Monetizing connected vehicle data and delivering value based services to end customers
Author: Vikas Kumar, Samvardhana Motherson International Ltd
Abstract
The connected vehicle ecosystem has revolutionized the automotive industry, enabling Original Equipment Manufacturers (OEMs) to gather vast amounts of data from vehicles in real-time. With the proliferation of Internet of Things (IoT) technologies, data from vehicles, including driver behavior, vehicle performance, traffic conditions, and environmental factors, can now be used to generate new revenue streams. This paper explores how OEMs can monetize connected vehicle data while providing value-based services to end customers. It outlines the key opportunities, challenges, and strategies for developing data-driven services that benefit both OEMs and consumers, including usage-based insurance, predictive maintenance, in-car entertainment, and smart city integration. The paper also incorporates a specific focus on the state of the Indian connected vehicle ecosystem.
Introduction
The automotive industry is undergoing a transformative shift with the advent of connected vehicles. These vehicles are equipped with an array of sensors, cameras, and telematics systems that provide OEMs with access to real-time data. As a result, OEMs are now in a prime position to leverage this data to create new value propositions for consumers and open up new monetization opportunities. Connected vehicle data can be a valuable asset, but OEMs must focus on creating meaningful, customer-centric services that enhance the user experience while ensuring data security and privacy.
This research paper will explore the monetization potential of connected vehicle data and discuss how OEMs can deliver value-based services to end customers. The paper will also highlight the importance of data governance, privacy concerns, and regulatory compliance in building trust with consumers and stakeholders.
India’s Connected Vehicle Landscape
The Indian connected vehicle ecosystem is in its early but promising stages of development. With rising smartphone penetration, digital infrastructure growth, and government programs like the Automotive Mission Plan 2026 and the Smart Cities Mission, India is gradually embracing vehicle connectivity. While premium OEMs are deploying telematics and V2X communication systems, widespread standardization, robust infrastructure, and data policy clarity remain works in progress.
The Importance of Connected Vehicle Data
Connected vehicles are generating massive amounts of data, including vehicle diagnostics, GPS location, driving habits, and environmental conditions. This data provides several valuable insights, such as understanding vehicle health, driver behavior, and the driving environment. OEMs can use this data to offer a variety of services that go beyond traditional vehicle ownership, transforming the customer experience.
Key categories of connected vehicle data include:
· Vehicle Data: Real-time diagnostics, fuel consumption, tire pressure, engine status, battery life, etc.
· Driver Data: Driving behavior, acceleration patterns, braking habits, and preferences.
· Environmental Data: Traffic conditions, road quality, weather conditions, etc.
· Location Data: GPS and geolocation information for real-time mapping and navigation.
By analyzing this wealth of data, OEMs can derive insights to build new revenue models that not only improve
the vehicle ownership experience but also create opportunities for businesses outside the traditional automotive sector.
Monetization Strategies for OEMs
OEMs can monetize connected vehicle data through various business models and service offerings. These strategies involve offering products and services that provide tangible value to customers while generating recurring revenue streams for OEMs.
3.1. Usage-Based Insurance (UBI)
Usage-based insurance allows OEMs to partner with insurance providers to offer policies based on real-time driving behaviour. By leveraging connected vehicle data such as speed, braking patterns, and mileage, insurers can offer personalized premiums that reflect the individual risk profile of a driver.
Indian Context: The Insurance Regulatory and Development Authority of India (IRDAI) has introduced a sandbox framework to test UBI models. Insurers like ICICI Lombard and Tata AIG have launched pilot programs, although large-scale adoption is still nascent. Regulatory clarity and consumer awareness are essential for broader implementation.
3.2. Predictive Maintenance and Service Packages
Predictive maintenance services rely on real-time vehicle diagnostics to predict when components are likely to fail or require maintenance. These services reduce downtime and enhance the overall customer experience by proactively addressing issues before they become costly problems.
