Auto Industry Teams With Internet
Mar. 01, 2000
GENEVA (AP) _ The Internet and the auto industry teamed up at the International Motor Show Wednesday as Europe's No. 2 carmaker and French telecom and industrial group Vivendi signed a deal to provide motorists with online safety and navigation services.
``The automotive industry is talking more about Internet than cylinder heads and pistons,'' Jean-Martin Folz, chairman of PSA Peugeot Citroen, said as the companies launched Wappi!, billed as the first Internet portal offered to European drivers.
The new approach goes beyond existing dashboard screens in luxury cars that give directions based on global-positioning satellites and an in-car database.
Vivendi chairman Jean-Marie Messier said the venture would be open to other firms. The aim is to give Peugeot Citroen owners ``a little bit of an advance'' on the opportunity, Folz said.
``You don't buy a suit off the Net. You don't buy a car off the Net,'' David Thursfield, president of Ford of Europe, told The Associated Press. ``But it's going to play an increasingly important role.''
General Motors Corp. and Ford Motor Co. have committed to offer Internet access in a handful of luxury vehicles this year; GM already offers a navigation and safety service called OnStar in several models.
Last week, GM, Ford and DaimlerChrysler AG agreed to create a unified, online network for purchasing supplies that would be open to other automakers.
Meanwhile, France's Renault said it and Nissan of Japan are in advanced talks with Ford, GM and Daimler Chrysler to buy a stake in the three companies' online purchasing system.
``Talks will be finalized soon,'' Renault Commercial Director Francois Hinfray said, adding that both want to play an active role in the system's design.
The announcement by Peugeot Citroen and Vivendi represents a milestone for the car industry as it seeks to incorporate the Internet into its products and operations.
Drivers of Wappi!-equipped cars will have rapid access to roadside assistance services and to operators who can give advice about vehicle problems and maintenance.
They will be able to obtain information about traffic congestion and itineraries, and can receive the information by phone or on a display inside the car. Motorists also will be able to buy products and services online.
The voice-activated system will be available on two models _ the Peugeot 607 and the Interactive Citroen Xsara _ as early as September. Drivers in France, Germany and Britain will get the first Wappi!-compatible cars, followed later by motorists in Italy, Spain and nine other European countries.
The companies, which hold equal shares in the joint venture, do not plan to make the Internet services available on cars sold in the United States.
The partners expect that within two years, 80 percent of all new Peugeot and Citroen models will be Wappi!-compatible. But Folz refused to say how much this compatibility would add to car prices.
Although some services will be available for free, many will be sold on a subscription basis. The monthly price for the full package of services will about $4.85 to $6.80, Messier said.
The two companies estimate Wappi! startup costs at $2.2 million. It will cost another $4.4 million to develop the services, the executives said.
Citroen director Claude Satinet said his firm will sell a total of 500 cars with advanced communications capability in March and June as it tests the market for connected cars.
Automakers including BMW, Alfa Romeo, Rolls Royce and Ferrari are introducing new models at the Geneva show, which opens to the public Thursday and closes March 12. U.S. firms including Ford, GM and DaimlerChrysler have highlighted a stronger commitment to the hotly contested European market.
Ford conceded that it needs to shore up its market share in Europe, which dropped last year from 11.8 percent to 11.2 percent, according to Salomon Smith Barney.
``One of our fundamental weaknesses is our narrow product base,'' Thursfield said. ``We need to address that issue and address it quickly.''
One European manufacturer, Renault, said it had no plans to return to the U.S. market it left in 1987, even through the sale of its new Avantime minivan coupe.
Renault has been considering the sale of the Avantime under Nissan's luxury brand Infiniti, chief executive Pierre-Alain de Smedt said.
``Although we haven't made a final decision, we are leaning toward thinking that this isn't the best thing to do,'' he added. Renault holds a 36.8 percent stake in Nissan.