Pressure on Automakers to Build Smarter Vehicles

The auto industry is in the midst of historic shifts fueled by technology. That includes disruptive change from connected vehicle services, autonomous vehicles and shared mobility models resulting in a blended driving environment. 

That said, a Forbes report says “today’s cars are unable to efficiently integrate many of these capabilities.”

Indeed, the pressure on manufacturers to build more intelligently connected cars is well established and continues to grow as telematics keeps changing the way we use and service cars by providing insights never before available. But where is all this innovation ultimately leading the industry?

Vehicle telematics have long since outgrown their origins in basic fleet and car tracking. Today, we see connectivity leveraged for complex new uses, including data insights for improved driver safety, sophisticated crash analysis and proactive service maintenance alerts.

Auto dealerships are using connected car data for detailed inventory reports, lot management, visibility into vehicle status and more service updates with consumers to build customer loyalty and ownership peace of mind.

With proactive driver-safety and crash-management technology, insurance companies can streamline repair and claims processes, reconstruct collisions, lower the risk of fraud and improve the customer experience — all from real-time data and analysis.

New Business Models Defined by VaaS and Autonomous Vehicles

As we look even further into the future, the auto industry is on track to shift more radically, particularly as we see autonomous vehicles and vehicle-as-a-service business models become more commonplace in the market.

In short, we’ll see cars less as a thing to own, and more as a service to use.

Analysts predict this shift to a subscription vs. ownership model and VaaS fleets may actually fuel growth in the industry. McKinsey forecasts automotive revenue will increase 30% over the next dozen years, as business models evolve toward on-demand mobility and data-driven services.

Autonomous vehicles promise to enhance safety, improve use and efficiency of the existing roadways and infrastructure and create demand for many new services.  As market penetration of new vehicles equipped with the technology to facilitate autonomous vehicles expands, aftermarket solutions will become increasingly important. 

Further into the future, feature upgrades and entertainment options will generate more revenue opportunities as people in driverless cars look for new forms of media and services to pass the time in transit. 

Connected Cars as a Service Platform

Everyone in the existing vehicle ecosystem will have to adjust their approach in order to survive the anticipated disruption. The transformation will require automotive market players to gain new skills around an increasingly technology-driven industry. That includes adopting new innovation to address software-enabled products, cybersecurity, latency, concurrency at scale, data privacy and continual product updates.

The key to VaaS success is to see the connected car as a service platform more than anything. Enterprise and consumer adoption is increasingly measured by how well automotive ecosystem providers deliver value-added services that improve safety, mitigate risk and enrich the driver experience.  

Intelligence captured from vehicles can enable feature-rich apps and services that deliver proactive driver behavior insights, minimize distracted driving and expedite emergency response.

The good news is there is tremendous value for those who see the future and seize the initiative in the data-driven disruption that’s defining the automotive world. People will always need a way to get from point A to point B. The advantages will be huge for those who figure out the best way to provide valuable information and safety in the world of connected cars and shared mobility.

Justin Schmid is senior vice president and general manager CalAmp, a telematics business. He can be reached at [email protected].