An estimated 470m connected vehicles will be on the road globally by 2025, and automakers are looking for new ways to better manage – and monetize – the data explosion set to follow.
It’s not just automakers that see the possibilities: 37% of respondents in a McKinsey survey said they would switch brands to gain improvements in connectivity. Thirty-nine per cent said they were interested in unlocking additional digital features after purchasing a vehicle – rising to 47% for customers of premium brands.
Software-defined cars and the next generation of electric vehicles (EVs) are already here, with powerful on-board processors and a growing customer base ready for new, enhanced services and driving experiences. With the global connected car market projected to grow to $191bn by 2028, and vehicle data monetization expected to reach anywhere from $80-800bn by 2030, how can automakers make the most of the opportunities?
Succeeding in a software-defined world
According to Cap Gemini research, the next generation of vehicles will provide up to 10,000 data points – from breakdown information to doors, windows, fuel, lights, navigation, warning systems and smartphone applications.
This constant stream of data means automakers are uniquely placed to have an always-on stream of user feedback and usage patterns – which, in turn, allow OEMs to constantly improve products and services. As Cubic Telecom CEO Barry Napier puts it, this data not only represents an opportunity to extend the customer lifecycle far beyond the production line or showroom, it’s also an opportunity to refine the customer experience in ways that will drive brand loyalty and differentiate against the mainstream tech players. Data is the automakers’ opportunity to own the customer experience and the ecosystem behind it. Some examples include:
- Lifecycle monetization: Extend the lifecycle past the production line, out of the showroom and into a whole new aftermarket.
- Subscription models: Subscription models are emerging in response to changed use patterns – McKinsey predicts that subscriptions will account for 20% of retail financing revenues in the European auto market by 2025.
- Enhanced insights: Enriching vehicle data with other sources of business insights, from customer to third-party data, will enable OEMs to build more valuable data-driven services and lead with personalisation and other customer-centric offers.
- Premium mobility services: Premium infotainment, feature upgrades and enhancements, service unlocks, premium ADAS packages, advanced safety or navigation features are all part of an ecosystem of recurring interactions that will increase brand loyalty. The pivot towards a subscription model underlines the importance of taking a lifecycle approach.
- Car-as-wallet: A new generation of customers will expect to switch seamlessly from their smartphones to the car. Increasingly, that means in-car purchases and in-vehicle shopping, whether it’s paying for fuel/charging, tolls, ordering food or streaming content, customers will expect to be able to do it effortlessly.
- Innovation at pace: In a software-defined development environment, it’s possible to bring services from idea to integration in months rather than years.
Content is king but local trumps everything
At the heart of all of this is localisation. As premium mobility services are rolled out, automakers can take control of the opportunities by taking ownership of the customer experience. And the key to doing that is putting the right service, in the right region, localised – not only that, but ensuring that experience is consistent even if the car is driven into a different country. For example, a survey by Vericast found that 50% of respondents would like to stream content during long distance trips; when travelling to a new destination, 78% want to receive restaurant recommendations. How automakers manage those expectations – providing a relevant streaming experience combined with a local, personalised recommendation service – is where the real opportunity lies.
Key to getting that right will be managing the complexities of both connectivity and regional regulatory requirements. Add in the need to differentiate between data and billing for, say, assisted driving functionality versus infotainment services and there’s a lot to consider.
Vehicle-as-a-platform – a new, mixed ecosystem
Connected vehicles are challenging the automotive industry to evolve into new business models where software and services are at least as important as the vehicle itself. It’s not just about sensors – there’s a whole set of cultural changes taking place around everything from how we travel to how we expect to stay connected when we travel, and which services and content we expect to access while we travel.
As the automotive industry pivots into a car-as-data platform, OEMs will increasingly integrate data into the development process to solidify customer loyalty through intensely personalised experiences.
Connected software driving performance
Cubic Telecom helps some of the world’s leading automotive brands to manage and deliver premium mobility services anywhere in the world – simply and effectively. Our connected software solutions maximise customer lifetime value by providing insights, analytics, visibility and connectivity across any device, globally. To learn more about how Cubic helps automotive OEMS to take ownership of the in-vehicle experience and fully realise the opportunities connectivity brings, download our eBook 7 Revenue Opportunities Carmakers Can’t Afford to Miss now.