Increasing customer need for connectivity is well recognized
by the Indian auto industry. A Connected Car therefore has become a key
experience factor that has to be delivered to the customer along with the
product. Indian auto OEMs intending to pursue this inevitable industry trend,
however are confronted with some basic contemplation.
1. Is there a Business Case to this investment?
It is hard to quantify the magnitude of direct/indirect
benefits from a connected cars initiative and formulate a solid business case
for this investment. There is however enough opportunity for auto OEMs to
monetize the data received from connected cars. Enhanced service revenue
through malfunction detection & service reminders to the customers, cost
savings by capturing vehicle performance as input to warranty and R&D teams
and potential sales push by offering an enhanced customer experience with a
whole range of connected cars functionality are just a few examples that could drive
value for the auto OEMs.
As custodians of the car probe data the OEMs also have
opportunity to monetize it by sharing anonymized data with partners like map service
provider who could possibly enhance their live traffic navigation service,
mobile network operators to help them spot issues with their network and other
third parties like traffic police who can leverage this data to improve traffic
management.
2. Is there a matured partner ecosystem which
can build and run a connected cars service?
Connected cars solution typically encompasses a relatively
large ecosystem of partners. The IOT (internet of things) platform provider,
telematics device manufacturer, map services provider, mobile network operator and
the overall system integrator (to develop customer facing applications and
integration with enterprise systems) are key players of a connected cars
solution ecosystem. Dependence on multiple partners with no single one offering
end to end solution capability increases complexity for the auto OEMs.
Auto OEM’s are progressively engaging with single partner
who bring with them relevant implementation and run experience of a connected
cars service. Large system integrators offering a reliable inhouse IOT platform,
and who can partner with other solution providers to offer an end to end
solution are increasingly becoming a choice as a single solution implementation
and partner.
3. Is there enough consumer readiness to adapt
and use the connected cars solution?
A connected car offering brings a whole gamut of features
including advanced navigation aid using weather and traffic data, remote
vehicle controls, emergency services in case of breakdown and crash and a whole
set of alerts for theft, tow away, overspeed, security etc. Institutions and
fleet owners use driving behavior data for monitoring and check the drivers
driving patterns.
Maximizing the solution adaption and its usage will be the key
to the success of a connected cars program. The endeavor of the OEM’s should be to scale
up the usage by continuously offering
new connected cars features offering safety, security and convenience to
the customer.
Cost recovery from customer for the connected cars service,
which currently is the key direct revenue source will increasingly diminish. Data
collection and its monetization through enhanced usage of the solution will
take priority over charging the customer for the services.
4. Is there an adequate Infrastructure to
support advanced connected cars features and enable the ecosystem to reap its
benefits?
The envisaged benefits of the future connected car can be
reaped with adequate vehicle to infrastructure interaction (V2I). Government
initiatives to integrate highway toll gates, electronic road pricing, charging
stations and emergency services will be a true manifestation of the benefits
from connected vehicles.
The auto industry is also seeking greater government support
for instance availability of radio frequency channels for v2V and V2I
communications for next generation connected cars and autonomous cars using
Advanced Driver Assistance System (ADAS) to function.
Conclusion: Key
considerations for your connected cars initiative
a.
Data monetization opportunities will take
precedence over direct cost recovery from customers for connected cars service.
Key is to achieve scale of solution usage and maximize data accumulation to
reap benefits from it.
b.
Organizations offering proven technology platforms
with an experience to implement and run such initiatives and can partner with
other solution providers to offer an overall solution will be partner of choice
to implement and run connected cars service for auto OEMs.
c. OEMS
will have to consciously work towards increasing the solution adaption and
usage by the customers through introducing new features offering safety,
security and comfort.
d.
Auto industry has to be future ready by keeping
an outlook on the next level of ADAS capability for connected cars and the
internal and external capabilities needed for it.
