Connected Car: The industry is ready. Are consumers ready?
17 Jul 2014 Connected Car
People have come to expect the same connected experience in a car that they are already enjoying at home or at the office. Currently there is sufficient global demand for connected car services, with more than 60% potential penetration in all markets surveyed.
For the second consecutive year Telefónica publishes The Connected Car Industry Report. In this 2014 edition the report confirms the accurateness of initial forecast that foresees a sharp growth from the current 10% of built-in connectivity to the expected 90% by 2020.
This report is based on the results from opinion surveys carried out in Brazil, Germany, Spain, the UK, and the US, to accurately gauge what drivers think about connected cars and what they need and expect. Here are some major highlights from the report:
Vehicle Diagnostic and Remote Access to the car to avoid theft are highly appreciated features that the connected car delivers.
The infotainment features that allows users to seamlessly access information services as well as entertainment are valued enhancements to the driving experience.
The connected car is a true revolution for consumers as it increases significantly security and safety features while delivering a new set of services. So the greatest obstacle – actual penetration in the market with users preferring to purchase a connected car over a traditional one.
Potential penetration in the market differs from one country to another. The lowest penetration is curiously in a highly connected country like UK – only 30%. Spain and Brazil seem the most enthusiast markets with potential penetration rates of 76% and 74%.
Half of the consumer market consider connected car features an important part of their evaluation points when purchasing their next car.
Some already existing features receive attractive upgrades in connected cars. For example satnav systems will benefit from real time traffic updates.
The future seems to be in a pay per use model not only in the car usage but in usage based insurance policies.
73% of drivers considered safety and diagnostic features the most important ones to have in a connected car.
Owning a car is falling from the top priority in developed economies where up to 35% of the people believe they will prefer car sharing schemes in the future.
The preference of how to pay for these services varies from country to country. In Spain one-off payment is the preference. Brazilians are divided between upfront payment or a PAYG model. Drivers in Germany, America and the UK prefer a basic connectivity toolset and upgrade as needed.
The time for the connected car to become mainstream is 3-5 years as legislation assists the move with regulations like the need to include emergency calls (e-Call) on all new vehicles sold in the EU. Consumer demand and network improvements will also spur this transition.