Interview: Wolfgang Reelitz, vice president Automotive Sales, TomTom
By: AWPresenter.com, Wednesday, August 10, 2011, AutomotiveWorld.com
Wolfgang Reelitz is TomTom's vice president Automotive Sales. His career includes over twenty years in the automotive Tier One business. Prior to joining TomTom in 2006, Reelitz worked in roles at Pirelli, Dunlop and BorgWarner that spanned engineering, programme management, marketing and sales. Since joining TomTom in January 2006, he has seen the company acquire TeleAtlas, and the SiemensVDO operation in Eindhoven. His current role sees him focus on all OEMs and Tier One suppliers based in Germany and Italy.
In an interview conducted by AWPresenter.com, the online conferencing division of AutomotiveWorld.com, to tie in with a recent webinar presentation, Reelitz discussed the journey TomTom has taken from being a provider of portable aftermarket devices to a Tier 1 supplier working increasingly closely with passenger car manufacturers.
AWPresenter.com: TomTom really made its name in the aftermarket first, and then made a transition into being an OEM supplier. What were the main challenges in this transition?
Wolfgang Reelitz: We started at the end of 2005 with semi-integrated PND (Portable or Personal Navigation Devices) which already had a high market visibility. Consumer-based products were applied to the automotive environment. We ran into a couple of interesting challenges from the outset. Firstly, timing, as the development cycles were fundamentally different. When the first car brochures were printed with accessory prices, the PNDs were typically already obsolete because the lifecycle was only between six and twelve months, whereas the OEMs' lifecycles were much longer. Both sides had to adapt to a completely new framework in order to create a real "win-win-win" situation. I say "win-win-win" because of strong end-user focus in line with the vehicle manufacturer and TomTom. Secondly, OEMs began to question whether they really need to define every technical detail from scratch, or whether they can take advantage of solutions in the market that are much easier to integrate and already widely accepted. There was a movement from both sides to overcome some of those hurdles, and creating a separate business unit within TomTom was a logical step towards becoming more independent. We create our own product solutions and maintain our own platforms in line with automotive players and car manufacturers, rather than consumer life cycles.
AWPresenter.com: Do you have to keep some element of distance between the OEM work and the aftermarket work?
WR: Yes, we have a very appealing business platform as we do not reinvent navigation every time for any in-dash solutions. We are always in a position to adapt a successful platform for an automotive in-dash environment. We can do that with different form factors and different hardware configurations, with different types of services, and fast time-to-market. As a consequence, we can offer solutions in roughly half the time of a traditional development period.
AWPresenter.com: As OEMs become more confident in your abilities, are they prepared to take more of a black box approach?
WR: We have gone on a journey with vehicle manufacturers, and the product side is just one aspect. OEMs need to also have faith that the service is robust and reliable. The acquisition of the SiemensVDO site in Eindhoven helped us because we were able to implement all those automotive OEM processes in a very short time in parallel with delivering the first high-volume in-dash project with Renault. Basically, we did that in just one year, and the ramp-up curve was extremely steep. We quickly shipped into ten Renault facilities, which was quite remarkable. The market quality has been very robust, with no issues in the field and many very happy end-users and a happy vehicle manufacturer as well.
AWPresenter.com: Can you give some examples of TomTom's activities with non-European customers?
WR: We are already supplying our solutions to Toyota and Mazda cars. TomTom also has very good relationships and contracts with Sony, for which we provide a module that we call a 'navibox' which is sold with a Sony head unit as an aftermarket system. Our relationship with Toyota and Fujitsu Ten started over five years ago. TomTom has entered a new collaboration with Sanyo using TomTom navigation hardware, software and services. It was first introduced in October 2010 for the Mazda5, and more cars will follow.
AWPresenter.com: How Has TomTom benefitted as a business from the involvement with OEMs?
WR: I think that high quality requirements in an automotive in-dash environment are not debateable because you have very different circumstances for an in-dash installation. We knew from the beginning that automotive quality would put specific requirements on the organisation. The automotive centre in Eindhoven gave us the knowledge and the skills in a very short time frame, and delivering the Renault project helped us put all those processes in place in a compressed time frame. We have been able to blend the Eindhoven group with its wealth of experience with the very young, creative software developers in Amsterdam who had been working on the portable market. That gave us a lot of synergies and fruitful discussions about our future direction.
AWPresenter.com: Can you please discuss how TomTom fits within the world of modular suppliers?
