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Self-driving cars' problem (besides making them work): Too many players, not enough profit

For an detailed, interactive graphic about the many players in autonomous cars, click here. FRANKFURT/DETROIT — BMW and Daimler, the world's top luxury carmakers, have announced alliances with suppliers, talking up the virtues of having a bigger pool of engineers to develop a self-driving car. But another motive behind these deals, executives and industry experts told Reuters, is a concern that robocars may not live up to the profit expectations that drove an initial investment rush. Carmakers are increasingly looking to forego outright ownership of future autonomous driving systems in favor of spreading the investment burden and risk. The trend represents a clear shift in strategy from little more than a year ago when most automakers were pursuing standalone strategies focused on tackling the engineering challenge of developing a self-driving car, rather than on the business case. "Although it is a substantial market, it may not be worth the scale of investments currently being sunk into it," said a board member at one of the German carmakers, who declined to be identified because the matter is confidential. Dozens of companies — including carmakers and tech firms like Google and Uber — are vying for a market which, according to consulting firm Frost & Sullivan, will only make up about 10 to 15 percent of vehicles in Europe by 2030. There are sure to be losers. "It's impossible for me to believe there will be 50 successful autonomous vehicle software producers," said John Hoffecker, global vice chairman of Michigan-based consulting firm AlixPartners. In July last year, BMW became the first major carmaker to abandon its solo development of self-driving cars in favor of teaming up with chipmaker Intel and camera and software manufacturer Mobileye to build a platform for autonomous cars technology by 2021. The decision followed a trip by senior executives to visit startups and suppliers to gauge BMW's competitive position. "Sitting at other companies, one rattles off the technological challenges and safety aspects, and you come to realize that many of us are swimming in the same sludge," Klaus Buettner, BMW's vice president autonomous driving projects, told Reuters. "Everybody is investing billions.

Mercedes-Benz Concept IAA is a modern silver aero

While we English-speaking folk call it the Frankfurt Motor Show, our German friends call this week's bi-annual confab the Internationale Automobil-Ausstellung, or IAA. At first glance, then, you might think Mercedes-Benz named its Frankfurt concept, the Concept IAA, after the show it'd debut at. But, the Concept IAA isn't named for the show. It's actually an abbreviation for Intelligent Aerodynamic Automobile, and it's very aerodynamic indeed. This four-door coupe can transform, while moving, from its sedan-like design mode to an ultra-sleek, gas-powered fish of a car. This aerodynamic mode has a drag coefficent of just 0.19. That's sleeker than a Tesla Model S, and it ties the rating of the General Motors EV1 electric car. In fact, it's very nearly as aerodynamic as the Volkswagen XL1. The IAA can transform automatically at 80 kilometers per hour (about 50 miles per hour) or via the press of a button. When it enters an aerodynamic mode, eight segments at the back of the car extend out, adding over 15 inches to the overall vehicle length, effectively extending its already tear-dropped-shaped tail. And that's just the most visible aero aid. At the front of the car, flaps in the bumper extend out nearly an inch, while there's a smaller extender in the back bumper. These serve to keep air away from the wheel arches, where turbulence can become an issue. Of course, Mercedes has thought of this, too, fitting "Active Rims" that "alter their cupping from 55 mm to zero," whatever that means. There's even an active aero aid inside the front bumper, where a louver extends backward by 2.3 inches to smooth out the air traveling underneath the car. Outside of its super-slippery mode, the IAA is a relatively handsome four-door coupe, featuring the kind of plunging roofline that wouldn't look out of place on the company's pioneering CLS-Class. The interior is certainly worthy of the CLS, too. It's home to gorgeous white leather and touch-based controls, and in general, looks very luxurious. Mercedes' dogged pursuit of aerodynamics does not mean that the Concept IAA is some gutless ecomobile. Under the skin is a gas-powered, plug-in hybrid system that produces up to 279 horsepower and allows the sleek sedan to hit 155 mph. Its all-electric range is based, of course, on what mode its body is in. It's most impressive in aero mode, where it will cover 41 miles on a single charge. Switch over to design mode, and that figure drops slightly to 38.5 miles.

Mercedes expected to announce US HQ relocating to Atlanta today

Employees at Mercedes-Benz's US headquarters in Montvale, NJ, are set to gather today for the annual president's reception. Only this year, company chairman Dr. Dieter Zetsche is expected to fly in from headquarters to make a big announcement. That announcement, according to mounting speculation, is that MBUSA is moving to Atlanta. News of the potential move first broke around three weeks ago, suggesting that the German automaker was looking to relocate its US headquarters from New Jersey to somewhere in the South, with the Atlanta area tipped as the front-runner. Now sources are expecting that announcement to be made imminently. Although the specifics of the move have yet to be made public, Mercedes is tipped to be looking at moving into either a purpose-built facility or an existing office space in the Sandy Springs area, specifically near the intersections of Georgia 400 and Abertnathy, where UPS has its headquarters. The move is said to have hinged on a substantial incentives package worth nearly $50 million put together by the Georgia state government. The state of New Jersey is said to have offered similar incentives to keep Mercedes in the Bergen County borough of Montvale, where it employs 800 in its 141,000-square-foot office complex. One advertising company even put up billboards encouraging the company to stay, but if the reports prove accurate, it looks like their efforts may have been too little and/or too late. Mercedes wouldn't be the first automaker to move to the South, where numerous foreign carmakers have been also setting up factories. Toyota is also preparing to move its US headquarters to Texas, and though already based in Georgia, Porsche is preparing to move into a new $100 million facility, complete with on-site test track, closer to Atlanta's Hartsfield-Jackson airport that has grown into a major international hub. The move on Mercedes' part would put its US base of operations closer to its factory in Tuscaloosa, AL, and the port near Savannah, GA, from which it ships out the former's production overseas.