Connectivity in modern cars opens up a wide range of new possibilities. At the same time dealers can take advantage of these opportunities and create their own services. Where did connectivity in cars come from, what direction is it going, and how can money be made off of it?
From OnStar and eCall to OTA updates and beyond
Car connectivity dates back to 1996, when a subsidiary of General Motors, OnStar, began equipping selected group cars with a paid (subscription-based) system for emergency calls, and later for navigation and remote diagnostics. Three years later with the launch of the European satellite navigation project Galileo, an eCall system was proposed to automatically contact emergency services in the event of an accident (including the geographical location and condition of vehicle systems). The eCall system was to be implemented in all cars sold in the EU, however this did not happen until 2018. In the meantime, not only did systems for location tracking and remote diagnostics get into cars, but thanks to Tesla also remote updates for various functions, including the possibility of unlocking speed boosts (Ludicrous mode) or increasing battery capacity (in the Model S for example where the lower-end model has the same battery as the high-end car). Today, connectivity in cars, usually provided over a mobile 4G network, can provide support in emergencies, fleet management, and diagnostics. However, it also allows carmakers and dealers to sell new functions and benefit from marketing collaboration, for example when recommending new applications or points of interest on a journey.
Connectivity brings new applications
However, connectivity in cars will soon go much further. Soon we will see the remote prediction of a failure, which is commonly seen today for example in elevators or on production lines, which will help identify potential problems in the car over time. There are also new applications for leasing companies, company fleets, and dealerships that can work with existing telemetry data. Monitoring a car’s daily mileage limit, or even the departure from the rental region is child’s play, even today.
The future lies in infrastructure, security and autonomous management
The key is however, future connectivity, which is moving in a completely different direction. For example, pilot projects are funning to connect cars to parking lots so that drivers will know which lots have a free parking space. Since the time of RDS-TMC, traffic intelligence and route rescheduling through navigation have become a standard practice. In the near future however, it will all be controlled by artificial intelligence, which will aim to proactively optimize road traffic permeability to prevent traffic jams.
The breakthrough will occur after the introduction of inter-vehicle communication. Thanks to data from cameras and other sensors, cars will be able to automatically inform each other about obstacles or animals on the road, ice, weather conditions, or even pedestrians. And the driver, but later even the vehicle itself, will be able to react in real-time, which will help prevent accidents.
What will connectivity bring to dealers?
The main question for car dealers is different – how to make money on it all? And the possibilities are perhaps unexpectedly wide. The first, most logical, possibility is to reduce fleet management costs. Today it is no longer a problem to remotely monitor all replacement and test vehicles, both in terms of their location and use, but also for example to check tire pressure, batter condition (including the EV powertrain), fuel levels in the gas tank (which is especially useful for diesels), error codes, or whether the car has been parked somewhere for a long-time while unlocked. This, of course, will help prevent a number of problems.
But there is another option – if you have cars in the fleet, from which you can read even the driving style and the way the car is used, it can dramatically help you with sales, including upsell accessories. Do you have a customer who plays loud music in a loaner car? How about offering him/her better-quality speakers in his vehicle? Do you have a customer who has rented a more powerful car than he/she current drives and enjoys fast acceleration and higher speeds? How about offering an inventory car with higher performance? Do you have a customer that travels mainly short routes around the city? How about offering him/her an EV? There are many possibilities, you just need to have in addition to car connectivity, a 360° customer view – to know what kind of car/s they have, what is important to them, what cars they bought in the past, what they complained about, etc. Konica Minolta’s specialized Automotive CRM will help you with exactly that.
But that’s still not all. Do you already have someone who checks the status of your dealer fleet by measuring data remotely? What about offering your customers a paid remote care service for their car? Covering the same things you do in your fleet – tire pressure, oil level, battery status, error codes (including e.g., a broken bulb), unlocking/locking the car. It is then super easy to pick up the phone and call a customer about a problem with their car when it is automatically detected. Just don’t do it for free.
In the future, connected cars will bring even more business
But that’s still not all, because there will be other business opportunities in the future. A number of carmakers, including Mercedes, are preparing their dealers to sell features online. It is about far more than just navigation, which has long been the primary sold feature by dealers. Dealers will now be able to sell a range of new features, and if they know their customers and their needs well, they will be much more successful than carmakers in selling these features. In addition, as the complexity of new features increases, so will the need to train customers in their use. And this is another opportunity that many dealers are already taking advantage of. In the future, it will no longer be about defensive driving schools, but also about teaching how to use driving assistants or built-in infotainment. Dealers who have a 360° customer view will significantly expand their chances of earning money from these opportunities.