Improved safety, Smartphone and electronics integration are the drivers in consumer behavior that automakers need to address to keep in step with consumer expectations, automotive leaders discussed at the Automotive News World Congress panel, New Ways of Doing Business in the Connected Vehicle Era, sponsored by ATX.
Paul Haelterman, vice president of global research firm CSM Worldwide, predicted that the industry will grow with three more manufacturers offering the services. By 2015, 45 percent of all vehicles will offer connected services in North America. In fact, it will become standard on most luxury vehicles.
The panel held featured Haelterman, Scott Miller, CEO of the Detroit office of global research firm Synovate, and Mike Jackson, CEO of AutoNation, America’s largest automotive retailer.
The discussion presented the ramifications of entire model lines being “connected” via wireless networks to off-board servers and content and personalized Web interfaces with vehicle owners. Haelterman discussed the impact on automakers’ business. Jackson discussed how the trend will benefit automobile retailers such as AutoNation. Ed Lapham, Automotive News editor, moderated the panel.
The best way to deliver connectivity, by proprietary, closed electronics architectures or open platforms, was also discussed. Consumers want to take their Smartphones and place them in the vehicles. They expect the vehicle to be just as intuitive as the iPhone.
An open architecture would allow consumers to bring their Smartphones and its applications to the vehicle but causes a safety concern for automakers. Haelterman recommended a hybrid system to give both consumers and OEMs what they want.
“A hybrid architecture enables the OEM to embed a portion of the technology, allowing it to be layered with the technology the consumer brings to the car,” said Haelterman.
Selling connectivity to the consumer ranges from “yawn, to that’s nice, to wow,” Jackson shared. Vehicles come loaded with connectivity features but subscriptions drop-off when the trial period ends. However, real-time diagnostics can provide value to consumers.
“The emerging ability of vehicles to be real-time communications devices generates extremely positive reactions among vehicle owners primarily when it pertains to their receiving real-time diagnostic reports or receiving very specific unsolicited messages that pertain to their vehicle or their drive,” noted Miller, whose firm has been conducting consumer research towards connected vehicles among owners of various automobile brands.
Miller said its research found a majority of vehicle owners would share most types of vehicle usage data, with the exception of logging speed driven, with their insurance company in exchange for some form of discount on their connected vehicle services package or at least a 20% discount on their insurance premium.
“The future of connectivity is about re-contenting the car, not de-contenting,” said Steve Millstein, president, ATX Group. “Millennials make up 25 percent of the automotive market. They have been connected their entire lives. They’re not concerned about the throttle of the engine. They want cool. They want to be seamlessly connected.”