An estimated 470 million connected vehicles will be on the road globally by 2025, and automakers are seeking new ways to manage and monetise the resulting data explosion.
It is not just automakers that see the possibilities: 37% of respondents in a McKinsey survey said they would switch brands to gain improvements in connectivity. 39% said they were interested in unlocking additional digital features after purchasing a vehicle – rising to 47% for customers of premium brands.
Software-defined vehicles (SDVs) and the next generation of electric vehicles (EVs) are already here, with powerful on-board processors and a growing customer base ready for enhanced services and driving experiences. With the global connected car market projected to grow to $191 billion by 2028, and vehicle data monetisation expected to reach anywhere from $80 billion to 800 billion by 2030, how can automakers capitalise on these 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, allows them to constantly improve products and services. As Cubic3 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 an opportunity to refine the customer experience in ways that will drive brand loyalty and differentiate against the major instream tech players.
Data is the key for automakers to own the customer experience and the ecosystem behind it. Some examples include:
- Lifecycle monetisation: Extend the lifecycle beyond the production line, out of the showroom, and into a whole new aftermarket.
Subscription models: New subscription models are emerging in response to changing use patterns – McKinsey predicts that subscriptions will account for 20% of retail financing revenues in the European auto market by 2025. - Enhanced insights: Combining vehicle data with other sources of business insights, like customer to third-party data, will enable manufacturers to build more valuable data-driven services and lead with personalised and customer-centric offers.
- Premium mobility services: Offering premium infotainment, feature upgrades, service unlocks, advanced safety or navigation features, and more as part of a recurring interaction model will increase brand loyalty. The pivot towards a subscription model underscores 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. 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.
At the heart of this transformation is localisation. As premium mobility services expand, automakers can take control of the opportunities by taking ownership of the customer experience. The key is delivering the right service, in the right region, with localisation at the forefront – ensuring a consistent experience 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. Managing these expectations – by 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. Differentiating between data and billing for numerous services, like assisted driving versus infotainment, is just one of the many challenges automakers will need to navigate.
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 just as important as the vehicle itself. It’s not just about sensors – there’s a whole set of cultural changes taking place, 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 shifts into a car-as-data platform, producers will increasingly integrate data into the development process, ensuring customer loyalty through highly personalised experiences.
Connected software driving performance
Cubic3 helps some of the world’s leading automotive brands to deliver premium mobility services simply, effectively and globally. Our connected software solutions maximise customer lifetime value by providing insights, analytics, visibility, and connectivity across any device worldwide. To learn more about how Cubic3 helps automotive manufacturers 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.
