02 Jun 2016 19:32 IST

The business of ‘connected cars’

Google self driving car

Cars of the future could have direct access to internet, enable automated links to connected objects

Even as the automotive market matures, the technology quotient of cars is also increasing. Customers today demand products (automobiles) that have features like electronics, telematics, embedded systems, human-machine interface and safety systems.

These four-wheelers are getting more and more digital, and are being fitted with internal and external sensors that can be used to monitor the engine functions and scan roadways for traffic backups and safety hazards; they’re being fitted with on-board entertainment and communication interfaces that can connect with the internet; and they have autonomous driving features that help with basic functions like parking and maintaining a safe distance.

New features

Auto-makers today are unveiling new digital services and autonomous driving features. The connected car is designed with direct access to the internet, enabling automated links to all other connected objects, such as smart phones, tracking devices, traffic lights, other motor vehicles — even home appliances.

In the near future, this ‘connected car’ could disrupt the entire automotive ecosystem. The industry is expected to undergo a fundamental change as semi-autonomous driving emerges. This will eventually be followed by a shift to full autonomous driving.

The connected car solution broadly caters to seven areas.

~ Autonomous driving: Operation of the vehicle without a driver at the controls. For example: a self-parking car.

~ Safety: The ability to warn the driver of on-road problems and automatically sense and prevent potential collisions. For example danger warning signals and emergency call functions.

~ Entertainment: Access to music and videos to passengers and the driver. This area includes smart-phone interfaces, WiFi and Local Area Network hotspots.

~ Well-being: Monitoring the driver’s health and competence. Electronic alerts to indicate driver fatigue and other forms of assistance are examples.

~ Vehicle management: Minimising operating cost and increasing comfort. For example, remote control of car.

~ Mobility management: Guidance on faster, safer, economical and fuel efficient driving. Examples include real time traffic information displays and transfer of usage data.

~ Home integration: Links to homes, offices, and other buildings. This would mean integration of automobile with home alarms or energy monitoring systems.

Watch how Google uses technology for its self driving car.

Service providers

All this would lead to an impending shift where auto players position themselves as mobility solution providers, instead of just product suppliers.

There will create additional revenue opportunities in digital areas such as entertainment, commerce and mobility management. Being among the most compelling aspects of digital automotive technology, safety applications too have immense revenue opportunities. Safety and driver-assistance technologies will lead the growth of connected car solutions, followed by entertainment and mobility management.

In the near future, increased availability of high-speed wireless networks and cloud-based data services required to create connected car software, will also drive growth. On the demand side, growing awareness of digital safety features and entertainment options will spur sales.

India, which is still a nascent market in terms of awareness and need, will witness increasing relevance of technology-backed applications. A young population with global exposure and rising aspirations is expected to drive demand.

Adoption of technologies

Road congestion in urban centres and fatalities due to accidents will influence the adoption of various assistance technologies.

In India, around 30 per cent people involved in road accidents end up losing their lives. While metro cities record very high accident rates, the numbers are inching upwards in smaller towns and cities as well, where newly-built highways witness increasing vehicle conflict and accident risks.

It was found that about 49 per cent Indians spend more than 12 hours in a car. This provides a platform for adoption of vehicle infotainment systems solutions, which will keep passengers productively occupied. Our country is expected to contribute about 10 per cent to the global connected car market by 2030, with one of the highest shares in driver-assistance technologies.

A strong digital infrastructure will benefit the automotive sector in India and improve its productivity.

Security consideration

While technology and the connected car paradigm provide enormous potential, data security is key consideration that players need to be cognisant of.

OEMs, which handle large amounts of consumer related data, need to make necessary investments on forensic capabilities and real-time monitoring of vehicle data, to make security their top priority.

Regulatory and legal frameworks will be key considerations as players craft their strategies to address the connected car opportunities. The role of Governments in shaping the market and competition will be crucial as they introduce necessary compliance frameworks. Players will need to have the customer and his needs at the centre while tailoring their propositions based on the business environment.

The industry landscape will undergo a change where players will need to revisit their extended enterprise and develop partnership models with technology companies.

For the connected car business to thrive and be sustainable, effective partnerships between automotive majors, component manufacturers, wireless carriers and IT service providers is necessary. Technology has created multiple possibilities for the future landscape of the auto industry.

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