Internet of Cars Goes Beyond Self-Driving Vehicles

Author

Gartner Inc., Contributor

April 29, 2015

By Thilo Koslowski
Gartner, Inc.

Mention the “Internet of Cars,” and most people probably conjure news-making reports like the self-driving vehicle. Technology companies and automakers are getting close to it. Tesla recently announced that its Model S will soon drive itself. Mercedes expects its F 015 self-driving car to be road-ready in a not too distant future.

But the Internet of Cars goes much further than aiming for the tremendous accomplishment of making vehicles drive themselves. The opportunity is to develop practical “connected vehicle” innovations that can be applied directly to the bottom line sooner rather than later.

As consumers worldwide continue to embrace smartphones, the mobile Internet, Web-based content and connected vehicles, automotive-focused companies have new opportunities to interact effectively and in differentiated ways with customers during the presale, sale and postsale phases.

Gartner forecasts that by 2020, 70% of all auto-related customer interactions will be digital. These interactions will lead to new digital business models for existing and new services. For example, connected vehicle technologies will soon enable drivers to request real-time service, product and pricing information from automakers, dealers and other companies.

Imagine you are stopped at a stop light, and you want to know more about the car next to you with these interesting-looking wheels. You wonder if they are available for your car as well, so you just ask your car the question. The car responds by not only saying, “Yes, they are available for your car,” but also by giving you pricing information and asking if you would like to stop by a dealer who happens to have them in stock and can install them on your way home. For automakers and dealers, this represents a valuable new service model that can help keep customers in the fold.

Millions of Digitally Connected Vehicles
The Internet of Cars will have significant and lasting implications for the automotive industry and will lead to the renaissance of the automobile as the ultimate mobile and connected device.

By 2020, the number of connected passenger vehicles on the road in use will be about 150 million; more than two-thirds of them will be capable of consuming, creating and sharing Web-based data. For opportunistic automakers that number means not just millions of connected vehicles, but millions of connected drivers and ultimately connected customers.

When viewed through the eyes of those consumers, a big, game-changing opportunity comes into view: offering drivers and passengers an in-car digital experience that goes well beyond traditional applications (e.g., dynamic routing and real-time traffic information) and expands to other Internet of Things-centric forms of consumer value, including mobility solutions, mobile payment and automation such as car-to-home integration.

The first strategic steps
The automotive and technology industries must continue to unite in order to enable digital lifestyle convergence and create new demands. To prepare for this convergence, the first strategic steps automakers should take are to:

  • Define the company’s long-term value proposition, and a business strategy to achieve it, within the next twoyears. Determine whether to become a:

o   Digital business creator — transform into a technology-centric business model that embraces digital value experiences in all products, services and customer interactions

o   Digital business participant — continue to operate primarily as a traditional, best-in-class auto company, while letting partners (or competitors) manage new digital business value propositions

Over the next 15 years, the Internet of Cars will continue to have fundamental implications for automotive companies and many other industries. Automakers would be well served to take a good hard look at — and indeed, to reshape — their future.

Thilo Koslowski is vice president, distinguished analyst at Gartner with focus on automotive, vehicle ICT and smart mobility.

This article was written by Gartner Inc. from Forbes and was legally licensed through the NewsCred publisher network.


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