Connected cars offer huge potential for future revenues, according to a recent survey of almost 1,000 automotive industry executives.
The 2017 KPMG Global Automotive Executive Study found that advancements such as connectivity, big data, autonomous vehicles and artificial intelligence are driving new economic models for carmakers, and most industry leaders see tremendous revenue potential and consumer value in leveraging driver and vehicle data to offer mobility services.
The research revealed that 76% of executives believe one connected car generates more revenue streams than 10 conventional cars. In fact, expectations for data-driven revenue are so great that 71% said measuring OEM market share based on units sold is outdated.
“The game has changed for automakers, as cars have evolved into rolling computers and consumers have been quick to embrace autonomy, connectivity and mobility-on-demand,” commented Gary Silberg, KPMG’s Automotive Sector leader. “A car is no longer defined by its utility, it is defined by the experience it provides to the driver and passenger — and that opens a tremendous pipeline for new revenue streams and business services that KPMG projects could top $1tn in the next decade or so.”
In other findings, 80% of the executives surveyed agreed that data will be the fuel for future business models, and 83% believe they will make money from that data. In order to create value and consequently monetise data, 82% of the executives agreed that a car needs its own ecosystem/operating system (OS) to avoid valuable consumer and/or vehicle data being routed through third parties, leading to a loss of revenue streams.
A separate survey of consumers confirmed that both executives and consumers agree that data security and privacy is paramount.
“You cannot overstate the importance of data security in the autonomous era,” Silberg said. “The massive amounts of data that is being collected presents a tremendous business opportunity for auto companies. Addressing information security concerns is a critical priority for automakers, and one they cannot afford to get wrong.”