Mark Fields remembers being treated like a Neanderthal when he joined Microsoft Corp. (MSFT) co-founder Bill Gates on stage at the Consumer Electronics Show in Las Vegas to introduce the Sync in-car infotainment system.
The skeptical tech press in 2007 couldn’t seem to understand what Fields, who then ran Ford businesses throughout the Americas, was doing at a show known for cutting-edge phones and video games, he said. Coming from old industry, he jokes that they asked “why aren’t your knuckles dragging across the floor?”
Now cars are among the main attractions at the International CES that opens Jan. 6 featuring vehicles with touchscreen dashboards and others controlled by smartwatches. Fields is making a triumphant return as Ford’s chief executive officer, where he’ll deliver a speech about the dawn of the connected-car era. Daimler AG CEO Dieter Zetsche will be there, too, discussing the latest concept of a self-driving Mercedes-Benz. They join a record 10 automakers showing their wares on an exhibit space the size of three football fields.
“CES has become a major launch point for a lot of the big automakers,” said Mark Boyadjis, technology analyst for researcher IHS in Minnetonka, Minnesota. “CES is a way for them to get on a global stage for technology.”
The evolution of Ford’s CES exhibit tells the story of the automotive ascent at the trade show that attracts 140,000 visitors. Five years ago, Ford displayed its new Taurus on a 20-foot-by-20-foot piece of carpet. This year, Ford has a two-story display with five vehicles, a wall of digital screens and private offices for conducting business.
“We’ve come a long way from a single car on a carpet,” said Alan Hall, a Ford spokesman who manned that first basic booth.
Ford is not alone. This year, Volkswagen AG makes its debut at the show that also includes Toyota Motor Corp. (7203), General Motors Co., Hyundai Motor Co., Mazda Motor Corp., Audi, BMW and FCA US LLC, formerly known as Chrysler Group LLC.
Bayerische Motoren Werke AG’s BMW, in its second year at CES, has a sprawling exhibit that includes a fleet of more than 100 cars and covers 57,475 square feet (5,300 square meters) of space just outside the Las Vegas Convention Center. Visteon Corp. (VC), a supplier of technology to car cockpits, doubled the size of its display, a gleaming silver and orange structure that houses three demonstrator vehicles and four private offices.
The amount of exhibit space at CES dedicated to car technologies has almost doubled over the last five years to 165,000 square feet, according to Tara Dunion, a spokeswoman for the show.
“When you look at who’s coming, with Mark Fields and Dieter Zetsche and all of us, it has become an auto show,” Tim Leuliette, Visteon’s CEO, said in an interview. “It’s reflective of the vehicle becoming a mobile device. Welcome to the new world.”
Competing on Computing
Drivers are demanding their cars keep them constantly connected like a smartphone on wheels. In-vehicle technology is the top selling point for 39 percent of car buyers, more than twice the 14 percent who care most about horsepower and handling, according to a survey last year from the Accenture consulting firm. The number of cars connected to the Internet worldwide will grow more than fourfold to 152 million by 2020 from 36 million today, according to IHS.
“Every carmaker has invested copious amounts of money bringing electronics to their vehicles,” Boyadjis said. “It’s now less about the horsepower under the hood and more about the horsepower in the center stack” of the dashboard.
That new reality of the road has transformed CES into an essential stop on the trade show circuit for automotive big wheels. Alan Mulally, before he retired as Ford CEO last July, worked the floor at several CES shows. Last January, Audi chief Rupert Stadler wowed the techies with a self-driving A7 prototype powered by processors the size of a notebook. This year, Zetsche will reveal a new autonomous concept car. Mercedes recently showed drawings of a self-driving car with four inward-facing seats around a coffee table.
“CES has definitely become an A show,” said Brad Stertz, a spokesman for Audi, which will show its next iteration of the self-driving car on Jan. 5. “It’s important now more than ever, especially in the luxury segment, to be seen as a technology leader.”
