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Connected Vehicles: IoT Steers a New Direction for OEMs
by Daniel Newman | December 28, 2017

Remember when DVD players first made their way to family mini-vans? Parents all over the country breathed a collective sigh of relief at the thought of experiencing some quiet time on family road trips. I have to admit, I felt the same excitement when satellite radio first emerged on the automotive scene. After experiencing it the first time, it was a must for every car rental I ever had going forward. But if research is any indication, that’s nothing compared to what we’re about to see with connected vehicles and the Internet of Things (IoT).

If you’ve been following the technology news, you know the IoT is already working to change all aspects of our lives—from connected mobile healthcare to autonomously driving vehicles. What many don’t realize is that even before self-driving cars emerge, a new generation of connected vehicles will be roaming the roads. Yes, connected vehicles will change how we get from point A to point B. But even more, they will change how original equipment manufacturers (OEMs) look at the automobile industry. Indeed, in the future, the focus may be less on the style of the car and more about the smart technology it holds—with manufacturers focusing on new revenue streams, branding opportunities, and user experiences.

Connected Vehicles: Why the Hype?

Yes, numerous auto manufacturers have already developed cars with WiFi and favored social apps like Facebook and Twitter. But connected vehicles go further than that. They connect to road systems, other cars, vehicle manufacturers, local retailers, and everything in between to create massive amounts of data that can help customers and manufacturers alike. But while consumers can sit pretty as they hop aboard the technology ride, manufacturers will need to change their perspective if they wish to capitalize on connected vehicles’ promise.

How Connected Vehicles Make Safer Cars

Ever forget to fill your gas tank? Change your oil? Replace your battery? Most GPS devices can alert drivers to traffic snags or the presence of law enforcement. But connected vehicles can also help automatically manage these types of parts and services with alerts and reminders to keep vehicles safe to drive. Imagine getting an alert on your dashboard to change your transmission fluid or to get your radiator flushed. Consumers will no longer have to guess at what the problem can be with just a check engine light.

How does that help OEMs? When systems fail, consumers largely hold the manufacturer responsible—even if the failure was from natural wear and tear or user error. The fewer failures consumers experience, the happier the customers are. In turn, more loyalty for the overall brand.

But that’s not all. Using data collected from connected vehicles, manufacturers can also get a sense of parts that aren’t working as well as they should. They can better anticipate when they need to find a new or better part supplier, proactively eliminating consumer complaints before they even happen. They can alert customers to product recalls as soon as they get in the car. They can better gauge anticipated warranty usage, establish smarter lengths of warranties, and build better vehicles overall.

Connecting Consumers to Rewards

For the consumer, connected vehicles mean lots of incentives to shop, gas-up, and visit while they are on the go. Imagine receiving a discount notice for gas or coffee right as you stop next to the retail location. Talk about a game changer. But OEMs stand to benefit, as well. By using APIs to connect the vehicle to loyalty cards—or even collecting consumer data themselves—the OEM can determine which alerts to send, in real time. Even better, they can use a machine learning program to determine if the alerts are being used, read, or are at all helpful to drivers. The OEM could analyze driving paths based on habits or GPS input and deliver helpful content that way, too. The point is to use collected data to improve the lives of the consumer—and to find a way to make it profitable.

Consumers Pick: Simplified or Enhanced UX

For the consumer, connected vehicles can make driving even easier, tailoring menus to show options they use most frequently—kind of like the “recent document” option in Microsoft Word. But on the flip side, OEMs can use this data to see which features are being used—which need an upgrade—and which can be abandoned altogether. It’s survival of the fittest for cars. This makes for even more efficient manufacturing—and happier clients—moving forward.

Is there such a thing as too much connection? Do drivers really want to receive incentive notices the entire time they’re on the road? After all, it seems we get a lot of connected marketing already. In my opinion, consumers themselves will likely lead the way in helping connected vehicle manufactures determine the right mix of connection and privacy. In any case, it’s the perfect example of an age-old industry needed to break down silos, learn two-way communication, and define the real value they bring to the road.

Listen to the Future of Connected Vehicles with Lonnie Miller of SAS Podcast.

This article was first published on SAS. 

 

Daniel Newman
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