Boooooring.

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Why Carmakers Want People (Not Robots) to Drive

Justin Fox is a Bloomberg View columnist. He was the editorial director of Harvard Business Review and wrote for Time, Fortune and American Banker. He is the author of “The Myth of the Rational Market.”
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Carlos Ghosn has seen the pictures of Google’s little self-driving car. He is not impressed. “It’s a box,” the chief executive officer of Renault and Nissan said during a visit to Bloomberg this morning. “It’s not about seduction or attractiveness.”

Sure, he understands the economic logic of utilitarian driverless vehicles that shuttle people around all day and night. It’s just that (1) he doesn’t think the driverless age will be upon us for at least another decade and probably longer, for regulatory reasons if nothing else, and (2) he and other auto industry executives would much rather work on other stuff.

“Do you see any CEO of a major automaker saying, ‘Wow, self-driving cars! It’s great!’?” No sir, Mr. Ghosn, I don’t.

Then again, of course the incumbents in what it is at the moment a quite profitable industry wouldn't be excited about a development that could disrupt the heck out of their business. This doesn’t mean they’re wrong. But it does show why there is an opportunity for an outsider such as Google.

Ghosn again: “The car industry will do everything it can to make sure that the product does not become a commodity.” Functional little self-driving cars that you don’t buy but consume as a service are pretty much the definition of a commodity.

Cars with partly autonomous features such as Audi’s “piloted driving,” which operates a bit like an airliner's autopilot, are another matter. Audi's take:

Piloted driving is not a “must”, but rather something you “can” select. Audi will never build robot cars, but instead will always put the driver in the focus of its decisions.

This keeps automakers in the familiar territory of trying to win over buyers with unique features. Cars could still be attractive and seductive, and there would be no need for a wholesale rethink of car ownership. Ghosn is a big fan of these autonomous technologies, with "Traffic Jam Pilot," which allows for hands-free driving in stop-and-go situations, scheduled to be available in some Nissan and Renault cars by the end of next year. The goal is "eliminating the drudgery of driving, not the joy of driving," he wrote recently on LinkedIn. Newcomer Tesla and probable future-comer Apple would prefer to compete along these lines too -- they don’t want to produce commodity vehicles either.

The question, really, is whether it will be up to them. Ghosn said today that with all the coming advances in autonomous technologies, Renault-Nissan and other automakers will be prepared to jump into fully self-driving cars if the market heads in that direction. But when a market shifts in a really big way, as seems at least possible for cars in the coming years, the incumbents can find themselves either playing catch up or falling further behind. Adding autonomous features to existing cars is much different from designing a car that's optimized to drive itself.

“Our duty is to make sure we detect trends and work out trends,” Ghosn said, “but at the same time be sufficiently humble to admit that we don’t know what’s going to happen.” That sounds eminently sensible. It also leaves a possible opening for those less humble.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

To contact the author on this story:
Justin Fox at justinfox@bloomberg.net

To contact the editor on this story:
James Greiff at jgreiff@bloomberg.net