German auto chief Bernhard Mattes on what’s “driving tomorrow” at IAA 2019

The head of the world's biggest auto show sees an industry transformed

By | 4 minute read | August 30, 2019

At the world's largest auto show, crowds packed the halls for IAA 2017. Photo via VDA

Every other year, the automotive industry gathers in Frankfurt, Germany, for IAA, the Internationale Automobil-Ausstellung. Considered the world’s largest auto show, this year’s edition (Sept. 12 to 22) may be one of the most consequential gatherings in a decade as the automotive industry tackles a host of new challenges.

Tech upstarts and an aging workforce are inspiring new processes and partnerships. Economic and political uncertainty are creating new business pressures, as well as opportunities. Transformative technologies—5G, IoT, automation, autonomy, electrification and cloud—are enabling new capabilities and new ways of thinking.

Who better to reflect on this moment than Bernhard Mattes, president of the VDA, the German Association of the Automotive Industry and producer of IAA. It is an industry Mr. Mattes knows well, having worked at BMW from 1982 to 1999 before joining the board of Ford Werke, which he chaired from 2002 to 2016. He recently sat down with Dirk Wollschläger, IBM General Manager for Global Automotive, Aerospace and Defense Industry, to discuss this crucial moment for automakers, and for the world.

The theme of this year’s IAA is Driving Tomorrow. What forces do you see driving the automotive industry tomorrow—and beyond?

We see two broad areas shaping the future of the industry. First, there are the aspects of climate protection, electric mobility and other alternative powertrains. Second, digitization, connectivity and automated driving will bring about a gigantic jump in efficiency, road safety and data protection.

As the auto industry is going through a period of transformation and disruption: What do you see as the biggest challenges in the next few years?

First and foremost, there are the climate objectives of the Paris Agreement. The German automotive industry is determined to contribute to achieving these objectives. Another challenge is that free trade is coming under increasing pressure. Active globalization is of crucial importance for the automotive industry. Three out of four passenger cars rolling off production lines in Germany are destined for export. We need modern free-trade agreements. And we don’t need more non-tariff trade barriers, we need fewer.

Are there other industries you think automotive could learn from?

Established companies have to think outside the box in order to grasp what the mobility of tomorrow has to offer. Therefore, many automotive companies are working together with tech companies to create the most innovative products. In this process, both sides can learn a lot from each other.

VDA president Bernhard Mattes discusses IAA 2019 with Dirk Wollschläger. Photo via VDA

The IBM booth at IAA 2019 is part of the “New Mobility World”. How will new mobility concepts impact companies both in and outside the auto industry?

Since mobility is a crucial aspect of everyone’s everyday life, these new concepts will have far-reaching effects beyond our industry. Likewise, tech companies become increasingly involved in shaping the future of mobility. Companies will have to rearrange their portfolios so that they offer mobility solutions as well as vehicles, while embracing cooperation across industries

How do you see the demands of vehicle drivers or users changing in the next few years?

Globally, megacities emerge, and we observe rapid urbanization. This calls for smart mobility solutions. Urban populations desire more efficient routes, which can be enabled through multimodal mobility service platforms. The private car and mass transit will enmesh with new services like ridesharing, car-sharing and ride-hailing. At the same time, we should not ignore the necessities of rural populations. They are seeking new, flexible options while still depending heavily on individual mobility.

Crowds fill the streets of Frankfurt to see the latest vehicles at IAA 2017. Photo via VDA

What is the most important feature or service drivers will expect from automakers in the next few years?

Our goal of Vision Zero, a world with no traffic deaths, is inspiring many new features across connected vehicles for greater safety, efficiency, sustainability and comfort. For example, the highway-driving assistant reduces the strain on drivers. Digital route planning and parking apps cut down on congestion, while language assistants improve safety and convenience.

Which emerging technology, such as AI, Blockchain or quantum computing, would you see as a game changer in the Automotive industry?

All three are crucial, especially with the rise of digitization and connectivity. Whether it is in logistics, production facilities, data processing for networked and automated driving, or helping to connect different mobility services—all of these technologies will play an important role for innovation in the automotive industry In different and diverse ways, each technology will contribute to greater efficiency, safety, and data protection.

IBM’s Dirk Wollschläger asks Mattes how tech is transforming their industry. Photo via VDA

With the convergence of automotive and tech and the rise of mobility-as-a-service, where is mass transit headed?

The mobility of tomorrow will be intermodal and mass transit will be a central element of that. Let me give you an example: Commuters may drive to the city limits, then stop at an interchange and take mass transit to reach downtown, where they then walk or maybe use a shared bicycle or e-scooter. These different services will make mobility smarter and more individualized.

It seems the only thing changing faster than the vehicles is how they’re being made, so how do you see the industry addressing an aging workforce and growing skills gap?

Finding skilled workers must be made simpler. An innovative and strong industry requires qualified employees—both graduates and non-graduates. A wide variety of options are available for tackling this shortage. Appropriate education and training, improvement in work-life balance and eliminating barriers to bringing in trained specialists from other countries are all useful measures. Given that non-graduates are also urgently needed, consideration must be given to new ways of providing training courses for employees alongside their work and offering financial support.