Porsche Rolls Out Board-Approved Privacy Strategy

‘Privacy Mode’ menu in luxury Taycan models lets customers give and withdraw their consent for Porsche to process their data.

mployees work on the body shells of all-electric Porsche AG Taycan luxury automobiles on the production line inside the company’s factory in Stuttgart, Germany, in 2020.

STUTTGART—German car maker Porsche is developing fine-grained privacy settings for its luxury cars as part of a new strategy to expand customers’ trust.

Porsche now lets drivers stop sharing their personal data with the company altogether, as part of a board-approved departure from how auto-industry rivals treat driver information.

Porsche’s global privacy plan emphasizes driver controls as well as transparency about why the company seeks specific information, how long it is retained and which business partners may access it. The sports-car brand, part of the Volkswagen AG group, wants to customize services for drivers, said Christian Völkel, Porsche’s chief privacy officer. Drivers can view details including their car’s electric charge level and statistics about previous trips on a mobile app, if they consent to having their car data collected.

“It’s not our business to sell data and to make money out of the data of our customers. It’s our business aim to make better services and products out of the data,” Mr. Völkel said.

Through a “privacy mode” menu on the dashboard, customers can give and withdraw their consent for Porsche to process their personal data, or to share it with third-party suppliers, as frequently as they want. That feature is different from many other companies’ settings that may ask customers only when setting up their profile if they want to share their data, and don’t provide a menu where they can review their choices anytime, Mr. Völkel said. “You won’t find so many services of big providers where you see the duration of how long the data is being processed and stored,” he said.

A single setting stops all personal data collection, Mr. Völkel said. Customers can save their settings using their Porsche ID to register preferences in cars and mobile apps. Users can automatically apply the same privacy settings when renting a Porsche while traveling, he said.

Modern cars collect significant amounts of personal data about drivers’ preferences. The 2021 global market value for connected vehicle data is estimated at around $17 million, of which $2 million is personal data and $15 million is aggregated, anonymized data, according to research firm Gartner Inc.

That figure will grow to around $11 billion world-wide by 2030, with $9 billion of that in personal data, Gartner said.

Car makers and other companies including telecoms firms have started partnerships to profit from data by offering customers services such as detailed traffic, weather or entertainment systems. Some companies sell anonymized data to other businesses over digital marketplaces, aiming to cash in on driver data after they strip away personal details that could identify individuals.

In Europe, turning car data into a service comes with legal risks: Several privacy laws, including the strict General Data Protection Regulation, require companies to obtain permission from customers if their information will be used for a particular service.

Privacy-minded drivers might opt out of services that could reveal where they drive or park, for example, and privacy advocates have criticized GPS tracking in internet-connected cars. In 2020, the European Data Protection Board, the umbrella group of regulators from European Union countries, recommended increased privacy measures for car makers including advanced encryption for biometric data.

Getting proper consent is tricky, said Stefan Brink, the privacy regulator in Baden-Württemberg, the southwestern region where Porsche is based. Car companies need to be able to differentiate between the various drivers using the same vehicle. And a single driver might have different preferences depending on the kind of data and where that data goes, he said. Sharing information with an infotainment provider might be fine, while recording details about driving style and speed isn’t, he said.

A car, he said, can let companies “get very closely inside their private lives,” Mr. Brink said.

At Porsche, Mr. Völkel’s team of privacy experts has been working with Mr. Brink’s office to understand a new privacy law that took effect in the region in December. Companies that operate websites and telecommunications services such as smart devices and connected cars must seek consent for every service they offer that uses personal data.

Mr. Völkel showed the regulator Porsche’s privacy menus in its cars and apps, and sought advice on how the company could comply with consent rules but not overwhelm drivers with privacy questions every time they got behind the wheel.

The company’s board in 2021 approved 18 privacy-related goals that focus on Porsche’s principles, targets and privacy organization, a spokesman said. One goal specifies that privacy is part of the customer experience, and Porsche will provide “convenient privacy-related services to the customer, allowing individualized configuration of their privacy,” he said. The company’s global data privacy strategy is in part based on a customer survey begun in Germany in 2019. Porsche is preparing to poll customers in the U.S. and China.

Porsche’s detailed approach to managing consent and its pledge not to focus its business on profiting directly from driver data set the company apart from rivals, said Stefan Hessel, senior associate and co-head of digital business at German law firm Reusch Rechtsanwaltsgesellschaft mbH. “For many [manufacturers], the vehicle data becomes more important and becomes part of the business case,” he said.

Still, the company needs data, especially as it develops autonomous vehicles. Porsche is working with Volkswagen’s automotive software subsidiary Cariad, which is partnering with automotive supplier Bosch Ltd. to develop self-driving technology that is suitable for mass production. Such artificial-intelligence systems use large amounts of data to train algorithms, so Porsche’s initiative to gain drivers’ trust and coax them to share information, with safeguards, is important, Mr. Völkel said.

“There are no innovations without data,” he said.

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