Automakers’ brands will take a backseat to new driving “experiences” as autonomous vehicles and car sharing become more popular, according to the chief executive officer of IBM.
In an interview with CNBC’s Karen Tso at the Frankfurt Motor Show Wednesday, Ginni Rometty said consumers are increasingly prioritizing digital experiences, for example the ability to connect a car to other smart devices, in their vehicles.
“The issue is that the experience is going to be more important than perhaps the car itself or just a brand and what it says,” Rometty said. “Your brand is defined by the experience.”
Rometty pointed to a new IBM survey which found 48% of consumers say vehicle brand won’t matter to them amid the rise of autonomous cars and ride-sharing platforms over the next decade. The survey also found that among 1,500 automotive executives, only 18% are operating on a “digital data platform today.”
Auto companies are making big investments in new technologies like autonomous and electric vehicles. BMW CFO Nicolas Peter told CNBC Monday these investments are creating an “add-on cost” that is challenging the broader automobile industry.
“This is now a world where you’ve got to be able to pull the innovation from anywhere and then make it look very seamless to whoever the person driving the car is,” she said.
As a data analytics and cloud provider, IBM has a big stake in the so-called digital transformation. IBM’s shares are up roughly 28% year-to-date.