Mercedes: Google doesn't scare us

’17 E-class sedan: Technology showcase

SUNNYVALE, Calif. — Mercedes-Benz executives predict that the auto industry will change more over the next 10 years than it has in the past 50, and they see the company as well-positioned to capitalize on that change.

Driving the industry’s transformation are the generational shift to millennials, increasing autonomous driving capabilities and the shift to cars with much higher fuel economy, including many more zero-emissions vehicles, said Dietmar Exler, CEO of Mercedes-Benz USA, during a press event here.

Autonomous driving alone will open up many new business opportunities, he said.

“It will change existing businesses fundamentally,” Exler said. “We’re pretty proud with where we are with Mercedes. There’s a lot that our cars already do: They stop by themselves, they follow the road by themselves.”

As for other technological frontiers, vehicle connectivity today is more of a problem than a solution, said Bart Herring, general manager of product management for Mercedes-Benz USA. Distracted driving caused 3,179 deaths in the U.S. in 2014, according to the National Highway Traffic Safety Administration.

But if half of the vehicles on the road were autonomous, it would save an estimated 9,600 lives every year and lead to 1.88 million fewer crashes, the company said.

The 2017 E-class sedan, going on sale this month in the U.S., is a showcase for Mercedes’ autonomous driving technology. It can change lanes on its own and support hands-free driving for up to a minute. It’s the first standard production vehicle to receive a license for autonomous driving testing in Nevada, the company says.

In the long term, “intensive development work” is needed, and advances will come in stages, said Arwed Niestroj, CEO of Mercedes-Benz Research & Development North America. The work in autonomous driving by emerging competitors such as Google “doesn’t really frighten us,” he said. “We see ourselves in a strong position.”

Mercedes also is working with other automakers through the Alliance of Automobile Manufacturers to help steer regulations to keep pace with technological advancements — with the goal of creating a uniform regulatory environment across the country, Exler said.

Brand executives dismiss the notion that autonomous driving will replace human drivers entirely. People still want to be in control of the car — unless they’re stuck in heavy traffic, Exler said.

“When we can enjoy it, we want to do it,” he said.

Mercedes researchers are also looking at potential changes in ownership patterns. Despite the buzz about car sharing, millennials still generally prefer to own a car and are loyal to brands with strong product and good customer experience, Exler said, and that bodes well for future business.

While the trend has been to have more vehicles per household, particularly among affluent buyers and Mercedes customers, that number could drop as car-sharing services expand, acknowledged Eric Larsen, customer research director for Mercedes-Benz R&D North America. Mercedes is working on some pilots in suburban markets looking at shared mobility, he said. Mercedes parent Daimler AG operates Car2Go, one of the world’s largest car-sharing services.

Millennials also want connected cars and a good customer experience. Mercedes is exploring how to use artificial intelligence to better understand consumers and then customize their user experience.

“The machine can try to become more of a companion to the user,” said Kal Mos, vice president at Mercedes-Benz R&D North America.

Mos and his team want machine learning to simplify the user experience. If the car’s computer can understand what users are doing and learn their preferences and habits, it could program itself to set the radio station, turn on the heat and check traffic for the drive to work, Mos said. Personal profiles could be created for multiple users of a vehicle, and those profiles could be carried from vehicle to vehicle.

“This is not science fiction,” Mos said. “This is what we’re actually doing today.”

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