Car Manufacturers in Race for Connected Future
The survey of 3,700 connected car owners in Europe shows there is clear excitement about connected cars, in particular navigation, driver assistance and in-car entertainment, with almost six in 10 respondents (59%) saying that connected features influenced their choice of vehicle and 32% saying it was an important criteria at purchase.
Despite this, OEMs are struggling to use connectivity features to open new revenue streams, build stronger relationships with customers and boost brand awareness. This is leaving the door open for companies like Uber and Apple, which are already investing in infotainment and geo-location functions, to steal market share in this area.
Car manufacturers need to act fast if they are to avoid being overtaken by the big tech players. Smartphones are already integrating entertainment and navigation functionality with existing on-board systems, such as Apple’s Car Play and the Google powered Open Automotive Alliance. Smartphone apps can help drivers find their cars if they’ve forgotten where they parked, unlock them remotely and even prepare the interior temperature long before the driver arrives.
OEMs therefore need to find ways to either partner with tech companies or invest in them as Audi, BMW and Mercedes have recently done with their $3 billion purchase of the Nokia/Microsoft HERE map and navigation platform to make their features even better than the software specialists’ products.
Remy Pothet, Global Automotive Sector Head at TNS
The study also highlighted the importance of ‘on-boarding’ customers during the sales process, with 48% of drivers who use connected features saying that the technology was demonstrated to them in the showroom, which is why test drives are growing in importance. Explaining and showing the technical capabilities of the car early in the sales process is critical to the uptake and use of connectivity.
OEMs also need better training for dealership staff to demonstrate the benefits of connectivity. Customers often complained that dealership staff didn’t know enough about how the connected features worked, with many buyers saying they knew almost as much themselves.
Connected cars are the beginning of a new era in automotive. OEMs are moving from a primarily B2B to a B2C model where they have the opportunity to build direct relationships with their customers. Even what they sell is changing: from selling physical products, they are now selling a platform of digital services. Our study shows that the German premium OEMs are so far leading the way in terms of the quality and useability of their features. To really exploit this new era, all OEMs need to invest to ensure customers are aware of and are enjoying these connected features.
Sarah-Jayne Williams, Partner at BearingPoint
About the research
This release is based on research carried out by TNS between 24 July and 9 September 2015. We surveyed 3,724 individuals who had purchased a new or used car in the preceding 18 months. Respondents were smartphone users who had bought a car with connected car features, but who were not necessarily using those features. Owners of 11 car brands were used in the study.
Respondents were given the following definition of ‘connected features’: ‘The various options available for a car to make a connection with the internet and/or a smartphone. The data the car collects can pass on technical information (e.g. driving behaviour, maintenance, failures); indicate where the car is located (e.g. navigation, emergency calls, parking); and give access to information, entertainment and contacts (including apps).’
Respondents were based in the UK, Spain, France, Germany, the Netherlands, Italy and the Nordics (Sweden, Denmark, Finland and Norway). The results were weighted by country and car brand.