WR: We see many advantages in full end-to-end solutions, which include hardware, software, maps, and the entire connectivity, delivery and service part. The advantages that we see are first of all related to interfaces because they are defined, they are developed and they are managed from one source, and therefore work smoothly together. We also see benefits in terms of faster time to market. Ultimately, the end-user gets high value. There are not many industry standards that have been created quickly or widely adopted. Consequently, you have to deal with numerous proprietary interfaces that are typically complex to manage and add cost. The consumer derives little value from a variety of complex interfaces; so this is an area that we have cautiously taken on and it allows us a price point of below €500 (US$710) for the end user, including VAT, for fully connected devices with modem and SIM card.
We also offer certain key components, not just full end-to-end solutions, in case customers want to take responsibility for the full system functionality and integration.
AWPresenter.com: Has your warranty performance been within acceptable parameters?
WR: Yes, we have had no problems at all. The whole automotive line fitted in-dash experience started with Renault, where we really applied for the first time a full automotive specification. Our products have been very robust.
AWPresenter.com: If an OEM wants to impose its own functionality and character on the system, can it?
WR: Yes. Both sides have their pros and cons. Telematics is a very important strategic area for vehicle manufacturers, which typically want to retain control over such areas of crucial technology. Nevertheless, Renault, for example, was looking for a very successful and cost-effective implementation in a very short time frame. Our full end-to-end solution was therefore extremely appealing, enabling it to get to market quickly. Renault now has a navigation take-up rate of over 40%.
AWPresenter.com: Does this suggest that there was a huge potential market which OEMs have been slow to realise?
WR: There is indeed an untapped market. TomTom did not invent navigation in 2004. This technology was already around, but historically it was complex to use, very static, difficult to update over the lifetime of the product, and extremely expensive. It was more a niche product for people who had a need for navigation over long driving distances, but it was not really accessible to the mass market. This has fundamentally changed, and it will continue to grow. People will use navigation even on roads that they are familiar with for connected services such as traffic and others relevant for their journey and not only focused on the destination any more.
AWPresenter.com: The delivery of information into the vehicle via the cell phone network is quite slow. Do you envisage any step-changes in that area, for example in terms of mapping data being provided via the network rather than on the vehicle?
WR: Map data memory requirements will certainly increase, as maps will get more content. The current cell phone network is indeed too slow for a full map update in the car, so we will continue to see other mechanisms for now. With the Renault system, we are using an SD card and regular updates via a PC or laptop. This works very easily without giving the user any headaches. Some data standards that we will see going forward, like NDS, will provide a platform for incremental map updates. We will be less dependent upon high-speed networks because people may only want to update sections of the map that are relevant to them.
AWPresenter.com: What do you, or can you offer in the field of location-based services?
WR: The ingredients are in place. Several organisations are offering specific content data. On top, there is a mechanism to easily bring it into the car, as all cars will in future become connected, in our view. Through cloud-connected location-based services you can easily create relevant information and deliver it into the car with attractive network cooperation like we have with Vodafone. This includes the capability for billing. We will provide a stimulus to this growing market demand by providing hardware and software in a framework for applications that allows either TomTom or third party developers to provide relevant information to the car. It must be important, validated and should give you a better experience compared to no services. We have seen some powerful examples of how this third party approach can be adopted and how many advantages the end-user can get out of this. Some of the applications, however, such as traffic, will continue to stand out in terms of importance and we will continue to invest in this type of service ourselves.
AWPresenter.com: There is a great many parties to the emerging world of networked information provision into the vehicle. Do you have preferred partners?
WR: We are very open to different types of partnership, and we talk to many players involved in the telematics area. Exclusivity can restrict what you can do and how fast you can enter the mass market. TomTom has been quite flexible in terms of reaching different agreements. We think the crucial aspect here is that you always create a win-win-win situation for the end-user, your partner and also for yourself.
AWPresenter.com: Do you see electric vehicles driving the development of navigation and information systems, or will other traditional sectors be important?
WR: Telematics will play a crucial role for all EVs in our view, both plug-in hybrids and battery EVs. E-cars will become connected and that will provide a push. Telematics will provide information like range and estimated time of arrival, reducing driver anxiety. Better vehicle performance such as greater range will also help bring EVs out of the niche corner and make them more of a mass market proposition. Plug-in hybrids are a practical solution available today for those that might otherwise not use a full battery EV. Navigation plays a valuable role here in optimising the overall efficiency of the hybrid solution, by providing information on the road ahead. Elevation profiles and restricted areas, such as low-emission zones, can be fed to the vehicle management unit to decide when to optimally use the battery or the engine to gain the most efficiency.
However, as we have seen with Renault, many traditional users have become connected without EVs. There is room for further connected services, and some may not be connected to EVs at all. Furthermore, eCall will drive connectivity in the car and will provide a platform for further connected services.
AWPresenter.com is the online conferencing division of AutomotiveWorld.com. For more information, go to http://awpresenter.com/
Published on Wednesday, August 10, 2011
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