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Monetizing Connected Car Data for Future Revenue Growth

Article December 09, 2023 nan

The automotive industry is undergoing a radical transformation propelled by the surge of connected cars. These vehicles, equipped with advanced features, are reshaping consumer preferences and opening avenues for Original Equipment Manufacturers (OEMs) to tap into a lucrative revenue stream through data monetization. Recent research underscores the pivotal role of connectivity features in consumer decision-making, with a staggering 37% of consumers globally indicating their willingness to switch brands for advanced connectivity features according to McKinsey's global study in 2020[1]. This paradigm shift emphasizes the significance of connected car technology in shaping consumer preferences. For OEMs, the real treasure trove lies in effectively monetizing the immense amount of data generated by these connected vehicles. As we navigate through this landscape, it becomes crucial to understand the challenges and opportunities inherent in this data-rich environment while exploring strategies to capitalize on these opportunities. In burgeoning markets like India, the trend is even more pronounced, particularly in mid and high-end SUVs, with a high penetration of connected cars.

Challenges in the Connected Car Data Landscape:

Low Retention in Subscription-Based Services: Despite the advantages offered by connected car features, customers exhibit hesitation in committing to recurring subscriptions. This challenge necessitates strategies aimed at enhancing the perceived value of these subscriptions. Accumulation of Telemetry Data: The colossal amount of data generated by each connected vehicle poses a significant challenge. For instance, an average vehicle generates 1GB of telemetry data in just three hours of daily usage. Managing such massive datasets from thousands of vehicles demands effective data handling strategies.

Empowering Data Monetization: Key Enablers and Organizational Capabilities

In-Car Technology Enablers: The journey towards successful data monetization commences within the vehicle itself. Components such as sensors, Human-Machine Interface (HMI), connectivity, and location/navigation hardware form the foundational enablers. Infrastructure Technologies: Infrastructure technologies including 4G/5G data towers, big data analytics, cloud computing, and related elements are crucial beyond the vehicle. These technologies collectively facilitate effective data utilization and monetization. Back-End Processes: Back-end processes play a pivotal role in analyzing, sharing, and securing car data. Collaboration with regulators, infrastructure operators, cybersecurity players, and data center operators is vital in this aspect. Collaboration Ecosystem: Successful data monetization necessitates collaboration beyond technological aspects. Forming collaborative ecosystems involving various stakeholders ensures a comprehensive approach towards effective data utilization.

Conclusion

The era of connected cars presents immense opportunities for OEMs to leverage data as a revenue-generating asset. Understanding the challenges, harnessing enabling technologies, and fostering collaborative ecosystems will be instrumental in unlocking the full potential of connected car data and driving future revenue growth.

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