Connected vehicles: IoT is steering a new direction for OEMs

Do you remember when DVD players first made their way to family minivans? Parents breathed a collective sigh of relief at the thought of experiencing some quiet time on family road trips. I have to admit that I felt the same enthusiasm when satellite radio first appeared in the automotive industry. After experiencing it for the first time, it was a necessary feature for all my cars. But if research is any indication, it is nothing compared to what we are about to see with connected vehicles and Internet of things.

If you’ve been following technology news, you know that IoT is already changing many aspects of our lives – from connected mobile healthcare to autonomously driving vehicles. What you may not realize is that even before self-driving cars take effect, a new generation of connected vehicles will roam the road. Yes, connected vehicles will change how we get from point A to point B. But even more, they will fundamentally change how original equipment manufacturers (OEMs) approach their automotive industry strategy. In fact, the future may focus less on the car’s style and more on the smart technology it has – with manufacturers focusing on new revenue streams, branding opportunities and user experiences.

Connected Vehicles: Why the Hype?

Numerous automakers have already developed cars with Wi-Fi and favored social apps such as Facebook and Twitter. But connected vehicles go further. They connect with road systems, other cars, automakers, local retailers and everything in between to create huge amounts of data that can help both customers and manufacturers. Consumers can sit back and relax as they hop aboard the technology tour. Manufacturers, on the other hand, will have to change their perspective if they want to take advantage of the promise of connected vehicles.

How connected vehicles make safer cars

Have you ever forgotten to fill your gas tank? Change your oil? Replace your battery? Most GPS devices can warn drivers about traffic jams or the presence of law enforcement. But connected vehicles can also help manage parts and services requirements automatically by collecting speed, temperature, error codes and more – and then sending alerts and reminders to keep the car safe while driving. Imagine getting a warning on your dashboard to change your transmission fluid or get your radiator flushed. Consumers will no longer see a generic “check engine” light. No more guessing what the problem may be.

How does it help OEMs? When systems fail, consumers pretty much hold the manufacturer accountable – even if the failure is due to natural wear and tear or user error. Fewer mistakes mean happier customers. And that means more loyalty to the brand.

But that’s not all. Using data from connected vehicles, manufacturers can get a feel for parts that are not working as well as they should. They can anticipate when they need to find a new or better parts supplier, and proactively eliminate consumer complaints before they even happen. They can alert customers about product recalls as soon as they get in the car. They can better measure expected warranty use, establish smarter lengths of warranties, and build better vehicles from the start.

Connecting consumers to benefits

For consumers, connected vehicles mean lots of incentives to shop, soak and visit while on the go. Imagine receiving a gas or coffee discount message right when you stop next to the retail store. Talk about a game changer. But OEMs can also benefit. By using APIs to connect the vehicle to loyalty cards – or even collect consumer data themselves – OEMs can decide which alerts to send in real time. Even better, they can use one machine learning program to determine whether the alarms are used, read, or even useful for drivers. OEMs could also analyze driving paths based on habits or GPS input and also provide useful content that way. The point is to use collected data to improve consumer life – and find a way to make it profitable.

Consumer Choice: Simplified or Improved UX?

For consumers, connected vehicles can make driving even easier and tailor menus to display the settings they use most frequently – similar to the “recent document” setting in Microsoft Word. On the flip side, OEMs can use this data to see which features are used, which need an upgrade, and which ones can be completely abandoned. It is survival of the most beautiful for cars. This provides even more efficient production – and happier customers – going forward.

Is there something like too much connection? Do drivers really want to receive incentive messages all the time they are on the road? After all, we already get very connected marketing. In my opinion, consumers themselves are likely to lead the way in helping connected vehicle manufacturers determine the right mix of connection and privacy. It’s the perfect opportunity for the automotive industry to break down silos, enrich two-way communication with customers, and define the real value they bring to the road.

About the author
Daniel Newman is the principal analyst for Futurum Research and CEO of Broadsuite Media Group. He works with the world’s largest technology brands exploring digital transformation and how it impacts the business. He is regularly cited in CIO.Com, CIO Review, CNBC and hundreds of other sites around the world. Newman is a five-time best-selling author, including Building Dragons: Digital Transformation in the Experience Economy, and is also a contributor to Forbes, entrepreneur and the Huffington Post, and a graduate professor.

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