The connected car market offers huge opportunities for both drivers and manufacturers. As the industry undergoes rapid growth, there is an increased need for dynamic and secure solutions.
Connected car trends influence and shape the state of the market but, as with any new sector, moments of growth can signal areas of concern.
Consumers and businesses must ask how these areas of concern can develop into areas of opportunity.
Safe driving incentives
Insurance companies have long been offering retroactive good driving benefits to customers but the connected car market will enable insurers to offer proactive safe driving incentives.
With in-car data and analytics platforms, insurers will be able to track drivers’ speed, routes, and distance. Advanced GPS trackers will allow insurers to compare speeds with geographic locations to determine driver behavior. Consumers could be enticed to track this data through gamified interfaces where they earn points for safe habits.
The opportunity is open for developers, OEMs, and others in the sector, but as more information is collected within the connected car it will be become critical to ensure the data is encrypted and kept secure.
Improved customer experience
The amount of data being collected means opportunity for the connected car market. A recent McKinsey report found that only 1% of collected IoT data is being used today. With all this unused data, there is much room for new opportunities for OEMs, connect car technologists as well as automotive assistant and app developers.
In the first instance, data can be used to proactively serve the driver’s needs. No longer necessary to wait for an indicator light to alert them of a problem, what apps will drivers need to see updates being applied in real-time or in a retrospective summary? And, what technology is required to ensure the data flows freely between connected points and the over-the-air firm updates are applied without interruption.
New revenue streams
Only 4% of today’s car lifecycle revenue is dedicated to connectivity features. By 2020, this figure is expected to grow to 7%, from EUR170 billion to EUR180 billion.
These numbers reflect new and growing areas of revenue such as connectivity hardware, maintenance and insurance. Already, 35% of customers are willing to trade driving data for insurance benefits, opening opportunities for OEMs to tap into insurance revenue streams.
These opportunities will depend on the delivery methods and technology choices made. For OEMs, the focus should be on setting key differentiators such as human-machine interfaces, car condition data, and geo-information.