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Strategy Analytics on “Protecting the consumer interest with connected cars”

Today’s car has the computing power of more than 20 personal computers, features about 100 million lines of programming code, and processes up to 25 gigabytes of data an hour. Yet while automotive digital technology has traditionally focused on optimizing the vehicle’s internal functions, attention is now turning to developing the car’s ability to connect with the outside world and enhance the in-car experience. The future may not be here soon enough because 42% of car owners (those with a 2009 model or later, who are also in the market for a new vehicle), have heard of Connected Cars but don’t really know what they do.

Roger_Lanctot_Strategy_Analytics_Telematics_WireAdditionally, with cyber crimes and data breaches dominating the news, two-thirds (65%) of car owners say they fear owning a Connected Car could compromise their privacy. But inspite of all the hurdles, connected cars offer an ocean of opportunities for both the industry and potential users, if only it can attract the customers with value-added services. In a recent interaction with Roger C Lanctot, Associate Director-Global Automotive Practice, Strategy Analytics, we discussed the emerging opportunities related to connected cars and how they are changing the automotive segment. He is a business development executive with a 25-year history as an electronics industry market analyst. He is a member of the International Motor Press Association and the Washington Automotive Press Association. He is a frequent speaker in worldwide forums and international conferences. 

In future, what would be the ‘must-have’ features in the ‘Connected Car’ service package offered to a user?

Consumers are not very interested connected car services, sadly. Consumers are interested in accessing the content, applications, and services from their home and on their mobile devices and related to their work in/from their car. A connected mobile device is the best means for enabling this experience and it is the connected mobile device that represents a proposition the customer understands. That being said, OnStar is flirting with a value proposition that will one day make a lot of sense. With the switch to AT&T, OnStar is allowing customers to add their car to their existing wireless plan and is also enabling Wi-Fi a la Audi’s AudiConnect. If any customer could add their car to their existing wireless plan telematics would be immediately almost universally adopted. This is what consumers want and the technology exists to make it happen. Just a few years away. So, give the customer access to their existing wireless plan and enable an HTML5 experience in the car that taps into existing apps/services/content on the mobile device and fuses that with vehicle data.

 How car makers are leveraging the connectivity inside the vehicles to improve the customer-dealer-driver relation?  

Vehicle diagnostics tied to real-time service scheduling from the car is a check off item. About 50% of OEMs in North America will have this capability by the end of 2014 – but not all will be real-time. The bottom line is that we will see the end of “idiot lights” in the dashboard. If something goes wrong, the car will either be able to explain it or connect to off-board resources, in real-time, to resolve it.

Do you consider telematics-based Customer Relationship Management (CRM) a long-tailed value proposition for car makers? If yes, what is at stake to achieve the same?

Long tail usually refers to app deployment propositions or content services. CRM is not so much long tailed. The value propositions around service delivery and customer engagement are clear – fluids, brakes, tires, vehicle repair and replacement. The ultimate goal is customer retention which is worth millions of dollars to dealers and OEMs.

 With such a diverse ecosystem involving automotive, telecom, consumer electronics and IT industry, who do you think will be the winner in the connected car segment?  

IT companies are quietly moving into the driver’s seat. The data management and software requirements ultimately demand a “big data” partner capable of managing, securing and interpreting personal and vehicle data in real time. IT companies are best positioned to deliver the cross-divisional insights necessary to make telematics successful.

Experts have raised questions on the privacy of the data associated with users’ personal and confidential information in the vehicle. How do we ensure the security of data while receiving OTA updates or some firmware upgradation?

Securing data transmissions into and out of the car is by no means a trivial proposition, but it is one that is well understood. Mobile handsets routinely receive and process software updates as do desktop and mobile computers. Dave Miller of Covisint has an excellent expression to describe these two different propositions. I am paraphrasing. He says privacy is keeping everyone out, while security is letting the right people in. The rules around privacy are clear and the customer will have control of their data or will agree to share his data and/or the vehicle data in exchange for some value proposition from the car maker (i.e. free software updates). The car maker will be responsible for preserving the security of the vehicle including its software systems and data.

Many OEMs have supported the idea of developing their own app suite. What are your views on an ‘OEM run app store’?

Every OEM will have a couple of apps intended for specific car models and specific car functions – mostly remote access, vehicle location and health, content or application transfer. Most other apps will either be enhanced or enabled to work with existing in-vehicle platforms or projected as-is from connected mobile devices. So far, bespoke apps for in-car use that duplicate existing apps have failed.

You represent your organization in various telematics conferences across the globe quite frequently. What is the most exciting part of your current job role?

Visiting dealers around the world and using different transportation systems around the world. Germany’s Autobahn and Deutsche Bahn stand out as do China’s and Japan’s subways. It’s important to understand the transportation options – such as Uber and Lyft and their analogs outside the U.S. – and the implications and impacts for the auto industry. Some countries are just discovering cars. Other countries are just about fed up with cars. It is especially amazing to see how few people are killed by cars on European highways compared to the U.S., China, India and Brazil. We have a lot of work to do to make driving safer.

Stay tuned with Telematics Wire for latest news updates on Connected Cars, Infotainment and UBI.

 

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