Connected vehicles: IoT steers a new direction for OEMs

Remember when DVD players first made their way to family minivans? Parents breathed a collective sigh of relief at the thought of experiencing some quiet time on family road trips. I have to admit, I felt the same excitement when satellite radio first emerged on the automotive scene. After experiencing it the first time, it was a must-have feature for all my cars. But if research is any indication, that’s nothing compared to what we’re about to see with connected vehicles and the Internet of Things. 

If you’ve been following technology news, you know that the IoT is already changing many aspects of our lives – from connected mobile healthcare to autonomously driving vehicles. What you may not realize is that even before self-driving cars emerge in force, a new generation of connected vehicles will be roaming the roads. Yes, connected vehicles will change how we get from point A to point B. But even more, they will fundamentally change how original equipment manufacturers (OEMs) approach their strategy for the automotive industry. Indeed, in the future, the focus may be less about the style of the car and more about the smart technology it holds – with manufacturers focusing on new revenue streams, branding opportunities and user experiences.

Connected vehicles: Why the hype?

Numerous auto manufacturers have already developed cars with Wi-Fi and favored social apps like Facebook and Twitter. But connected vehicles go farther. They connect to road systems, other cars, vehicle manufacturers, local retailers and everything in between to create massive amounts of data that can help customers and manufacturers alike. Consumers can sit back and relax as they hop aboard the technology ride. Manufacturers, on the other hand, will need to change their perspective if they wish to capitalize on the promise of connected vehicles.

How connected vehicles make safer cars

Ever forget to fill your gas tank? Change your oil? Replace your battery? Most GPS devices can alert drivers to traffic snags or the presence of law enforcement. But connected vehicles can also help automatically manage requirements for parts and services by collecting data about speed, temperature, fault codes and more – then sending alerts and reminders to keep the car safe to drive. Imagine getting an alert on your dashboard to change your transmission fluid or get your radiator flushed. Consumers will no longer see a generic “check engine” light. No more guessing at what the problem might be.

How does that help OEMs? When systems fail, consumers largely hold the manufacturer responsible – even if the failure was from natural wear and tear or user error. Fewer failures mean happier customers. And that means more loyalty for the brand.

But that’s not all. Using data from connected vehicles, manufacturers can get a sense of parts that aren’t working as well as they should. They can anticipate when they need to find a new or better parts supplier, proactively eliminating consumer complaints before they even happen. They can alert customers to product recalls as soon as they get in the car. They can better gauge anticipated warranty usage, establish smarter lengths of warranties, and build better vehicles from the start.

Connecting consumers to rewards

For consumers, connected vehicles mean lots of incentives to shop, gas-up and visit while they’re on the go. Imagine receiving a discount notice for gas or coffee just as you stop next to the retail location. Talk about a game changer. But OEMs stand to benefit as well. By using APIs to connect the vehicle to loyalty cards – or even collecting consumer data themselves – OEMs can determine which alerts to send, in real time. Even better, they can use a machine learning program to determine if the alerts are being used, read, or are at all helpful to drivers. OEMs could analyze driving paths based on habits or GPS input and deliver helpful content that way, too. The point is to use collected data to improve the lives of consumers – and find a way to make it profitable.

Consumers pick: Simplified or enhanced UX?

For consumers, connected vehicles can make driving even easier, tailoring menus to show the options they use most frequently – similar to the “recent document” option in Microsoft Word. On the flip side, OEMs can use this data to see which features are being used, which need an upgrade and which can be abandoned altogether. It's survival of the fittest for cars. This makes for even more efficient manufacturing – and happier customers – moving forward.

Is there such a thing as too much connection? Do drivers really want to receive incentive notices the entire time they’re on the road? After all, we get a lot of connected marketing already. In my opinion, consumers themselves will likely lead the way in helping connected vehicle manufactures determine the right mix of connection and privacy. It’s the perfect opportunity for the automotive industry to break down silos, enrich two-way communication with customers, and define the real value they bring to the road.

About the Author
Daniel Newman is the Principal Analyst of Futurum Research and the CEO of Broadsuite Media Group. He works with the world’s largest technology brands exploring digital transformation and how it influences the enterprise. He is regularly cited in CIO.Com, CIO Review, CNBC and hundreds of other sites across the world. A five-time best-selling author, including Building Dragons: Digital Transformation in the Experience Economy, Newman is also a Forbes, Entrepreneur and Huffington Post contributor, and a graduate adjunct professor.