Progressively expanding
By 2030 the proportion of vehicles worldwide that are connected will increase sharply from less than 5% to 37%. And connectivity will expand progressively beyond online services for connected cars to software updates for the entire vehicle system, including critical safety functions such as driver assistance.
Connected vehicles can provide a unique customer experience, enhance B2B business opportunities, and improve products and internal processes by delivering cost and revenue benefits to all participants in the automotive ecosystem.
Yet today most ecosystem businesses have not fully realized the opportunity to offer compelling services based on connectivity, or to monetize data from connected vehicles. This represents a significant lost opportunity when companies in other industries are aggressively generating value from data.
Driven by digital experiences in consumer electronics, automotive customers now demand in-vehicle digital and connected services and experiences.
However, most OEM connected services and entertainment systems do not meet customer expectations: poor execution of services and communication issues severely limit uptake in the consumer sector. Connectivity providers need to collaborate with tech companies like Apple, Google, Tencent or Baidu in the integration of third-party apps and services, as customers will not accept OEM proprietary platforms and ecosystems.
Additional vehicle-specific services need to be identified and bundled intelligently to generate profitable business models reflecting both limited customer willingness to pay and recurring costs for service licenses.
The competitive landscape for software-defined vehicles is evolving rapidly, with traditional automotive companies, technology companies and start-ups all vying for a share of the market.
To remain successful companies must follow four strategic pathways:
Technological progress within the connectivity domain exceeds the speed of development in other more traditional automotive domains by a significant margin.
To cope with these challenges OEMs must:
On market-specific product expectations and regulations, OEMs are facing heterogeneous demands. Customer location is key: Korean and European customers use different services, while Chinese and US customers have different expectations for an easy-to-use and well-designed user interface.
To limit variety, development cost and complexity OEMs need to:
In recent years the legislative landscape governing technology in the US, Europe, and China has evolved rapidly as regulations respond to evolving trends.
As a result OEMs need to adapt their existing business models, services, and technologies to comply with these new guidelines. For example:
Automotive companies have long struggled with the monetization of data. Many OEMs have ownership of large amounts of exclusive vehicle and customer data, but new regulations are breaking down exclusive control of data and giving external stakeholders more access. This means that promises of billion-dollar revenue windfalls from data monetization are unlikely to be realized.
Nevertheless, at Berylls we believe that OEMs can profit most effectively from structured internal data usage for B2B and B2C data-driven services and products. They can leverage that data for product development and internal process optimization and to provide the best customer experience at all touchpoints.
We have successfully worked on connectivity projects for large OEMs, suppliers, technology companies and service providers. Here are three recent examples of our work.
We co-developed the virtualization strategy for a large OEM from analysis of the latest market trends to evaluation of concrete use-cases and on to the derivation of necessary organizational adaptations.
We developed a desirable value proposition, a viable business case and demonstrated technical feasibility for a new third-party in-car platform for a major automotive supplier. In addition, we prototyped the new product.
We helped a leading luxury OEM integrate connectivity as a vehicle-independent development task into the company’s existing product development process.
Berylls is focused on connected vehicle issues, offering a state-of-the-art toolset to help auto industry customers stay up to date with the latest developments and trends in this rapidly evolving field.
Our service involves providing clients with in-depth research and analysis of the connected car market, including information on key providers, market trends and emerging technologies. Our experts help clients stay informed about the competitive landscape and identify new opportunities for growth.
Today most OEMs still develop connected functions and services within engineering-focused development teams. The result is that market requirements are often not met. To remedy this marketing and sales staff supported by legal and finance teams have to be integrated in the product teams. Teams which can develop and deploy use cases over the whole vehicle life cycle are rare in automotive, or else are in a constant battle to integrate with legacy organizations. Most OEMs have never really embraced Agile as a working model, instead introducing half-baked methods and tools that only made their organizations bigger, slower and more expensive. We help clients though an assessment and redesign of the operating model and the needed capability management processes of the team, including training, partnering and hiring.
Today most OEMs are struggling with mediocre connected functions and services leading to a low realization of monetization potential. At the same time technology companies are pushing into the market with customer-centric services that extend their digital ecosystems into the vehicle itself. As the importance of such services evolves, OEMs need to find the right product content that will differentiate connected functions and services, and future-proof business models. Instead of trying to monetize vehicle raw data externally, OEMS should leverage connected data pools to build differentiating client-facing services as well as developing internal use cases in engineering, production, sales and aftersales. New digital business models can also be based around cybersecurity, V2X, data refinement, and sharing models. We offer joint elaboration and validation of new business models as well as developing first prototypes and supported partner search.
Recently lawmakers have introduced proposals and new regulations that will continue to impact the customer/manufacturer relationship with data and its overall monetization potential. We advise clients on data privacy and security, including EU data acts and standards as well as competition law. We help clients understand how legislative change impacts existing or planned business models and services portfolios, and how to evolve these with improved technology or processes.
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