Valtech Mobility (a joint venture between Valtech & VW, the global digital company started in France in 1993) works with major car brands like the Volkswagen Group, and Toyota, as well as with startups, to “define the future of the connected vehicle and the automotive customer experience.” Norman Palmhof, whose LinkedIn headline is You never code alone, joined Valtech as a young IT consultant in 2010.
The Business of Mobility is a series of articles featuring business leaders in sustainable mobility.
Q&A By Daniel O’Brien with with Norman Palmhof, Head of Internationalization, Business & Product Development, Marketing at Valtech Mobility
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Daniel O’Brien: What does Valtech Mobility do?
Norman Palmhof: Basically, we are dedicated to the connected vehicle and all aspects of contemporary and upcoming mobility services.
Daniel: Connected vehicles, surely an idea whose time has come.
Norman: Indeed. Twenty years ago the intention for connected vehicles was there and Valtech was experimenting with solutions. But the tech wasn’t ready; can you believe that they were relying on SMS messaging. But since I joined, about twelve years ago, there has been an explosion of innovation in the field. When we started, there were only two of us working on connected vehicles, now there are 500+ in Germany and 60 in China; with more being added all the time.
Daniel: The Volkswagen Group, the world’s biggest automaker by revenue, is a big story for you.
Norman: One of the most interesting things we have done in the last 10 years is developing the backend platform with VW, to connect all their cars.
Daniel: That’s a lot of complexity…
Norman: Yes, you’re talking about 25 million vehicles in 64 countries, across a dozen models, many with different types of software, given the different generations of vehicles. So, we’re very proud of being part of building this world-leading platform in connected vehicles for a major carmaker.
Daniel: How is VW commercializing the platform?
Norman: There are many ways to please customers and keep them close to the business. We’ve worked on around 50 different services for the VW Group, all enabled by the connected platform. For example, you lose your car in a parking lot, and you can remotely get the car to hoot so you can locate it. Another example is that drivers can increase efficiency, convenience and safety by using a feature which calculates and displays the ideal speed to catch a green wave.
In China and Japan, there are concierge services that help you locate a decent restaurant nearby. Usage-based insurance is also an important area for connected vehicle innovations, and we are active in this area too. But these days, when everyone has a smartphone that can do so much, monetizing services can be a challenge.
Daniel: Yes, many companies fear that Big Tech is going to eat their lunch.
Norman: And in Europe, we are especially sensitive to this, given that we don’t have the big tech players to compete with the likes of Amazon, Google, or Tesla for that matter.
Daniel: With the rise of electric vehicles, how will European OEMs compete against Tesla?
Norman: EVs go very well with tech, digital and innovation. Tesla is the category leader for EVs. It got that way because it started off as a digital software company that was interested in mobility. We’re helping our customers, including big OEMs, think less like manufacturers and more like software companies. And they’re committed to the transition. For example, the VW Group aims to derive 30% of its income from digital services by 2030. I think companies like Valtech Mobility are important not only for helping them achieve that aim but also for changing the culture of the organization to align with the values of tech, digital and innovation.
Daniel: This must involve reimagining the personal vehicle…in some way.
Norman: It might be an exaggeration to say that in the future cars will be like smartphones with wheels, but there’s something in it: the vehicle as a new connected device within the consumer’s hand.
Daniel: What do you mean that the vehicle becomes a way to advertise to customers?
Norman: One has to be careful with that; screens distracting the driver with advertising are potentially dangerous. But when you consider that there is no other device that collects as much data as the personal vehicle, there is surely an opportunity for smart marketing. For example, if your data shows that a driver is doing a lot of night driving in remote areas, then offer them a subscription to night vision features embedded in the vehicle.
Daniel: But with autonomous vehicles, on-board advertising is no problem at all.
Norman: AVs are still five to ten years away from being widely adopted. But I wish they would come sooner. Later today I have a meeting in a neighboring city. I am driving myself, which will be the quickest and most convenient way to get there door-to-door. But it would be a totally different experience if the AI was driving me. But I am excited by the work Valtech Mobility is doing in terms of AI and AVs. One of our projects at the moment involves reimagining the vehicle cabin.
Daniel: Digital leads to disintermediation; and this will surely impact how vehicles are sold and used.
Norman: By building a user-friendly online environment, carmakers can ensure a great customer experience, without the need for distributors and for shopfloor space. Car buyers are showing a willingness to splash out on a new car, without ever having seen it in the flesh. Then there is also the subscription model of ownership, which has the potential to save the user money and improve the overall utility of the vehicle, with knock-on resource reduction environmental benefits. We will certainly see these different business models—driven by digital innovation—grow in the coming years.
Daniel: Any final thoughts on the future of mobility going forward into a subscription model?
Norman: From my perspective, the car is a one size fits all solution so when I don’t have an adequate mode of transport, I need to use my car. If something comes up in Berlin, I need to drive from my hometown. Preferably, I would be able to take several modes of transport seamlessly but we’re not quite there yet. My ideal approach would be an autonomous vehicle that can deliver me to work essentially so I can spend the 6 hours more efficiently. However, we must remember that car ownership is not ecological and even a less than ideal subscription model is always going to be more ecological than owning a car that’s going to sit in a parking space 90% of the time.