The Connected Vehicle Market Opens The Door To Success For Many Companies

Automakers have to bury the hatchet in terms of data sovereignty if they want to win in the digital mobility market.

For service providers, the business outlook around the connected vehicle is promising. Analysts predict market growth of 30% per year by 2020, and SNS Research estimates that mobility services will generate $ 40 billion in annual revenue by 2020.

There is no guarantee that traditional carmakers will take the lion’s share even though they have been on the road to digital transformation for a long time. They must both build their own digital platforms and carry out the necessary cooperation to enter the world of digital services and take advantage of their own data.

The strategy is easy to understand: enriched by data from external sources – Internet services, other vehicles, smart homes, weather services or social media – data from a connected car, now the exclusive property of the automaker, can become a source of new income and new business.

Technological legacies hinder entry into the service economy

Information systems still remain obstacles. Today’s cars rely on several distinct, isolated, and different generations of systems. These systems often do not have enough memory to process the mass of data continuously generated by the sensors and the 50 to 150 digital control systems of the car. Finally, the analysis capabilities are often insufficient to be able to launch automatic actions based on rules and based on these analyzes.

There is a major obstacle affecting the overall control process of the car. For example, on a convertible, the multimedia system receives from a rain sensor located downstream of its path the information that there will be a shower in two minutes. As things stand, this information can not be translated into an automatic closing command of the roof of the convertible. In the world of connected mobility, this type of mechanism could be the basis of many services.

In addition, automakers are persevering in the development of proprietary platforms, so as not to lose sovereignty over their data. This is at the expense of wealth and innovation compared to the millions of developers who enrich Google Play or the App Store.

Car manufacturers turn into service brokers

It is essential for automakers to pursue a controlled openness strategy in which they will be both brokers, guarantors of the quality of service on their vehicles, and providers of data and mobile services. This will have a positive induced effect. For example, no longer developing the entire services themselves will allow them to free up resources to create differentiating services, thus strengthening their competitive position.

The miniaturization makes the vehicle’s central computer a complete mirror of all the components and functions of the vehicle. It communicates with surrounding systems and transforms external information into pulses to control the vehicle. Thus, the vehicle becomes a smart player in its environment and can provide the driver with perfect comfort.

To achieve this, it is necessary to use federative IoT platforms, successfully used for example in telecommunications. These platforms are hubs in inter-company value chains. Car manufacturers will be able to integrate third-party services into their own platform, which will open up a global marketplace for many players and increase its attractiveness and reach.

A new culture and a new economic logic

New sources of revenue will also emerge as car manufacturers open access to their data and services. Equipment manufacturers, car mechanics, car sharing, insurance companies, automobile clubs, tourist centers, smart home service providers, restaurants or retailers will be willing to pay to integrate this data into their own service offerings.

However, automakers will have to accept a new culture and a new economic logic, to become wholesalers of digital products. But if they are not currently familiar with the sale of digital services through third-party channels, this approach will be financially advantageous for them, and for all motorists. New mobility market leaves room for many companies that want to conquer these new markets.

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