Amid Copious Vehicle Features, OEMs Need a New CX Strategy

While automakers often tout their focus on putting customers at the center of everything they do, they may be missing the mark by inundating vehicles with too many features.

OEMs are constantly competing with each other by adding new features to their vehicles, but there’s not a lot of evidence consumers want all these new options – and some pretty solid evidence that many consumers don’t. In 2023, customer frustration with the new vehicles increased by the highest rate in nearly four decades, according to J.D. Power’s Initial Quality Survey. The top category for complaints by survey participants? Features. 

Meanwhile, the transition to electric vehicles and software-defined vehicles is allowing carmakers in those spaces to collect and analyze customer data to understand which features customers use, and which they don’t, so they don’t waste money in the future on unpopular features. The current industry transformation is also forcing many OEMs to realize cost-cutting and efficiency measures. Right-sizing feature development could be an impactful one.

OEMs have an opportunity now to adopt the software-driven approach, improve their customer experience and optimize their feature-development spend. That will require major changes in the way traditional automakers think about how people buy and use cars – and even the way automakers think about cars themselves. Legacy automakers who can’t make the shift risk being left behind as the nature of cars undergoes a fundamental transformation, one that is better designed to meet the needs and expectations of today’s drivers. 

Feature Proliferation Is a Problem

OEMs built their businesses on engineering and innovation, so there’s a cultural bias toward adding more functions to stay competitive. As a result, automakers present drivers with an overwhelming menu of options to engage with while they’re also trying to get safely from Point A to Point B. Some of these features are difficult to use. Others don’t work consistently. Some are confusing, and others get overlooked. A typical new vehicle may have hundreds of features, only a handful of which get used regularly.

The aptly titled National Safety Council website “My Car Does What?” aims to help drivers understand the safety features on their vehicles. In this feature domain alone, there are dozens of options. Even among safety features, there are high rates of complaints about lane-keeping and other collision-avoidance technology, although infotainment systems with buggy car connectivity and poor voice recognition generated the most complaints in the J.D. Power 2024 Vehicle Dependability Study.

A New Model for Driver Experience

The vast number of features reflects the latest stage in the evolution of vehicles from mechanical to electromechanical to digital. The next generation of cars will be built around code rather than hardware. These SDVs allow over-the-air software updates throughout the vehicle lifecycle, which requires specialized electronics and architecture, multiple software layers and connectivity with the cloud.

If that sounds like a smartphone, it’s not a coincidence. Both smartphones and SDVs deploy advanced hardware in the service of software that creates the user experience and allows it to be customized and adaptive. Just as apps go into deep sleep after a period of inactivity, features in a software-defined vehicle can do the same thing. This reduces feature clutter for drivers. It also provides SDV makers with user data they can use to support customer needs more efficiently, which in turn can build loyalty and drive consumer investment over time.

Besides making it easier for drivers to focus on the features they care about, SDVs can leverage real-time data and analytics to enhance driver experience in new ways. For example, transparency in vehicle data can inform drivers of things like how much brake life they have left, or whether their car is in peak condition for a road trip they’ve been mapping. They might also be able to download specific feature packs for trips to the mountains or the beach.

If there’s a performance issue, the car can offer to share the relevant data with the dealership’s service center so it can start diagnosing the problem before the car reaches the shop. Contactless payments through SDVs will also be possible with vehicle digital wallet technology. And as we’re already seeing with wireless device charging and EVs that can share power with homes, construction equipment and other vehicles, SDVs can serve as a transparent power source for drivers, creating additional value.

How OEMs Can Transition to This New Model

Although legacy automakers have invested a tremendous amount of resources in developing digital features that make use of connectivity, OEMs haven’t gone all-in on the transition to software-defined vehicles yet. To make this transition, they will have to make significant changes across three categories:

The customer. Rather than addressing customer needs by giving them too many choices, OEMs should focus intently on what customers actually want and what they actually use – and then focus on optimizing those features. Also needed are better understanding of context, learning from patterns of use and increasing perceived value over the lifetime of vehicle ownership.

Technology strategy. Hardware and software teams will need to work together to create experiences. This will require changes in processes, talent skill sets and significant software platform investment. OEMs will also need partnerships with “halo” tech brands that can provide software and technology expertise and an established consumer following and deep lifestyle understanding.

Enterprise transformation. The most challenging shift may be the mindset adjustment to thinking in terms of software releases and service monetization rather than a big bucket of vehicle content for each new model year. Rather than a product coming off a line, the software-defined vehicle is a closed-loop system of inputs, usage, learnings and upgrades.

Parrish Hanna is senior director-Automotive Consulting at Capgemini Invent.

The future of vehicles and mobility is already underway. OEMs can be part of it by shifting from an engineering and feature development strategy to customer experience enhancement driven by software. Using technology to design, model, deploy and learn from customer experiences will allow manufacturers to make enhancements that customers care about while reducing design and development spending on features that don’t add value.