Carmakers’ connected car services face being left behind if they don’t open up like the smartphone industry, according to research from Capgemini Invent.
The ‘Connected Vehicle Trend Radar 2’ report, which included a survey over 3,000 consumers worldwide, found that close to half (44%) of global customers do not yet have any connected services in their cars and only 51% of those that do are frequent users.
Capgemini Invent said this means carmakers have yet to penetrate the connected services market effectively.
Many vehicles are compatible with connected services like Apple CarPlay and Android Auto, which effectivley replaces a carmarker's infotainment system with something more familiar to smartphone users.
However, Capgemini Invent's report said that if people are already using third-party applications from major tech players, making these features even more accessible through their vehicle’s interface is key to bringing customers, and their data, back into the fold.
Dr. Rainer Mehl, managing director of manufacturing, automotive, and life sciences at Capgemini Invent, said: “Manufacturers today are burdened by legacy and tend to assume that connected services can be delivered in exactly the same way that cars are produced — by simply assembling elements from suppliers instead of working as part of an ecosystem with best-in-class partners.
“But losing market share in connected services means missed revenue, or worse, potentially becoming a supplier to tech companies."
The value of connected services
The number of connected cars is set to increase to 352 million by 2023, compared with 119.4 million connected vehicles in 2018.
This growth will come to be associated with a rapid proliferation of data that can be monetized to help reduce costs, optimize R&D, products and services, and limit emissions.
However, Capgemini Invent said to gather enough data to stay ahead, carmakers need a sizeable customer base in comparison with their tech competitors, and at present, usage levels are insufficient.
Traditional manufacturers need to ensure they are targeting consumers with the services they want: out of 23 use case categories investigated in the report, safety and security-related services are valued most while in-car delivery and commerce the least.
Current consumer willingness to pay for these connected services is relatively low in all categories – 39% of consumers stated that services are useful but not sufficiently developed, while another 23% were unaware of their benefits. Education will therefore play a big role in making connected tools a unique selling point.
Connectivity is a green enabler
Sustainability is becoming an increasingly important aspect of the connected services portfolio for consumers.
Overall, 60% of respondents believe connected services can have a positive impact on the environment: in China specifically, 77% of people are willing to pay more for connected services targeting sustainability, while in Europe, 42% of car owners say they’d be willing to change their car brand if they knew that other brands offered sustainable connected services.
According to the report, connected services don’t just offer a wide range of untapped opportunities for traditional auto players — they’re critical.
Digital players have recognized that a car is just another entity in a consumer’s digital environment.
In order to boost customer loyalty, the driving experience needs to merge seamlessly into a person’s digital life.
Before, the relationship between manufacturer and consumer was rarely as strong post-purchase, but now users are increasingly becoming a manufacturer’s strongest asset for the future. This requires carmakers to act quickly to provide services that customers value and use.
Carmakers must establish their place in the connectivity ecosystem
Carmakers typically outsource activities that are beyond their core competencies and have applied a similar approach to connectivity.
These connected services cannot usually be updated once the car is on the road; worse, the services currently available vary widely from model to model within a given car manufacturer's range.
Rainer concludes: “In the past, drivers had to make do with what they were given by manufacturers, but this monopoly no longer exists.
"Tech companies successfully entered the space with smartphone services and easy connections towards the car.
"Now OEMs need to work harder to stay relevant — especially as customers become increasingly unwilling to accept connected services that are not current or fall short of the premium.”