Connected Cars – Consumers Look Beyond Transportation

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Connected Cars – Consumers Look Beyond Transportation Automotive the way we see it Connected cars – consumers look beyond transportation The next generation of connected cars brings the convenience of home and office on the road driving loyalty and revenue. Beyond the car With changing customer expectations, Customers definitely expect Cars were once used solely to OEMs are investing in the development more from automotive travel from point A to point B. The of connected cars. In recent companies and dealers as very term “automobile” – a device times, the focus has been on voice digital disruption impacts capable of movement – sums up recognition and personalized everything we required. That is no assistant apps for automated use. every facet of our lives. longer true. Paying bills, buying Noise reduction using technologies The desire for connected fuel, ordering food and organizing such as HaloSonic from Harman and car services is strongest in activities all need to be options when fibre optic microphone technology emerging markets and growing the driver slips behind the wheel. from VocalZoom were also adopted overall (41% of respondents say by some OEMs. Others are looking This change is being driven by the for competitive advantage in that they would like them in Internet of Things and by a culture that exploring niche technologies such their next car).” increasingly equates being disconnected as gesture-based interfaces and Mathew Desmond, with being lost. Consumers now handwriting recognition. Also expect their car to be an extension in the mix are authentication, Automotive Practice Lead, of their home or office space. personalization and driver monitoring. Capgemini Figure 1 – OEM Start-up Initiatives CM/Payment Services, content, Sotware System Integration Hardware Inrastructure and apps Customer Account ervices App tore oftwarecaruser Components DBcloud layers involved Infrastructure treaming content Oplatform interface Car esign obile network obile Apps manufacturing obility infrastructure remium and value OEMs 1 eg., Audi, BMW, Ford, GM, Mercedes-Benz, Toyota, VW Automotive Suppliers 2 eg., Bosch, Continental, Delphi, Denso, Hella, Magna Digital layers 3 eg., Apple, Google, Microsoft, NAVTEQ, Spotify, TomTom Telecom layers eg., Telefonica, 4 Vodafone, ATT, Verizon, Deutsche Telekom Automotive Insurers eg., Allstate, 5 Progressive, StateFarm (Historical) Core Business New Activities Source: Capgemini 2 Connected cars – consumers look beyond transportation Automotive the way we see it Moving towards personalization Moving towards autonomy Human-machine interface (HMI) software and smart mobility The autonomous car is coming and it will change domains with voice recognition, artificial intelligence (AI) and the car ownership model. Autonomous driving and over-the-air (OTA) technologies have all experienced significant contextually connected services are key areas of AI. innovation recently. Car manufacturers are already moving fast Volvo, JLR, Ford and Mercedes-Benz are already active in this space. Last year, Ford, BMW and Volkswagen integrated in these areas. The technology behind autonomous Alexa, an intelligent personal assistant developed by Amazon. hand-over—the ability for the car and driver to safely This caused a stir in the industry with its zero-licensing cost. transition control back and forth—has flooded the R&D More partnerships are expected in the near future. For pipeline of OEMs with biometric solutions built around example, Volvo is using Microsoft Suite in their vehicles. voice, heart rate, facial, iris and fingerprint recognition. In fact, 12 out of 14 key OEMs have launched mobility With the entry of technological giants such as Google service offerings either as a pilot or fully-fledged service and Apple into the connected and autonomous car and others, such as Ford, GM and BMW, are innovating segment, automobile manufacturers are forced to in the space with seemingly little concern for the return develop innovative capabilities and make cultural on investment (ROI). Software-defined cars are leading changes to compete with them (Figure 2). the way to the next generation car-as-a-service model; this combines infotainment hardware and services as Thirteen OEMs are investing $7.1 billion USD to fuel a subscription package. OEMs are looking at OTA as a the development of self-learning AI in cars. Toyota has potential revenue stream generator by offering business- planned to invest $1 billion USD in the next five years to-consumer (B2C) solutions. With Delphi acquiring to develop the in-house capability for AI. One of the key Movimento and Thundersoft acquiring Rightware, Tier 1 motives is to accelerate the development of the fully suppliers are already bolstering their software