As Detroit And Silicon Valley Compete For Automakers' Business, LA Is The Real Hotbed Of Innovation

The nascent tug-of-war between Detroit and Silicon Valley over where to develop vehicle technology evidences the fragmented nature of the car business right now. But it’s actually the City of Angels that’s taking the first big leap into the future.

As automakers shift their focus to the future of driving, from ridesharing to infotainment, the traditional blueprint for unveiling significant concept cars and models at big auto shows grows increasingly less relevant. Although reluctant at first, executives are finally realizing that talking about “driving” doesn’t resonate with younger consumers. Instead, they need to frame the conversation around “mobility,” a catchall word for ridesharing, infotainment, and autonomous cars, among other tech advancements.

That means that instead of forcing cars upon Millennials who don’t want them, car companies are now going to the crowds. This year, for example, several carmakers made their big debuts at CES, the annual consumer electronics show in Las Vegas in January, one week ahead of the North American International Auto Show in Detroit, the industry’s backbone for generations.

Recognizing the shift of power from the engineers in Detroit to the programmers in Silicon Valley, the 109-year-old Los Angeles Auto Show is the first of the large auto shows to rebrand itself as a fun, Millennial-friendly destination. This year, it’s combining the pre-show press and trade days with its four-year-old Connected Car Expo into a four-day event called AutoMobility LA. That’s a smart move for a business still based on a dwindling consumer market as more young adults eschew driver’s licenses.

Held from Nov. 14 to 17, AutoMobility LA will bring together carmakers, tech companies, entrepreneurs, designers, developers and investors to discuss the future of transportation. The event will include more than 50 product debuts from around the world. ANSA, which owns and produces the show, has already gotten buy-in from the carmakers; Ford President and C.E.O. Mark Fields will give the keynote address on Nov. 15.

The LA Auto Show isn’t the only car-related business running to catch up with the future. Automakers have stepped up this year to make major investments in the tech startups and rideshare companies that seem to represent the future of driving.

Yesterday, Toyota announced it has invested an undisclosed amount in Uber and will offer Uber drivers an option to make payments with their earnings if they get a new Toyota. Volkswagen also said yesterday it’s investing $300 million in Gett, a startup ride-hailing company that’s popular in Europe.

Earlier this year, General Motors GM +0.31% invested half a billion dollars in Lyft, while Ford is pursuing mobility initiatives of its own.