Connected Cars and Their 'Ecosystem' To Change The Game For Automakers
Even though we're still in the earliest days of the connected car, a vehicle sold today with the latest infotainment and web-access features is already capable of generating more potential revenue streams than 10 traditional cars.
For representational purpose. (Photo: AFP Relaxnews)
From apps that automate the refuelling process to services for finding and paying for parking spaces before departure, the connected car, or at least the connected car owner is already opening up a wealth of opportunities for automotive brands to enhance what they call the "customer experience" and with it the amount of money they can earn on every new vehicle sold.
As such we could soon be drowning under the weight of digitally tacked on features.
"A car is no longer defined by its utility, it is defined by the experience it provides to the driver and passenger -- and that opens a tremendous pipeline for new revenue streams and business services," said Gary Silberg, Automotive Sector Leader, KPMG.
The firm's 2017 Automotive Executive Study, published this week, finds that even though we're still in the earliest days of the connected car, a vehicle sold today with the latest infotainment and web-access features is already capable of generating more potential revenue streams than 10 traditional cars.
In other words, it's going to be data -- how it's generated, how it's used and to whom it's sold -- that will drive car companies' balance sheets in the coming years. So much so that 71% of the 1000 leading automotive executives polled for the report said that measuring a car company's success on units sold is an out-of-date concept. All of which leads KPMG to conclude that data alone could generate revenues of over $1 trillion within the next decade.
"The game has changed for automakers, as cars have evolved into rolling computers and consumers have been quick to embrace autonomy, connectivity and mobility-on-demand," said Silberg.
Therefore it's no surprise that Volkswagen has stated clearly that it wants to have the biggest ecosystem of digital services and provisions of any car company in the world within the next 10 years. Or that FordPass, Ford's digital platform for planning routes, collecting loyalty points, paying for parking services and booking maintenance, is also being built into the same app that drivers use for locking and unlocking their cars.
As well as agreeing on data being the key to future profitability, 82% of executives believe that they will need to build an ecosystem and operating system, just like with a smartphone in order to maximize services and revenues -- an ecosystem will allow them to offer services from third parties while taking a share of any monies made.
All of which raises questions regarding data ownership and security.
"The massive amounts of data that is being collected presents a tremendous business opportunity for auto companies," Silberg said. "Addressing information security concerns is a critical priority for automakers, and one they cannot afford to get wrong."
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