The next big thing in automotive will be connected cars. Discuss.
Well, up to a point. Connected cars are certainly up there with electrification and autonomous vehicles as a key technology which will change the way motorists choose cars and interface with them.
First things first. Connected cars are not new. They’ve been around since the mid-1990s as anyone who owned a General Motors model – from a Cadillac Eldorado to a Vauxhall Astra – will know from the factory-fitted OnStar system which provided a voice and GPS link to the emergency services in case of an accident. Around the same time retro-fit GPS-based security tracking devices also became popular.
Reactive systems still exist in many new cars but that’s changing fast with the rollout of intelligent tech hooked up to the internet which has made connected cars smarter.
The spectrum here is broad ranging from the ability of luxury brands to deliver software updates on the go to Ford drivers in the US being able to pre-order a Starbucks drive-thru coffee, using Amazon’s voice-activated Alexa service. In isolation the ability to order a skinny latte on the move appears a mundane delivery of a consumer need. However, it illustrates what is achievable through connected car technology and hints at the type of services consumers will start to expect and demand.
The genie is out of the bottle.
New kid on the block
A case in point is a brand making its European debut in 2020, which will shake-up what customers can expect from connected cars.
Lynk & Co plans to push the tech envelope with an array of advanced telematics. All its models will be connected to their own cloud, free data will come as standard and customers will be encouraged to treat vehicles as “smartphones on wheels.”
The PR messaging is bold: “Lynk & Co [is] addressing the needs and preferences of the connected generation and challenging auto industry conventions. We exist to change mobility forever. But today, we’ll settle with disrupting the car industry from within.”
Lynk & Co is owned by Geely Auto Group, the Chinese automotive giant which saved and then transformed Volvo. Its cars are designed and engineered in Sweden and built for Europe in Belgium. International CEO Alain Visser, a General Motors veteran turned tech disruptor, describes the business as a “mobility brand with a car”.
What could prove to be a real game-changer for connected vehicles is the fitting of the world’s first in-car share button. By linking this feature to the car’s telematics and the internet, subscribers (no-one will be able to actually buy a Lynk & Co, that’s so passé) will be empowered to hop in and out of different vehicles making car sharing a real world possibility.
Rapid global growth
The international connected cars market is set to grow 270% by 2022 as more than 125 million vehicles, with embedded connectivity, are expected to be shipped by 2022, according to Counterpoint, the global industry analysts.
This exponential growth will be largely powered by European sales following the mandatory fitment of eCall (an automated emergency call system, not dissimilar to the pioneering OnStar, but much smarter) on all new models type-approved for sale in the EU since April 2018.
Meanwhile, for car buyers currently speccing their next purchase, connected car features have already shifted up the list from ‘nice to have’ to ‘must-have’, with analysts McKinsey finding 40% of car owners saying they would actually switch to another marque for better connectivity. How’s that for brand loyalty?
What’s next for connected cars?
With the accelerated growth of connected cars, OEMs now face the challenge of leveraging the huge investments they have made over the last decade or so. So where are they now and where do they hope to be in the near future?
Paul Stacy, the automotive director of LexisNexis Risk Solutions, which operates a database of data from connected cars to provide insurance services for OEMs, said the more progressive carmakers are already using connected car data to feed back into R&D, helping them produce cars which are more cost-effective to repair.
They are also using connected car tech to recalibrate the rapidly evolving Advanced Driver Assistance Systems (ADAS) with software updates when cars are serviced, as well as rolling out a host of tangible driver services including usage-based insurance; a development which could significantly reduce one of the biggest outlays facing motorists.
“Within five years every single new car will be connected, regardless of the brand,” Stacy told DriveTribe.
“The eCall legislation will help drive this but the rollout will not be restricted to new model introductions. We’ll also see a significant increase in the eco-system of third parties providing services to drivers.”
He also believes connected car technology will see the rise of usage-based leasing models as an alternative, but not replacement, to ownership.
“The data coming out of connected cars will facilitate smarter, more flexible leasing models, although I don’t think that the ownership model will change as fast as everyone thinks.
“With connected cars I would expect owners to hold onto them for longer if they can do more with them. If a car has the ability to update its services I think owners might find they are more useful for a longer period.”
The eventual rollout of 5G will see connected cars playing an increasing role in the interconnected Internet of Things, sending and receiving vast amounts of data at speed from vehicle-to-vehicle and across smart cities.
So, in answer to the question. Connected cars are definitely one the next big things in automotive, alongside electrification and autonomous vehicles, with which they are inextricably linked. Furthermore, they are already here and their volumes are multiplying in the UK, across Europe and globally.