Automotive, TIME February 2012

The Connected Car – Finally Coming True?

How OEMs Overcome Startup Hurdles and Achieve Competitive Advantage

The Connected Car – Finally Coming True?

The Connected Car – Finally Coming True?

The vision of the “connected car” or more general “connected vehicle” has been around for some time without significant impact in the industry.

Today however, the mobile internet is growing in importance and the topic is back on the agenda of the OEMs – but despite a more standardized and capable infrastructure, the key questions remain the same: What are the most relevant services for customers, OEMs, and other service providers such as banks and insurance companies? How to position and manage this complex ecosystem? And finally: How to generate revenues through ”connected vehicle” services?

1. Megatrends drive the connected vehicle

The car industry is facing significant changes: Besides the heavy competition and market saturation, e-Mobility and efficient use of natural resources are becoming ever more important and define the image of OEMs. These developments require new tools and technologies in order to work out. In addition, security-driven requirements (e.g. the ability to have a crash notification send to the police; e-Call) will be required by national legislation within the next few years, requiring connectivity in case of emergency.

Ultimately, the growing penetration of smartphones has educated the consumer to access information on demand wherever he is – the car is just another logical place where this information is created, used and stored (e.g. traffic congestion forecast, e-Mail checking etc.).

So, OEMs find themselves in a real dilemma. On the one hand there is a need for action to fulfill the requirements of the ecosystem on connected vehicles – on the other hand, still, there are no existing market models that have been successfully applied – be it with respect to customer acceptance, sustainability or willingness to pay.

2. Key questions for OEMs

OEMs have to answer a set of key questions to successfully realize the connected vehicle.

1. What are the most important use cases for the various user groups (e.g. driver and co-driver as private consumers as well as commercial fleet managers)?

The amount of use cases within the connected vehicle environment is manifold – ranging from services for the private and business car owners to fleet managers, insurance companies and the OEM’s after service. Therefore, it is essential that OEMs understand which services are relevant to which group and develop an adequate portfolio of services that build on a common infrastructure and can be seamlessly integrated into the according ecosystem requirements...

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