second-largest manufacturer of luxury vehicles, said last week that it’s open to other carmakers joining a group bidding for Nokia Oyj’s HERE digital-map division in competition with technology companies. The auto industry has been grappling with how to integrate electronic functions such as in-car connectivity and automated driving.

Volkswagen AG, Audi’s owner, set up a task force last year to speed up adaptation of technology in new models. Wolfsburg, Germany-based VW said Friday that its Car-Net system will package applications for on-board use of drivers’ smartphones or tablets operating on Google Inc.’s Android Auto software or Apple Inc.’s CarPlay and including voice recognition.

At the electronics show, Audi is offering an eight-kilometer (five-mile) piloted drive in an Audi A7 sedan from the Shanghai Expo area to the city’s Bund riverside district to showcase the technology. The Ingolstadt-based manufacturer is also presenting new connectivity features developed together with Baidu Inc., and tablet computers from its revamped Q7 sport utility vehicle that customers can operate by gesture.

“Never before in nearly 130 years of automotive history has our industry changed as fast and as completely as now: How we engineer our cars, how we produce them, how we present a new model, where we sell it, who we sell our cars to and who we work with in the future,” Audi Chief Executive Officer Rupert Stadler said in Shanghai.

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