Report Says Auto Industry Requires Transformation


The Connected Car Industry 2013 report says the auto industry must remodel its business model to accommodate what is coming in the “connected future.”

Find out more about what the report reveals for automakers and dealers.

The Connected Car market will achieve mass-market penetration in the next few years, seeing the number of vehicles with built-in connectivity increase from 10 per cent of the overall market today to 90 per cent by 2020. As this change takes place, the report identified four strategic themes: the transformation of the present-day dealership model, how these new services and connectivity will be paid for, concern over opening the car to third party providers, and the role of the mobile operator in powering this seismic change within the industry.

Consumer demands around Connected Car services will require transforming a business model which has remained largely unchanged for over a century according to the report. With product lifecycles, payment interactions and customer service being traditionally measured in years, the Connected Car consumer will require a new service dynamic, more akin to the telecoms industry where such cycles are measured in months.

Service bundles, delivery channels, product pipelines, pricing and customer support will be heavily impacted, and in some cases new business models will need to be created from scratch as the dynamic between manufacturer, dealer and customer evolves.

Dealers have historically been able to get a car from sale agreement to delivery time in just 20 minutes.  According to the report, the complexity of ‘extras’ and personalisation has increased this to an average of 1.5 hours and is only set to go up further as more connected services become available.  This has implications on the dealers cost of sale per vehicle, as well as the type of sales and technical skills required.