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Connected Ecosystems - The Main Driver for Future Success in Automotive

Time spent traveling—including preparation and post travel—will never go away, but the way that time is spent is ripe for change.

In this context, a connected ecosystem is becoming a key differentiator for vehicle manufacturers.

A recent Publicis Sapient survey found 60% of drivers feel like time spent traveling is a waste of time and are interested in ways to get more out of it. Enter connectivity, which has many different meanings across the automotive industry. In the past, connectivity was defined by navigation, safety features, telecom united, and connected apps. The next level of connectivity is moving from a feature-driven approach to more holistic thinking in a connected ecosystem where functionalities such as personalized media content, upgrades on demand, and even location-based retail discounts are commonplace.

With commuting time projected to increase on average by 10 percent by 2035 as traffic grows, according to research from Publicis Sapient, customers' time to research and fulfill common tasks and elected activities will continue to dwindle. Commuters are seeking solutions for efficient trips that make the best use of their time spent getting to work. The car, the commuter, and smart devices will become part of that connected ecosystem, rolling travel needs, productivity and entertainment all into one piece.

The global automotive telematics market was worth an estimated $4.7 billion in 2018 and will be worth $24 billion by 2026, according to McKinsey and a Publicis Sapient analysis. Many car companies already leverage 3rd party apps such as Google Maps, Waze, and Spotify via e.g., Apple CarPlay. The challenge is, users are leaving the car environment and its brand experience. Currently, these apps are the only connection between the car and driver, but they are not truly integrated in a wider ecosystem. That integration is now happening with e.g., electric vehicles which inform drivers where to find charging stations, parking, and more.

The relationship between the brand, dealer, and customer has traditionally been more about the physical connection with a car, such as holding the steering wheel. A 2018 McKinsey mobility survey found that by 2025 about 58% of a customer’s relationship to a car will involve software and 42% will involve hardware. Telematic solutions will support the shift from a hardware or physical relationship to one that’s software-driven and integrates the offline and online world.

Tesla is a current leader in the automotive connected ecosystem solution space. They’re able to push new things to the car through software, versus hardware updates that require customers to bring their car to a dealership—known as software over the air (SOTA). SOTAs allow car brands to continually release new features, and some recent examples from Tesla include custom horn sounds and “in-car dog mode,” which allows temperature control to run and displays a message on the screen for any concerned onlooker, letting them know the air conditioning is on and the dog is comfortable and safe.   

Looking outside the industry for benchmarks, all-in-one apps like WeChat incorporate messaging, social media, payments, and other tasks, along with IoT companies that connect multiple devices. These are great examples of connected ecosystems. Google has expanded from browsers, computers, and phones to wearables and smart speakers, all connected through their OS to ensure a seamless, personalized experience from device to device.

Cars have become a connected device just like the phones, tablets, and wearables that Apple and Google have proliferated. And just as Apple and Google want users to deepen their relationship to the brand and become more entrenched in their devices through a connected experience, car companies are moving down the same path to strengthen the customer relationship and increase loyalty. It’s not just about buying a car anymore; it’s about what kinds of services are valuable and how the relationship changes and evolves.

Telematics can enable the ideal connected experience to become reality, where you can start to listen to content at home and then transfer that to your vehicle. Consider that you have a 23-minute commute to your office. You will have a smart system that understands the types of content you are interested in and that will learn from you. What you’ll get is 23 minutes' worth of custom, curated content from all over the world that is relevant to you automatically.

Cars will become generic commodities, but these services are the evolution of what car companies can provide, and must be best-in-class as they will become the differentiating criteria in making purchasing decisions.

Car companies and OEMs have a lot of work to do to reach the bar that Tesla and other disruptors like WeChat have set. Mobility in the twenty-first century means more than simply getting from Points A to B; it now encapsulates more personalization and productivity as customers look for mobility solutions that cover their individual needs. Customers will expect to have greater control in car feature selection—whether that’s enabling four-wheel drive on demand, automatically adjusting insurance rates based on real driving data, or simply picking up where they left off on their latest podcast—with the functionality at their fingertips to ensure their commutes are better connected, more convenient and value-adding—inside and outside the car.

Alyssa Altman
Alyssa Altman
Industry Lead, Transportation and Mobility - North America

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