For many OEMs, the first place to look for opportunities to monetize connected car data has been external – targeting insurance companies, fleet managers, fuel merchants, tolling providers, and consumers of parking and traffic data.
But, while these third-party use cases grow, OEMs should also look closer to home to boost Connected Car returns by focusing on core competencies. Typical high-volume OEMs have millions of dollars of untapped opportunity to use Connectivity to create internal and external cost savings, quality and safety improvements, efficiencies across operations for themselves and dealers, as well as time and cost-saving conveniences for consumers.
Services and applications for connected car technology that illustrate a core competencies focus are conducting warranty repairs via OTA software updates, providing service reminders through a live vehicle connection, providing inventory management by tracking assets directly through vehicle hardware, and gathering ownership feedback through real-time vehicle usage statistics.
Coincidentally, McKinsey’s study also exposed that consumers are most interested in connected car features that make mobility safer, more convenient, or save time and money. These affinities are highest among high-usage, younger, and privacy-concerned drivers. And we see several OEMs introducing proprietary services in these areas in recent years, while several others are instead establishing partnerships.
OnStar is an example of GM making a strategic choice to build from the ground up, while other OEMs have chosen the partnership route. Neither choice has an inherent advantage – rather the key for OEMs is to select the best strategy based on what they do well, what third parties do well, and how the two overlap most optimally with what consumers want – in the context of their other enterprise efforts, goals, and expenditures. It’s getting this nexus of convergence right that provides the most fertile ground for OEMs.
Interestingly, there may also be areas of core competence where third party solutions have beaten OEMs to the punch. Yet, rather than compete directly, a better strategy may be data licensing schemes that can bring more value to consumers in exchange for usage insights to drive sales, service, and marketing programs more intelligently.
Finally, OEMs can build apps & services that are complementary to popular third-party ones to drive more users into the data-driven world of vehicle safety, convenience, and time & cost savings that they own – regardless of whether those consumers are retail, fleet, or otherwise.