The auto industry remains secretive and competitive, so it's no surprise that few people know some of the world's major automakers have...

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SAN JOSE, Calif. — The auto industry remains secretive and competitive, so it’s no surprise that few people know some of the world’s major automakers have clandestine labs in Silicon Valley. Inside, they’re developing technologies that might appear in tomorrow’s cars and trucks.

Most of the work is hush-hush. But German automaker Volkswagen recently offered a peek behind the locked doors of its Palo Alto, Calif., lab.

Inside, engineers are creating dashboard instrument panels that change on command to instantly offer needed information. They’re perfecting auto glass that goes from clear to dark in two seconds. They’re working with local companies like Palm to connect smart-phones to the car via Bluetooth to allow drivers to make calls using verbal commands or the car’s buttons. And those are only the projects they can talk about.

“The basic idea is to bring the Silicon Valley to Volkswagen,” said Carlo Rummel, executive director of Volkswagen of America’s Electronics Research Laboratory. That’s why his lab is full of local hires, not German engineers shipped in on temporary assignments.

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Other automakers — BMW, DaimlerChrysler, Toyota, Honda and, soon, Nissan — have research-and-development labs in Silicon Valley. But VW’s lab is now the most visible, thanks to the recent announcement of its work with Stanford University to create a driverless car to compete this fall in a federally sponsored 175-mile race across the Southwest desert for a $2 million prize.

To some, VW, with its iconic Beetle, remains a snapshot of the ’60s, but the brand is Europe’s biggest automaker. It ranks No. 4 worldwide, and was the top European brand among U.S. buyers until a three-year sales slump put it behind BMW in 2004.

The Volkswagen Group sells brands such as Audi, Bentley, Lamborghini and others. Even VW, the brand created as the people’s car, has moved upscale in recent years, adding a sport-utility vehicle that costs as much as $45,000 and a luxury sedan that sells for nearly $100,000.

With those high-end cars, and the demands of today’s drivers who embrace increasingly complex consumer electronic devices, more and more technologies are hitting the road.

For Volkswagen, that involves working with such universities as Stanford and University of California, Berkeley, and with big local companies and small startups.

The lab opened in Sunnyvale, Calif., in 1998 with a staff of five. After VW management decided it needed more of what Silicon Valley has to offer, it moved in 2002 to a larger facility in Palo Alto, and now employs 38 people.

The goal is to test prototypes of technologies likely to be in cars in the next few years. It also can mean researching technologies that are five to 10 years away from production application. And there’s still room to explore far-off technologies that are 10 or more years away.

“What differentiates us is that we have a garage,” said Cedric Dupont, a research engineer at the lab.

The facility includes an electronic lab that’s full of oscilloscopes and other measurement equipment, as well as a machine shop with a lathe, a laser cutter and mills for making parts. Then there’s the garage that looks like a high-tech workshop with toolboxes, shelves of equipment and room for four vehicles.

With each new technology comes promise and potential for problems. Adding more electronics to a vehicle could distract a driver, which is why the VW lab has a driving simulator that allows them to test new technologies and their impact.

Dupont said: “You can write a lot of presentations. You can do a lot of paperwork and research. But building things up, that’s where you learn and where you realize if your idea was worth anything, or it’s just a pipe dream.”