THE AUTOMOTIVE DIGITAL TRANSFORMATION AND THE ECONOMIC IMPACTS OF EXISTING DATA ACCESS MODELS Schönenberger Advisory Services Research Paper _____________________________________________________________________________________ Preface This research paper is a collaboration between the management consultancies QUANTALYSE and Schönenberger Advisory Services. It is a study written upon request from Fédération Internationale de l’Automobile - Europe, the Middle East and Africa (FIA Region I). The purpose is to provide an assessment of the economic impact of vehicle data access models on the European automotive aftermarket over the short to mid term. A consumer survey; analysis of aftermarket insights and of technological and legislative trends; more than 20 interviews with experts, senior executives; and quantitative modelling experience serve as the foundation for findings presented in this paper. For more information contact: • Luc Hoegaerts - [email protected] • Brit Schönenberger - [email protected] The study was commissioned by FIA Region I. For more information contact: • Chris Carroll - [email protected] The information and views set out in this report are those of the authors and do not necessarily reflect the opinions of FIA Region I. Neither the companies, nor any person acting on their behalf, may be held responsible for the use which may be made of the information contained therein. QUANTALYSE and Schönenberger Advisory Services wish to express their gratitude to all the individuals and their organisations that were contacted during the preparation of this report for sharing their insights. Recommended citation: Quantalyse Belgium, Schönenberger Advisory Services, (2019) "The automotive digital transformation and the economic impacts of existing data access models", Technical Report. _____________________________________________________________________________________________ The automotive digital transformation and the economic impacts of existing data access models page 2 of 120 Research Paper _____________________________________________________________________________________ Table of contents 1 Introduction .......................................................................................................................................... 8 1.1 Background ................................................................................................................................... 8 1.2 Purpose ......................................................................................................................................... 8 2 European aftermarket ........................................................................................................................ 10 2.1 Segment ...................................................................................................................................... 10 2.1.1 The automotive value chain ............................................................................................... 10 2.1.2 Relevance ........................................................................................................................... 11 2.1.3 Composition ....................................................................................................................... 11 2.2 Stakeholders ............................................................................................................................... 12 2.2.1 A complex structure ........................................................................................................... 12 2.2.2 Main aftermarket players ................................................................................................... 13 2.2.3 OEM and IAM in equilibrium .............................................................................................. 14 2.3 Vehicles in operation .................................................................................................................. 17 2.3.1 Inflow .................................................................................................................................. 17 2.3.2 Car park size ....................................................................................................................... 17 2.3.3 Car park age ........................................................................................................................ 18 2.4 Value ........................................................................................................................................... 20 2.4.1 Volume ............................................................................................................................... 20 2.4.2 Recent volatility in vehicle sales and heading for contraction ........................................... 23 2.4.3 Past and future ................................................................................................................... 23 2.4.4 Pricing differences .............................................................................................................. 24 2.4.5 Expenditure ........................................................................................................................ 25 3 Trends ................................................................................................................................................. 27 3.1 Changes in power balance .......................................................................................................... 27 3.2 Connected Car Park .................................................................................................................... 28 3.3 The future of Repair and Maintenance Information (RMI) based services................................ 29 3.4 OEM activities ............................................................................................................................. 30 3.5 Tier 1 suppliers need to take position ........................................................................................ 31 3.6 IAM players fighting for relevance, consolidation for scale ....................................................... 31 3.7 Platformization and ecosystems ................................................................................................ 32 3.8 Evolving new marketplaces for in-vehicle data .......................................................................... 32 3.9 Key stakeholders and third parties interested in a competitive aftermarket ............................ 34 _____________________________________________________________________________________________ The automotive digital transformation and the economic impacts of existing data access models page 3 of 120 Research Paper _____________________________________________________________________________________ 3.9.1 Rental companies ............................................................................................................... 34 3.9.2 Leasing companies.............................................................................................................. 35 3.9.3 Insurance companies .......................................................................................................... 37 3.9.4 Roadside Assistance providers ........................................................................................... 37 3.9.5 Automobile Clubs ............................................................................................................... 37 4 Data Access ......................................................................................................................................... 39 4.1 Telematics................................................................................................................................... 39 4.1.1 Internet of Things ............................................................................................................... 39 4.1.2 OBD – Europe in the footsteps of the US ........................................................................... 40 4.1.3 Extended Vehicle – the European OEM approach ............................................................. 42 4.1.4 Extended Vehicle in relation to general technological trends ........................................... 44 4.1.5 Evaluation of Extended Vehicle in recent studies .............................................................. 53 4.1.6 Technical analysis of current OEM solutions ...................................................................... 59 4.1.7 Learning from developments in more mature IoT sectors ................................................ 61 4.2 Legal framework ......................................................................................................................... 62 4.2.1 Relevant legislative domains and political activities .......................................................... 63 4.2.2 Right to repair ..................................................................................................................... 65 4.2.3 Competition ........................................................................................................................ 65 4.2.4 Other regulations, developments and movements concerning data ................................ 68 4.2.5 Ex-ante legislative response needed to prevent market failure ........................................ 73 5 Consumer preferences ......................................................................................................................