Connected cars will create market worth €1 trillion

November 24, 2016

Connected cars will be at the centre of a products and services market worth more than €1 trillion by 2030, new research claims.

Cars are becoming much more heavily reliant on technology and the ability to communicate with their environment to share data and make sense of their surroundings.

This includes basic functions, such as drivers requesting information about the weather or downloading songs, but also extends to vehicles used within mobility schemes providing updates on their condition, location and use.

In future, fully-autonomous cars will rely on connectivity and data to learn about their environment as they drive through cities.

According to a new KPMG report titled ‘I see. I think. I drive. (I learn)’, in-car technology and the data it generates will transform the nature of car manufacturing.

Gary Silberg, KPMG’s national automotive leader, said: ‘[This] is a new era in automotive product development and manufacturing. It is one that emphasises the car's nervous system more than the powertrain. This includes the computer “brain”, sensors, controls, driver interaction and data storage.

‘This is an enormous shift in organisational structure, talent acquisition and operating model for most car manufacturers.’

Silberg argues that manufacturers are in a ‘war for talent’ to acquire the expertise needed to produce the software that will power future generations of connected and autonomous cars.

People with the required level of expertise are in short supply, he says, and carmakers will be competing with traditional software companies and technology giants for the same people.

As connected cars generate more data, there will be intense negotiations over who owns the information vehicles produce.

The sophisticated tracking technology that can be fitted to modern cars is producing a wealth of data that is valuable to a range of suppliers.

This could lead to third-parties paying vehicle owners, particularly fleets, for access to data which will then be used by their services.

Fleet Europe reports that in Canada, the smart mobility company Weather Telematics has a weather alert service which uses data collected from the telematics systems of thousands of connected cars on the country’s roads. This is then used to create highly accurate weather forecasts, which are sold to subscribers.

Ivan Lequerica, European engineering director of Geotab Marketplace, which sells third party applications that are built around telematics data, said: ‘We are really focusing on big data. In the future, people will not pay for telematics, but they will pay for the benefits they get from the data.’

Geotab’s live analysis of vehicles’ on-board diagnostic systems can also be used in products that give manufacturers a highly accurate guide to the reliability of their vehicles, identifying when parts are likely to fail.

Lequerica said: ‘We have more than 500,000 vehicles with our system and we now know exactly when different parts will have an issue and when a vehicle is going to breakdown.’

According to the Autovista Intelligence’s Autonomous Car, the evolution of vehicle data could also enhance residual values.

If vehicle inspection regimes are amended so that a vehicle regularly submits details to an inspection agency about the frequency of upgrades, the state of on-board systems or about when it has been serviced, this creates a much more detailed history on the vehicle.

This has significant value for used car buyers. It may also mean that it will become much more difficult for unscrupulous dealers to fraudulently create a vehicle history to secure a sale.

However, as more data is collected, it will be important to inform owners on the data that will be collected and the purpose for collecting via disclosures provided at the point of sale.

More on autonomous cars…

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UPDATE: News & Insights have moved to the Autovista Group website

March 31, 2017

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