The consortium, which goes by the techno-laden name of Dynamically Self-Configuring Automotive Systems, will use the funds to design an automobile that, among other things, can self-diagnose and fix its own faults, upgrade its own computer software programs, and interface among a driver's cell phone, personal computer, and satellite navigation system.
I believe it's less important that the consortium received the money and more insightful to know that Volvo and DaimlerChrysler are aggressively pursuing technological advances. Moves of this sort will allow the two companies to keep pace with, and possibly surpass, competitors such as Toyota (NYE: TM), Honda
For instance, self-diagnostic technology could significantly cut down on operator-maintenance costs by allowing customers to identify problems before they arise and become major expenses. Similarly, new wireless technology could allow consumers to receive software upgrades via Wi-Fi hot spots without their ever knowing about it.
Such an advancement doesn't sound that special until one considers a few things: It will save the owner a trip to the dealership to receive the new program, and if the program helps the car run more efficiently, it could increase the car's performance and save the owner some nice money.
It is, however, the interface among the automobile, mobile devices, and satellite system that I believe offers the most value. Such a system has the potential to provide consumers with an almost unprecedented level of convenience.
Among the things such a system could do is take a voice command like "Take to me Joe's house" from its owner. The system would automatically download Joe's address from a PDA and, without the need for anybody to enter any coordinates, direct the driver to the destination. Another useful application would be to use such a system to avoid traffic jams and find the quickest and most efficient way to get from one point to another.
If the consortium can succeed in making a smarter car, it could also make Volvo and DaimlerChrysler more attractive long-term investments.
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Fool contributor Jack Uldrich just wants a car smart enough to tell him when the milk in his kids' sippy cup is about to spoil. He does not own stock in any of the companies mentioned in this article. The Fool has a strict disclosure policy.