Connected carmakers need to invest or acquire technology to tap new growth opportunities

Recognising the huge opportunities in the connected car business, participants from sectors such as smartphones and gaming are developing advanced in-vehicle technologies. Automakers and Tier I companies are partnering with third-party Artificial Intelligence (AI)-based assistants or building native intelligent assistants to transform user experience (UX), according to findings by the American business consulting firm, Frost & Sullivan.  

The rising focus on personalisation is also driving companies to apply multi-sided platforms like marketplace with contextual services. The company predicts that by 2020, in-vehicle marketplace will be available in 80 percent of premium vehicles sold, and the new generation of this platform will leverage customer data and be customised to each vehicle occupant.

"With commutes becoming longer, the number of purchases made on the move has increased. The likelihood of in-car ads converting to purchases of products and services is especially high in automated vehicles, which makes marketplace a scalable model,” said Suhas Gurumurthy, mobility senior research analyst at Frost & Sullivan.

"With more than 60 percent of consumers willing to share data, OEMs and data consumers will have significant opportunities to generate recurring revenues. They will be looking to invest in advanced data analytics companies, apply AI algorithms, identify new use cases, and build applications on top of platforms to enhance services. Connected car makers will be eager to build strategic partnerships with telecom providers and communication module makers to augment on-road safety and offer in-vehicle, data-rich services. Flexible business models such as choice of network for consumers will further improve customer retention and revenue generation," adds Gurumurthy.

Frost & Sullivan's findings suggest that for additional revenue opportunities, connected car makers can:

- Either acquire or invest heavily in technology companies that have aligned their vision with the CASE (Connected, Autonomous, Shared, Electric) strategy.

- Reduce development cycles for faster introductions of new and improved features.

- Focus on growth regions such as China, where demonstration and testing of C-V2X technologies are carried out by companies such as Group PSA, Autotalks, and Savari. In Europe, mobility is undergoing a major transformation with Nuance opening a UX lab in Germany and Cubic Telecom providing EV connectivity solutions for e.GO fleets.

- Implement firmware over-the-air (FOTA) updates to promote new features and on-demand feature updates.

- Acquire third-party service providers or build capability in-house to develop new telematics services.

- Utilise cloud platform capabilities such as AI and machine learning (ML) to evolve services.

- Enable seamless connectivity of all devices and deliver connected services such as car-to-home automation.