OEMs Need Software Partners as Connectivity Demands Grow

The rapid rise in demand for connected cars is changing the way automotive OEMs do business, according to a Frost & Sullivan report released Monday.
Carmakers are looking for software partners to help design user interfaces and user experience platforms that will give them an edge in the increasingly competitive market.

Consumers want vehicles that double as WiFi hotspots and come equipped with advanced driving assistance systems (ADAS) to help them find parking, park the car and simultaneously pay for it.

To meet demand and stand apart from their competitors, auto makers from Ford to Ferrari are employing artificial intelligence and virtual assistants that learn driver habits, and digital cockpits — personalized of course.

Automotive OEMS are also looking for data monetization platforms to deliver a cutting-edge UX, which requires a suite of data aggregators to deliver the right data to consumers.

“Consequently, automotive ecosystem participants are partnering with and investing in data aggregators, technology providers, data consumers, and data-driven analytics companies to generate new revenue streams using mobility services and IoT applications,” Krishna Jayaraman, Frost & Sullivan’s program manager for connectivity and telematics, wrote in a May 21 statement.

The report, “Global Connected Car Market Outlook, 2018,” also tracks the presence of new business models such as revenue per transaction, event-based pricing, and subscription pricing — some of which have already been implemented by global luxury brands like Volvo, Cadillac and Porsche.

Jayaraman noted that in response to market demand for higher value, automotive OEMs would also employ data-as-a-service models to provide bundled services.

“By 2021, when connected car data and transaction volume increase significantly, OEMs and data aggregators will shift from a subscription model to a customized pricing and revenue-sharing model,” he said.

The report, which has a dedicated section on human-machine interface (HMI) platforms, also examines connected services including navigation and telematics.

Aside from consumer-based connectivity needs, vehicles in the near future will increasingly come equipped with Remote Vehicle Data (RVD) platforms, which are the basis for innovative, connected services.

These platforms enable access to manufacturer-specific vehicle data and are aimed at vehicle manufacturers, car dealers, rental companies, fleet operators, repair workshops and insurance companies.

The report indicated the marketplace spotlight would be on the consumer side of things as companies, pointing to Daimler as a frontline player in the connected car market.

The German auto giant’s Mercedes-Benz User Experience (MBUX), an intelligent and emotional platform UX, focuses on “user-delight features” and can be custom-tailored to each driver.

In fact, Mercedes is betting big that an emphasis on connectivity features and customization — with a dash of celebrity thanks to Nikki Minaj web ads — for the A-Class, will help grab the attention of millennial car buyers.

The luxury carmaker launched a global marketing campaign for the compact vehicle last week indicates both the prominence and cool-factor connected car features and ADAS will be have going forward — how do you make remote parking assist sexy?

Personalization is a key theme — the campaign’s core message is “just like you” — and drivers can switch up the style of the digital instrument control panel and change the color of interior accent lights through the triple touch control concept with a touchscreen.

Among the other features Mercedes included in the ad was a feature that can help drivers locate parking places in a city, and a quick nod to safety with the mention of automatic braking.

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