capabilities. autonomous car and personalized user experience. Voice recognition is moving out of traditional use cases Companies like Maluuba (part of Microsoft), iNAGO, such as infotainment and towards integrating vehicle Promptu, Sensory and Baidu are working on interesting users’ manuals into the system; these manuals can be areas such as natural speech assistants, AI-enabled speech accessed with the help of voice recognition. Similarly, assistants and voice biometrics. These are expected to gain Volkswagen’s introduction of gestures on the 2017 traction in the near future as the technology evolves. Golf shows it is an innovator in the mass market. (Figure 1) Figure 2 – Autonomous Driving Market: Definitions for Levels of Automation 1 2 3 4 5 he driving mode he driving mode he driving mode he driving mode The full-time specific execution by a specific execution by one specific performance by specific performance by performance by an DAS of either steering or or more DAS of both an automated an automated automated driving acceleration/ steering and accelera- driving system of all driving system of all system of all aspects of deceleration with the tion/ deceleration with aspects of the dynamic aspects of the dynamic the dynamic driving task expectation that the the expectation that the driving task with the driving task, even if a under all roadway and human driver will human driver will expectation that the human driver does not environmental perform all remaining perform all the human driver will respond appropriately to conditions that can be SAE Definition aspects of the dynamic remaining aspects of the respond appropriately to a request to intervene managed by a human driving task dynamic driving task a request to intervene driver One of the core Two (or more) core Under specific operating System can bring vehicle The driver is out of the functionalities of the functionalities are conditions, the system to safety while in loop; under all operating vehicle’s operation is performed by the system controls the vehicle; automated mode even if conditions, the system performed by the system while monitored by the driver needs to intervene driver does not intervene can control the vehicle while monitored by driver when requested when requested appropriately driver F&S Definition Adaptive cruise control Tesla Autopilot City/Highway pilot with City + highway pilot, Fully autonomous Emergency braking Traffic Jam Assist minimal driver with minimal driver vehicles Lane keeping assist intervention—Audi involvement Autopilot Fully auto parking Capability Source: Capgemini 2016 2018 2025 2030 3 Moving towards safety Governments and regulations may help drive AI innovation in the name of safety. For example, the U.S. Department Of Transportation in association with the National Highway Traffic Safety Administration (NHTSA) announced plans for a regulatory proposal that would make it mandatory for auto manufacturers to install vehicle-to-vehicle communication devices in every automobile they produce in the near future. Driver-assistance technologies like parking assists may also be included as a part of mandatory safety features in vehicles. According to Capgemini’s Cars Online 2017, Beyond the Car study, six of the top 10 OEM start-up initiatives are related to safety and driving experience. Monitoring the performance and age of parts, for example, can redirect the driver to a dealer if immediate attention is required. This provides three benefits: 1. A solution to a problem before it becomes more expensive to repair 2. Avoids stranding the driver 3. Increases service and re-purchase loyalty Increased competition Automotive suppliers are trying to establish direct relationships with end customers to help reduce their dependence on OEMs. For example, Bosch’s fun2drive app allows customers to monitor their vehicle functions and provides direct connectivity to the nearest Bosch service center. Some digital players are trying to enter the market by adapting their smartphone platforms to automotive customer requirements. The objective is to expand the reach of the technology ecosystems into the vehicle and integrate their infotainment OS and software platforms into the car. Others in the media-streaming business, such as Pandora, Spotify and Deezer, have already formed partnerships with select automotive OEMs. Telecom players are another potential entrant. With 36 million cars with preinstalled SIM cards expected to be sold worldwide in 2018, telecom companies are expecting significant revenue from connected cars. Insurers are already offering telematics-based coverage options. However, there are opportunities for insurers to offer innovative value-added products to drivers as well as OEMs and suppliers. And many start-ups are targeting various technology and data points in cars, although
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