From dumb to connected cars: what does this mean for the automotive industry and for car owners?

Before jumping in, let’s rewind a little bit.

In the beginning — 1885 to be precise — Karl Benz created the car. And over the next 130 years, cars were fruitful and there are over 1 billion motor vehicles on the road today.

In 1910, a Swedish engineer named Lars Magnus Ericsson invented the first car phone, stopping on the side of the road to connect it to telephone polls.

Fast forward to the ’60s when ARPANET said, “Let there be the Internet.” And it was so.

Sometime in the ’80s, university programmers connected to a Coca-Cola vending machine to know if it was stocked before making the journey down the halls. And voilà — the Internet of Things (IoT) was born.

In 1981, Honda created an inertial navigation system called the Electro Gyro-Cater, precursor to GPS systems developed a decade later.

Speaking of the ‘90s — vehicle telematics appears for fleet management.

“We are calling it… iPhone,” Steve Jobs declared while announcing his revolutionary new take on the smartphone in 2007.

Steve Jobs showcases the iPhone in 2007

Today, the IoT and A.I. have become the next steps in software evolution. What began with office computers, laptops, and smartphones is now spreading to everything else! Truly, as Marc Andreessen wrote in 2011, “software is eating the world.”

“Software is eating the world” – Marc Andresseen, 2011

So, what’s the deal? The opportunities with Connected Cars

Just like any other IOT, Connected Cars are things with which we can exchange data. A ton of data. A ton of truly valuable data!

As we mentioned above, car connectivity through telematics is a widespread practice by fleet management companies today. These systems enable fleet managers to better monitor their vehicles and improve their overall economic performance by:

  • Saving time on the road and reducing fuel consumption through smarter itineraries
  • Preventing car accidents by analyzing driving behavior
  • Managing maintenance and anticipating breakdowns
A few services available through car connectivity

Today, with around 20,000 additional vehicles equipped with telematic systems each year, the promising connected car market grows 30% annually.

But, this is just the tip of the iceberg. Mark your calendar. Beginning in April 2018, all new cars sold in the European Union must be equipped with eCall, basically a SIM card that automatically phone calls an assistance service in the event of a serious accident. For drivers and passengers, this will finally result in faster aid and less serious injuries. But more generally, the eCall regulation marks the true beginning of the connected car market for all.

The eCall regulation marks the true beginning of the connected car market for all.

Gartner predicts that by 2020, 250 million vehicles could be connected around the world with a 67% increase in the number of connectivity units installed in vehicles worldwide and consumer spending on in-vehicle connectivity services and products doubling.

So, what does this mean for the automotive industry and for car owners?

For industry players, well, let’s just say those in the know are licking their chops. Massive opportunities abound not only for automakers, but also after-market services, insurance companies, mobility and transportation services, etc.

They can gather a ton of new datasets and therefore better understand how their products are used everyday. As a consequence, automotive related companies hope to retain their customers longer into their brand and into their after-market services, through a richer and more personalized customer relationship experience.

On the other spectrum, car owners will be pleased to have the latest upgrades and updates to their vehicle software frequently and without having to go to their dealer — just like they update their smartphone’s OS system today, for free, in a just few clicks. They will also be able to take control of their vehicles — 24/7 — even when they’re not driving them.

With car connectivity, car owners will be able to take control of their vehicles -24/7- even when they’re not driving.

Because if you think about it, on average, vehicles spend around 95% of the time parked. Meanwhile, throughout the day, you have to deal with issues pertaining to the car, such as checking morning traffic before heading out to work, making an appointment with the mechanic, and managing insurance policies. Even in the dead of winter, when you start your car a few minutes early just to warm it up, it’s still parked.

In order to “take control”, car owners require an interface to command and query their vehicles.

  • How can car owners manage their electric vehicle charging, at home while cooking breakfast in the morning?
  • In case of a claim, how can we better communicate with our insurance company?
  • How can we safely interact with internet-based services while driving?

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