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Beyond the driver's seat: What is the future for auto manufacturers?
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Beyond the driver's seat: What is the future for auto manufacturers?

News Desk
News Desk
January 31st, 2023
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Connectivity is king

In today’s always-on world, it comes as little surprise that those in the market for a new car are demanding a more seamless experience when it comes to connectivity. Fragmented technologies have been launched by competing manufacturers, encapsulating in-car wi-fi, dashboard access to text and email and even driverless parallel parking, but no one model has managed successfully to combine the best of everything into one user-friendly system. Customer’s expectations for these features far outstrip the reality currently provided in the marketplace, and yet these consumers are willing to pay for access to premium features.

A recent McKinsey survey shows that 37% would be ready to switch brands for better connectivity features, and a steady rise of nearly a third are willing to use a subscription-style model, which would open up a whole new model of monetisation for a savvy car brand. Connected navigation, networked parking, smart, responsive re-routing and emergency call out features are the top tier of consumer desire, with applications such as email or music streaming coming close behind.

A new opportunity

All this marketplace turbulence does, of course, create a climate where the unchallenged dominance of a few key players could easily be turned on its head by a savvy upstart capturing the zeitgeist. Catering to the demands will require both scale and agility. It may be that this forces the evolution of some form of the shared ecosystem, as we increasingly demand that our cars connect into the ‘internet of things’ and can communicate with each other. Software development skills have never been the most highly prized within the doors of auto manufacturers, but that skill is now rocketing up the priority list.

Innovation cycles must be condensed with the same painstaking attention to detail previously reserved for production line processes, and the process of development that has traditionally been outsourced needs to become an integral part of the company’s operations. The ability to develop new software quickly and responsively now becomes central to providing the customer experience today’s purchaser’s demand. Space must be created for ‘little and often’ updates to software alongside larger, more major changes.

Of course, this could open up new streams of revenue, drastically expanding the after-sales market from servicing and parts to navigation and fuel efficiency updates, This also provides the opportunity to build a longer-term customer relationship, giving more chance of re-selling after the standard three-year trade-in cycle. New touchpoints will offer new sources of data also, which gives a greater insight into customer behaviour and creates a positive feedback loop enabling smarter, swifter response to market demand. Finding this new sweet spot will create some very clear winners and losers among auto manufacturers over the next few years.

In the driver’s seat

Cars are about so much more than just chassis and drive train optimisation now. Car makers must undergo a seismic shift in thinking and realise that their vehicles are now mobile data centres – able to track and transmit valuable information on when and where we shop, work, travel and play.

Collecting and harnessing this information in a way that doesn’t violate consumer privacy is an enormous challenge, but one that could be realised startlingly easily through partnerships with a large loyalty scheme – some of whom already have aftercare links to certain brands, such as Nectar card and Ford. Driverless technologies could unlock up to 250 million hours a year of dead ‘driving’ time on the commute, leading to a massive opportunity for in-car consumption of music and media – and the related advertising revenue. It’s a brave new world for today’s rather dinosaur like monolith OEMs – but who will emerge the winner in this game with completely new rules?

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