Connected car services will become increasingly important to consumers as carmakers install more features into new cars.
That’s the opinion of Mohsen Mohseninia vice-president market development of Aeris an IoT technology consultancy. Speaking to TU-Automotive, Mohseninia told us that connected car technology is changing. He explained: “There are two types of connected vehicles. One, the after market connected vehicle where you get third parties providing little gadgets that go in the vehicle to collect certain vehicle data and run some analytics to support different business processes that comes up with a value to the consumer or the fleet owner.”
However, this business model has awoken the interest among many carmakers who see an opportunity to engage with consumers on a different and on-going level, said Mohseninia. “Increasingly, this is moving from an aftermarket business model to an OEM business model where they are embedding such complex technologies within the construction of their vehicles and providing value added services on top of the vehicle that they sell. There are a multitude of business reasons. Some are doing it because they lose market share because others have already started doing it; some are using it as brand enhancement harnessing the user experience; some are using it to justify a reduction in warranty decisions and holding back on financial numbers so there are a multitude of reasons. What we are sure of is that OEMs are heavily investing to make sure they have vehicles and assets that provide that connected service.”
Mohseninia said this move by the big auto players could have an impact on the challenge of getting consumers interested in using connected car services, something that has been patchy so far to say the least.
He said: “There are a lot of think rooms trying to come up with the answer to this question. What we see is that the connected car services initially have a degree of novelty to the consumer but ultimately they get tired of the novelty and end up hardly ever using the services. The value can be considered not that great and, as one OEM told me, we have to get to the stage where it is a requirement just as a consumer will not ask if a car has intermittent windscreen wipers because they expect them to be installed. So, more car buyers are expecting now to have the connected car facilities just in case they want to use them. We see this happening where the connected services are bundled as part of the car purchase for, say, one or three years in order to provide the value to the consumer in the hope they will continue to use the services after that initial free period.”
Mohseninia concluded that the drive to find revenues from connected car services could see carmakers taking a more holistic view of the sale of their products. “The other thing we have seen is the use of the connected car data in the vehicle and the monetization of that data for the B2B interactions for example to share the driver’s behavior with insurance companies. At the moment this is an aftermarket solution but it will, ultimately, be an embedded solution that OEMs will provide.”