Volvo’s Roadmap to Digitalization
Each year, the average car owner spends 293 hours driving, 90 hours parking, and dozens of hours on fuel-ups and car washing. Swedish automaker Volvo is freeing up that time with Volvo Concierge Services, “the first expandable digital ecosystem that connects car owners with convenience services via a smartphone App.”
The Volvo Concierge Services platform enables users to smoothly coordinate with third-party providers to book services such as on-the-spot fuel-ups or car washing. When users request a Concierge Service, the provider will automatically receive the vehicle’s location, preferred service time, and a single-use digital key for access to the car.
Concierge Services was launched in 2016 as a feature of “Volvo on Call”, a smartphone app that offers remote assistance and other solutions. Volvo boasted it was the first and only automaker to address this drivers’ pain point and penetrate a space with huge potential: American drivers fill up their tanks over 44 million times each day.
The platform has received positive feedback thus far, says Volvo Cars Senior Business Developer of Cloud and IT Kristoffer Gronowski. Concierge Services’ adoption rate is now 6%, while the retention rate is an extremely high 53%. Gronowski is confident the company can scale the service to reach 30% of US Volvo owners.
Concierge Services is one of many steps Volvo has taken to ramp up its tech game. The company is also betting on self-driving technology, and is committed to producing fully autonomous highway-ready vehicles by 2021.
Last November, Volvo reached a US$300 million deal with Uber to provide the ride-hailing giant with 24,000 flagship XC90 SUVs incorporated with all necessary safety, redundancy and core autonomous driving technologies. This represents Volvo’s largest single vehicle order, and the largest in the autonomous vehicle industry’s history. Uber will develop a self-driving system based on Volvo’s vehicles, and assemble a commercial fleet for the San Francisco Bay Area.
Volvo’s aggressive moves and embracing of innovation seems something of a new path for the traditionally conservative automaker. Volvo Head of Asia Pacific Product & Offer August Wu says the company is working flat out to differentiate its brand from competitors: “We are designing new ways of thinking and innovating fast.”
The shift is also evidenced in Volvo’s recent hires. The company has lured multiple executives from outside the automotive sector, such as Chief Digital Officer Atif Rafiq, who built McDonald’s digital unit from scratch.
In 2016 Volvo established a Silicon Valley-based research center with 80 engineers focused on emerging technologies, digital development and R&D. The center, located across the street from Google’s offices, also coordinates joint efforts with local tech companies and startups — facilitating the Uber-Volvo partnership for example.
Volvo’s Silicon Valley center worked with Google to co-develop an Android-based in-car infotainment system offering Google applications. Android Auto will be available on new Volvo models in the two years, powering the main touchscreen displays and digital dashboard, and adding new services such as Google Assistant.
Last year Volvo acquired San Francisco-based car valet and concierge startup Luxe — valued at US$140 million according to Pitchbook — and incorporated it into the Silicon Valley center. Luxe Co-founder Curtis Lee is now Volvo’s VP of Digital.
Luxe has quickly integrated with Volvo’s digital products, especially Concierge Services, to provide a robust, algorithm-driven logistics and services platform to support Volvo consumer services. The Luxe platform now features mobile applications, real-time location-based monitoring software, a workforce management platform, a dispatch engine, and a algorithm-driven ETA (Estimated Time of Arrival) service.
The automotive industry will undergo revolutionary changes over the coming years. Volvo’s ambitious moves in this space are informed by a tech roadmap that’s all about innovation, digitalization, and staying ahead of the pack.
Journalist: Tony Peng| Editor: Michael Sarazen