AUTOMOBILE SPECIAL......... APPLE AND GOOGLE CREATE A BUZZ

APPLE AND GOOGLE CREATE A BUZZ @ FRANKFURT MOTOR SHOW   Along with Google, Apple has focused the minds of executives on the challenge posed by new technologies that have the potential to disrupt traditional auto industry hierarchies Whether or not Apple's secretive car project ever leads to an actual automobile, the technology company has already had a pro found effect on the vehicle business. The mere knowledge that Apple has a team of several hundred people working on car designs changed the conversation this week at the Frankfurt International Motor Show. Along with Google, Apple has focused the minds of auto executives on the challenge posed by new technologies that have the potential to disrupt auto industry hierarchies. This year,“connectivity“ has supplanted “horse power“ or “torque“ as the prevailing buzzword in Frankfurt. The talk is of self-driving cars, battery-powered cars and information technology designed to link cars with data networks to make driving safer and more efficient. Even though neither Apple nor Google is close to mass-producing a vehicle, nervousness about their intentions -which remain cloaked in mystery -is understandable. As cars increasingly become rolling software platforms, Apple and Google have depths of tech expertise that the carmakers would have trouble duplicating. And those Silicon Valley companies have financial resources that dwarf those of even behemoth companies like Daimler and Volkswagen. Google, which began working on self-driving cars in 2009, is valued by the stock market at more than five times the worth of either of those carmakers. Apple is worth eight times as much.That gives them an advantage in a business that requires huge investment in research and development. The main risk for carmakers is probably not so much that an Apple car would destroy MercedesBenz or BMW the way the iPhone gutted Nokia, the Finnish company that was once the world's largest maker of mobile phones. Rather, the risk is that Apple and Google would turn the carmakers into mere hardware makers -and hog the profit. Carmakers say they are determined to resist that danger by maintaining control of the software that is proliferating inside vehicles. “What is important for us is that the brain of the car, the operating system, is not iOS or Android or someone else but it's our brain,“ Dieter Zetsche, the chief executive of Daimler, the maker of Mercedes vehicles, told reporters at the car show.IOS is Apple's operating system for mobile devices. “We do not plan to become the Foxconn of Apple,“ Zetsche said, referring to the Chinese company that manufactures iPhones. Even without competition from Apple and Google, the carmakers are under extreme pressure to change the way they build cars. Regulators in Europe and the United States are demanding that cars emit less carbon dioxide, a culprit in global warming. The only way the automakers can meet increasingly stringent emissions standards is by selling more hybrid vehicles, and eventually all-electric cars. Both technologies require more software than gasoline or diesel engines. “What has been an evolution is going to be a revolution,“ said Stephan Winkelmann, the chief executive of Lamborghini, the Italian maker of super sports cars that is part of the Volkswagen group. “Starting from sustainability, going over to digitalisation, and ending up at autonomous driving -these three big things are really something that is a game changer for the automotive industry,“ Winkelmann said in an interview. “Everybody has to tackle these challenges.“ Volkswagen, previously regarded as a laggard in vehicle electrification, said in Frankfurt this week that it would introduce 20 new plug-in hybrid or all electric models by 2020, and it introduced a battery-powered Porsche concept  car. At the company's preshow extravaganza for the media on Monday night at a repurposed basketball arena, there was nary a mention of internal combustion. Instead, Martin Winterkorn, the Volkswagen chief executive, spoke of cars that would park themselves and eventually run completely on autopilot. “By the end of this decade we will have transformed all of our new cars into  smartphones on wheels,“ he said. One of the main guessing games at the auto show was whether Apple or Google would ever build a car. Both companies have met with German car companies as well as suppliers. Google executives have said the company will not become a carmaker. “Google is not a car manufacturer and does not intend to become one,“ John Krafcik, a former Ford and Hyundai executive who runs Google's self-driving car programne, said in Frankfurt. But it was not clear yet whether he meant that Google would license self-driving technology to traditional carmakers, or use contract manufac turers to build a vehicle. A Google spokesman declined to elaborate. Apple's intentions are murkier. As is customary for Apple, the company has provided no information. But Timothy D Cook, the Apple chief executive, reportedly visited a factory in Leipzig, Germany, last year where BMW manufactures the i3, an all-electric sedan with a carbon fibre body. “We are not quite sure what Apple is prepared to do,“ Friedrich Eichiner, the chief financial officer of BMW, said during a meeting with a group of reporters in Frankfurt. He said he thought Apple was still trying to understand the implications of getting into the car business. While Apple and Google pose a threat to traditional automakers, the mood in Frankfurt is not gloomy. Not long ago, analysts were predicting that the auto industry faced long-term decline.Surveys showed that younger people were less interested than their parents in cars and driving. But if Apple and Google are interested in the car industry, auto executives reason, cars and driving must be cool again. “It's confirmation that we are working in a future industry,“ said Ola Kaellenius,  head of marketing and sales for Mercedes-Benz cars. Apple and Google have given the car industry a jolt. Now the question is whether Jack Ewing The New York Times  ET19SEP15