Even traditional technology exhibitors are getting on the automotive bandwagon. Nvidia Corp. (NVDA), a Santa Clara, California-based chipmaker for video games and personal computers, has converted three-quarters of its stand this year to automotive, including displaying a new roadster and an electric supercar.
“Two years ago, our booth would have been filled with PCs and people playing video games,” said Danny Shapiro, senior director of Nvidia’s automotive business unit, which supplies processors to Audi, BMW and Tesla Motors Inc. “This year we made a strategic decision to shift the focus of the booth on automotive and de-prioritize some of the other things.”
It’s a shift driven by dollars. The Consumer Electronics Association forecasts factory-installed vehicle technologies will increase 3 percent in 2015 to $11.3 billion. Nearly one-third of U.S. households now own a vehicle equipped with an electronic infotainment system, according to CEA.
Many of those systems get their start in Vegas. CES, despite its setting on the Vegas Strip, has less glitz and more substance than typical auto shows, said Visteon’s Leuliette, who is booked solid with prospect meetings next week.
“The Detroit auto show is a social event,” Leuliette said. “We’re making decisions in Vegas.”
Typical of high rollers in Vegas, the big deals go down in private hotel suites far from the convention floor. In those closed-door meetings, technology suppliers show off their most futuristic wares to automakers intent on keeping the deals secret until the high-tech feature is ready for the road.
“It’s a fruitful liaison between these two industries,” said Hildegard Wortmann, head of product management for BMW. “My schedule is completely booked through in half-hour slots. It’s a very packed day and very intense, but very useful.”
Wortmann made her first visit to CES in 2012 and returned to Bavaria with a firm message: “We have to be there.”
BMW debuted its first CES exhibit last year, offering test drives of its i3 electric car. Showgoers queued up for more than an hour to get behind the wheel.
This year, BMW is getting in on the wearable-technology craze that swept the show in recent years with products such as Google Glass and Fitbit. The luxury automaker will show a fully automated valet parking technology where the driver gets out of his car and issues a command through his smartwatch: “Go park yourself.” The car then finds an open space in a parking garage and parks itself until beckoned by the driver to return.
“Most of the visitors at CES are really very techie and very nerdy. They really want to test our stuff,” Wortmann said. “We keep you entertained, I promise.”
Hyundai also is showing off wearables, with a smartwatch that can start or unlock a Genesis luxury sedan with the tap of the finger.
Wearables are on the watch list for Tim Nixon, chief technical officer for GM’s OnStar unit. He is trying to carve out time to walk the floor to see whether something like Google Glass could replace heads-up displays in cars. But he’s so booked with client meetings, he may have to do his scouting early in the morning, before the show opens.
“Every year I ask the folks who are pulling the calendar together, ‘Can you please give me a four-hour block just to wander?’” Nixon said. “We start out with good intentions, but it never works out.”
Some of the biggest buzz is building for Apple Inc. (AAPL)’s CarPlay and Google Inc.’s Android Auto systems that mimic the functions of an iPhone or an Android phone on a dashboard touchscreen. They are scheduled to go on sale early next year. When Apple first showed CarPlay on a few models at the Geneva Motor Show in March, it stopped traffic on the convention floor.
“There were mobs of people who wanted to see that Apple screen inside a car,” said Nvidia’s Shapiro, who was there. “It was nuts. You couldn’t even get close. Everyone just swarmed those cars.”
Visteon’s Leuliette is hoping for a similar reaction to a downloadable dashboard he’ll be introducing. Covered in digital, curved touchscreens, the contents of the dash — speedometer, navigation, stereo and climate controls — can be downloaded and updated throughout the life of the car, keeping its technology as current a smartphone, Leuliette said.
“We’re going to show this is not just some crazy idea,” Leuliette said. “We will walk away with some handshakes that will ultimately lead to business.”
The ability to get deals done is what drives automakers to CES. As technology trumps horsepower, auto execs are discovering the future of their mobile device depends more on the tech geeks at CES than the gearheads at an auto show.
“We’re thinking of ourselves as a mobility company and not only a car and truck company,” Ford’s Fields said. “We want to be viewed as being part of this community.”