Today’s connected car systems are a storehouse of data. These cars are not only improving consumer experiences but also offering revenue and cost benefits to mobility companies, including OEMs, car dealers, suppliers, tech players, and much beyond. The automotive industry is increasingly open to harnessing data from connected cars. To assist mobility companies seeking opportunities in this domain, surveys have come up with an evaluation of the potential market value of data-driven services. HeadSpin’s analysis explores promising use cases and identifies strategic approaches to enhance their prospects for success.
Monetization opportunity for OEMs and other mobility sectors
Consumers highly value connectivity, as evidenced by one of McKinsey’s surveys, where 37 percent expressed a willingness to switch car brands for connectivity improvements. In some regions, this figure was even higher, such as 56 percent in China. Moreover, 39 percent of consumers showed interest in unlocking additional digital features post-purchase, rising to 47 percent among premium OEM customers. Failure to meet these connectivity expectations can lead to customer attrition.
Numerous OEMs have grappled with challenges related to connectivity and software development, resulting in unfavorable customer feedback and project delays. Only a select few have managed to excel in the realm of software-defined vehicles and effectively capitalize on vehicle data monetization. These successful companies concentrate on three pivotal activities:
- Extensive data access: Enabling continuous improvements by granting access to 1 to 2 terabytes of daily vehicle data.
- Monetization: Emphasizing monetization through subscriptions and paid OTA upgrades.
- Swift integration: Achieving rapid idea-to-vehicle integration in about six weeks, a strategy that has benefited EV-focused OEMs.
Connected car performance analysis is also presenting clear monetization opportunities today. Connected vehicles generate valuable data streams. OEMs can explore monetization opportunities by providing data-driven services to third parties, such as insurance companies, advertisers, and smart city initiatives. This diversification of revenue streams can bolster OEM profitability.