Connected vehicles are booming – they’re often mentioned in the same breath as autonomous cars, but are much more achievable from a technical perspective. Car makers are increasingly making on-board cellular data connections a standard option, too, and now we have some insight into why – a survey of automotive company executives found that they share the opinion that connected cars are huge revenue generators, with around 10x the earning power of the average non-connected vehicle.
The auto execs, responding to a survey created by KPMG with a sample group of 1,000 high-level car company employees, found that 76 percent of respondents said connected cars generate tenfold what a standard vehicle can produce in terms of available revenue streams, and 71 percent said the impact is so significant that just tracking unit sales to measure relative carmaker performance is an outdated measure that no longer paints an accurate picture.
The survey also found that 83 percent of execs agree that they’ll derive revenue from data shared by vehicle owners, and that they also need to focus on information security and privacy as a key value to attract customers in the future as a result.
It’s increasingly clear that vehicles have a role as a center for computing activity in our lives, which means data transfer, which means an opportunity to make money. This helps explain why automakers are so reluctant to give up the relationship between customers and their infotainment systems. It’s also about making sure carmakers are well-positioned to take full advantage of these new revenue opportunities when autonomous cars arrive, which will make cars even more important as a locus of connected activity.
Increasingly, automakers are describing themselves as service providers, and this helps explain why. Even if actual vehicle ownership decreases over time, the services side of the business stands to recoup and possibly exceed those losses, and car makers don’t want to cede that potential to software-specific tech companies.