Most people thinking about the ways technology is transforming the automotive industry talk about the growing popularity of hybrid and all-electric cars, the upcoming revolutionary impact of autonomous and semi-autonomous vehicles, and the vastly increasing number of digital services available to drivers and passengers when they are on the road.
Those advances have one thing in common that will be more important than any single technology: the vast amount of data generated by the technologies and what that data can tell everyone – from car makers to insurance companies to retailers – about how you drive, where you go, and what you buy.
A coming data tsunami
An August 2018 story in The New York Times argued that the industry needs to prepare for a “data tsunami” as autonomous vehicles will soon generate four terabytes of data per hour. The data will include vehicle performance, driving patterns, destinations, and live updates on traffic conditions and weather, and will come from vehicles equipped with a small army of internet of things (IoT) sensors and cameras, high-speed 5G data connections, and enough processing power and artificial intelligence (AI) to make vital split-second decisions about what the vehicle should do next. Currently, the industry is not ready for this. Most, if not all, manufacturers do not properly leverage the sales, customer, and telematics data they can access today, and thus are unprepared to act on all the new data that will soon be produced.
Combine this on-board AI, processing power, and data with the information that will also come from smart cities and other IoT devices and you have something truly amazing. For example, smart cities will have traffic management systems that exchange data with autonomous cars about what traffic looks like in real time throughout the city, so the cars use the fastest and most fuel-efficient routes.
The number of connected cars is growing fast
Achieving this vision will require extensive amounts of data to be passed over mobile networks from newer, smarter, more connected cars. And the number of those connected cars is rising fast.
According to recent research from mobile telecommunications industry consultants Chetan Sharma Consulting, both IoT devices and connected cars were responsible for a significant portion of the growth in mobile network-connected devices in the last quarter of 2018. The company also reported that telecommunications giant AT&T boasted the highest number of connected cars ever, with more than 27 million vehicles now connected to their network.
Being smart about using vehicle data
For automakers, making the best use of vehicle data is essential, challenging, and uncharted territory. The most obvious use of vehicle data is to provide customers with a better and more reliable driving experience. Knowing how, where, and under what conditions a car is being used can help inform predictive maintenance, provide quicker and more accurate diagnoses when something does go wrong, and provide drivers with greater peace of mind. In addition, this data can provide drivers with new, richer, and more relevant digital services. Rental cars, for example, can report mileage and the amount of fuel remaining when a car is returned, enabling faster check-out and automating some of the work for check-out attendants.
Other uses include programming of infotainment services based on the previous choices of the driver, something that is already a feature of many in-car digital systems.
There is also a need to drive a value proposition forward which will incentivize data sharing with the promise of increased convenience and value. Much of the future value of a federated data-sharing future relies upon communicating information beyond one vehicle and one driver.
In short, auto makers need to ask themselves if there are opportunities to create digital services that can drive revenue and increase customer differentiation and whether the customer is likely to share data in return for value.
Using data to improve the business of making vehicles
Another key use for IoT and vehicle data is improving every aspect of the automaker business, whether that’s in engineering, supply chain, how digital services are offered, or how people view the experience of buying and using their cars.
For example, vehicle IoT data will offer insight about everything from reliability to which features of the car are being used. The software industry learned decades ago that collecting data on how products are used can provide a host of benefits and customers will usually opt-in, provided there is an upside to sharing.
How well car makers use the vast amount of machine-generated IoT data is already shaping the perception of their brands. Tesla is a prime example, as seen by its stock price. This is a process that starts at an automaker’s website and continues to the dealership, ownership, and service experience. There is tremendous up-side with new digital services and products but this requires the art and science of anticipating customer needs with the ability to rapidly scale as information is acquired, analyzed, and deployed in the most value-add use cases.
To learn more about Capgemini’s automotive practice, contact Mike Hessler, North America Automotive and Industrial Equipment Lead, at firstname.lastname@example.org.