The Connected Car - what does it mean for the Automotive industry

Jul 23 2015

The Connected Car – what does it mean for the Automotive industry

What is a connected car?

The connected car is equipped with Wireless internet access enabling it to communicate with other devices on the inside and outside of the vehicle and enhance the in-car experience. The newer vehicles have a head unit, in  car entertainment, in dash systems with a screen managed by the driver. Typical applications include music playing, smartphone apps, navigation, engine and vehicle diagnostic, voice commands, parking assistance and contextual help. The car will ‘learn’ the drivers preferences, notice when the tank is low and direct him or her to the nearest petrol station. Voice controls like the driver saying ‘I am hungry’ will let the car display nearby restaurants. Your car will be able to look up movie times or order take-away on the way home. Users can unlock their cars, check the status of batteries on electric cars, find the location of the car, or remotely activate the climate control system.

How is it transforming the automotive sector?

The Connected Car Market

Source: Business Insider

Business Insider Australia estimates that 75% of cars shipped globally will be built with the necessary hardware to connect to the internet. The connected-car market is growing at a five-year compound annual growth rate of 45% — 10 times as fast as the overall car market.

Some early consumer research suggests that connectivity is increasingly important to customers. At the same time there are concerns about digital safety and privacy.

Increase in connectivity components and services: McKinsey is estimating the total cost of ownership will remain stable, but with new technology, there will be new components, spare parts and services required. With this of course comes training of staff and new software and tools. Software and telecommunications companies will be new players and partners for that space. The traditional OEMs will need to be on top of their game to maintain control over that sector.

New Safety laws. Europe is always ahead and often a good prediction of what will happen in Australia. By 2015, all cars in Europe must be equipped with eCall, a system that automatically contacts emergency services and directs them to the vehicle location in the event of a serious crash. It will be a matter of time new legislation will be introduced in Australia.

Education & Training: Dealerships and also the repair sector will have to familiarize themselves with all this new technology. Customers will expect the automotive businesses to be the experts at it, explain, service and repair these systems. There will be a large amount of app developers and software providers, not just the few OEMs. This will be a huge challenge for the automotive aftermarket.

Maybe the new generation of cars will drive themselves into your workshop? Exciting times ahead.

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