Intellectual Property Law

Detroit Hopes Online-Connected Autos Will Help Revive Lagging Sales

By IBLS Editor

Having recently announced that they are planning to shut down their factories for two weeks in reaction to slumping automobile sales, Chrysler is now planning to offer a car that comes ready with Internet access. While details are sparse on the exact methods the company plans to use, it has announced that the users will have to have already existent Internet service to be able to use the new feature. Sprint has also stated it is putting $5 billion into its network to develop wireless connectivity for users, or WiFi. Undoubtedly, Chrysler will use Sprint as part of their plan.

Chrysler, the third-largest U.S. automaker, has had many financial problems over the years and was even saved by the U.S. Government in a high-profile bailout in the late 1970's, aided by Motor-City legend Lee Iacocca. Recently, Mercedes-Benz purchased 80% of the Chrysler corporation in a move that many believed heralded the long-term success of the automaker. But after continued slumping sales, the Mercedes-Benz stake was sold to Cerberus financial at a substantial loss.

Frank Klegon, Chrysler's product development chief, says that the Internet option will be added to existing vehicles by dealers starting in 2008 and will also be installed on the assembly line to new cars. The innovation will allow passengers to surf and access the Web by using signals from mobile phone towers. Said Klegon, "We want to make the radio itself a WiFi port."

While the plan might seem like a publicity stunt to some people, the idea is actually bound to stir up enthusiasm in persons who regularly need to access the Net but have trouble finding log-on points, due to their travels. For example, a salesperson could pull off to the side of the road while covering their territory to connect to email, find product and customer information, and log into their company site to check supplies and log orders.

One problem that the plan will address is that there is much more cell phone coverage than wireless Internet in the States. Also, many motels and hotels still lack access for the Web. Also consider the fact that a great deal of entertainment is available on the Web, such as streaming radio. Further, it is becoming increasingly common for Internet users to have access remotely to their home computer or store their data in an online site. So a person in Witchita could be driving down the freeway while listening to the best of Elvis playing from their home computer, in theory.

Chrysler head Robert Nardelli recently announced an intent to allow customers the optimal amount of discretion in customizing their vehicles, and this fits in with that goal. The first vehicle to offer the service will be along with an ?off-road navigation system, chrome grille, heavy-duty bumper and a special sound system for  the Jeep Wrangler? line,  according to Nardelli who spoke at the New York International Auto Show. The customization plan will be directed through Mopar, a company that provides dealers with replacement and accessory auto parts. The idea is an attempt by Chrysler to save Mopar, who had considered selling the company in 2007. Added Nardelli, "We're aggressively moving to capture more of the customer service and parts business by focusing on what dealers need to increase their profitability.?

Chrysler hopes that becoming the first automaker to sell vehicles equipped with on-the-go access will help establish an image as a high-tech innovative corporation. BMW recently announced an in-car Internet access option, but these models will only be available at the end of 2008, and just in Europe.

Full post as published by IBLS Internet Law Blog on March 24, 2008 (boomark / email).