Indian Context: Leading OEMs like Tata Motors and Ashok Leyland offer digital platforms such as Fleet Edge and i-Alert to support predictive maintenance for commercial vehicles. While adoption in fleets is growing, uptake in the personal vehicle segment remains limited.
3.3. In-Vehicle Entertainment and Content Services
As vehicles become more connected, they transform into mobile entertainment hubs. OEMs can partner with content providers to offer streaming services directly within the vehicle’s infotainment system. These services can be monetized through subscriptions or advertising.
Indian Context: Automakers like MG Motor and Hyundai have integrated connected infotainment systems that support Indian apps and voice assistants. While user interest is high, monetization through subscriptions is still evolving, and hybrid revenue models are being explored.
3.4. Smart City Integration and Mobility-as-a-Service (MaaS)
Connected vehicles are integral to future urban mobility, interacting with infrastructure and public transport systems. OEMs can offer services that integrate vehicles into urban transportation networks to optimize traffic and reduce emissions.
Indian Context: The Smart Cities Mission is promoting data-driven mobility solutions. Pilot projects in Pune, Bengaluru, and other cities are exploring vehicle-to-infrastructure (V2I) communication and mobility platforms. However, data-sharing protocols and interoperability remain key challenges.
Overcoming Challenges:
While the potential for monetizing connected vehicle data is vast, OEMs face several challenges:
· Data Privacy and Security: Consumer trust is paramount. OEMs must comply with data protection laws, implement strong encryption, and ensure transparency.
· Data Ownership and Governance: Clear policies must be established to define ownership and responsibilities.
· Interoperability: OEMs must adopt standards to ensure seamless integration with third-party services.
· Consumer Education and Engagement: OEMs must communicate clearly how consumer data is used and demonstrate the value of connected services.
Indian Perspective:
India’s data protection landscape is evolving with the introduction of the Digital Personal Data Protection Act (DPDPA) 2023, which lays down new obligations around consent, cross-border data flow, and personal data processing. OEMs operating in India need to align with these norms and invest in compliance mechanisms. Interoperability is also a challenge due to varying digital maturity across suppliers and lack of national standards. Consumer education will be critical to foster adoption and trust.
Future Outlook and Conclusion
The future of connected vehicle data presents a tremendous opportunity for OEMs to develop new revenue streams and deliver value-based services. By capitalizing on the insights derived from connected vehicle data, OEMs can offer tailored services that enhance the ownership experience and cater to evolving consumer preferences.
In India, these opportunities are beginning to materialize, supported by policy initiatives, startup innovation, and rising consumer digital expectations. However, strategic alignment between OEMs, regulators, and technology partners will be essential to unlock the full potential.
Ultimately, the success of monetizing connected vehicle data will depend on OEMs’ ability to balance innovation with consumer trust, ensuring that data security, privacy, and regulatory compliance remain a top priority. By doing so, OEMs can unlock new business opportunities, deliver tangible value to customers, and shape the future of the automotive industry.
References:
· Evans, D., & Appel, J. (2022). Connected Cars: Driving the Future of Automotive Services. McKinsey & Company.
· Barlow, J. (2023). Data Monetization in the Automotive Industry: A Practical Guide for OEMs. Journal of Business Innovation, 17(4), 213-230.
· ISO (2022). Data Security and Privacy in Connected Vehicles: A Comprehensive Overview. International Standards Organization.
· Smith, R. (2023). Mobility-as-a-Service and the Role of OEMs in Smart Cities. Journal of Urban Transportation, 29(1), 56-72.
Author Description:
Vikas Kumar, Senior Manager at Samvardhana Motherson International Ltd (SAMIL), is an expert in connected vehicle technologies, IoT systems, and data analytics. He drives innovation in V2V communication, autonomous driving, and data security. With extensive collaboration across the automotive sector, he develops solutions enhancing performance and safety. Vikas also leads business development in smart mobility, contributing to the evolution of connected, autonomous, and electric vehicles globally.
