Carmakers will need to ensure their vehicles can connect to mobile devices and the internet if they are to survive, Daimler chief executive Dieter Zetsche said on Monday.
His comments came after Daimler's (Stuttgart, Germany) Mercedes-Benz said it would make cars compatible with new software developed by Apple (Cupertino, CA, USA), known as CarPlay.
Daimler will also be offering compatibility to Android-based devices, the company added.
"Virtually no product, including the automobile, is purchased or used in a vacuum," Zetsche said at a Daimler event in Geneva, on the eve of the city's motor show.
"We all know that the iPod for example, was not just a game changer based solely on design or technology. It is also about the convenient connection to iTunes," Zetsche said, adding that "customers are buying the total package."
Mercedes unveiled a new service brand "Mercedes me" which allows clients to gain access to a raft of mobility services including its car-sharing business car2go, or myTaxi.
It also allows people to find out where their car is parked or to book a service appointment using their mobile phone.
The offering is part of a raft of initiatives from carmakers aimed at using software to make their vehicles more appealing to drivers.
Ola Kaellenius, Mercedes-Benz board member responsible for sales and marketing, said Daimler wanted to get away from the idea that service only meant "maintenance."
"One important aspect here is that we no longer expect our customers to come and find us. We go and find them," Kaellenius said, adding a smartphone was one of the main ways to connect to them.
"As early as this summer, we will begin to equip our cars with the hardware necessary to connect them to our customers' digital life and make them virtually accessible, all the time and everywhere."
Separately, Daimler said global sales of Mercedes-Benz luxury vehicles had risen by a double-digit percentage in February.
"Our new products have played the major role in our growth plan," Zetsche said, adding that sales of a new generation of compact vehicles which includes the A-Class, had risen 64 percent compared with the year-earlier period.
(Reporting by Edward Taylor; Editing by Mark Potter)