GM Investing Big on Connected Cars

 

General Motors is in the process of expanding its team of software and controls engineers for its Canadian Engineering Centre in Oshawa, Ontario to focus on connected cars and green technologies. Announcing the expansion in a news release, GM Canada president, Steve Carlisle, said, “We are making this investment because we see an opportunity to take advantage of a wealth of talent in mobile technologies, software and advanced automotive engineering available in Canada’s leading universities and other partner organizations.”

The company stated that, aside from the staff expansion, it is also continuing research partnerships with suppliers and universities in the country. It plans to transform the center into an innovation hub for connected cars, researching on technologies they are going to use, such as wireless systems that will help drivers improve gas mileage, navigate, avoid traffic jams and gain access to some form of entertainment.

 

What Is a Connected Car?

The industry term “connected car” is used to describe vehicles that are equipped with technology allowing drivers to share a variety of data online. This is considered as one of the keys to developing self-driving cars. In a video presentation, GM described connected cars as a mandate for the company, and the innovation would help make automobiles safer and more efficient.

 

Why Is GM Investing so Big in Connected Cars?

As stated earlier, GM likes to engage in connected cars to make driving more convenient, efficient and fun with some innovative technologies. But aside from this, the company also reveals to expect improved profits over the next 3 years, and this will be from selling these vehicles. This has been the first time an auto maker made such projections public.

In a presentation to investors, the company said that e-commerce transactions made through in-car systems, automatic orders from fast-food chains and software updates that help cut repair costs down will add up to the improved profitability. New revenue streams and cost savings will be made possible through the 4G LTE OnStar wireless connectivity that GM plans to put in the majority of its 2016 vehicles.

However, its plans will not come without any serious caveats. There is a question whether consumers will be willing to pay for things they already have on their smartphones—why spend extra money for another connection when they can already access goods and services through their mobile devices? Another issue is how sleek and intuitive the in-car technologies will be. Will they be easier to use than Android devices and iPhones?

With these challenges in mind, the auto manufacturer will have a lot of work to do in convincing consumers that connected cars are of great value.

 

Government’s Support to Such Types of Development

In a separate announcement, the federal government said it would start taking applications for a program that supports innovation by auto makers. The fund will support activities, such as process engineering, prototype development and product testing by those supplying car parts, and of course it will cover technologies for connected cars. Expressing his thoughts about this move, Ontario Minister of Economic Development Brad Duguid said, “This is a boost to both our automotive and information and communications technology sectors, and a true testament to our highly skilled workforce.”

As of the moment, GM has not yet committed to an on-going assembly in Oshawa, but said it will wait until 2016 to make announcements for any new models to be created in the plant.