The evolution of connected cars

 

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Interview with Denis Luczak

 

Denis Luczak is Functional and Business Expert for the Automotive B2C unit in our Connected Living Shared Center. He joined us in 2001.

 

 

In the face of the latest technological advances in the automobile industry, and especially in the market of the connected cars, how can car manufacturers compete today?

 

Indeed, the automobile industry is going through a fast-paced technological evolution and the connected car is now an integral part of the IoT family, having become a full-blown communicating object. The car is no longer a black box offering a portfolio of services only dedicated to safety and security. On the contrary, it is now the result of the convergence of smartphones and connectivity to Cloud infrastructures. This, in turn, enables new services for drivers in which innovation plays a crucial role in order to create value propositions that customers will be able to appropriate for themselves. Today, it is the relationship between drivers and their cars that has indeed changed.

 

The concept of car ownership and the relationship with the brand, at the moment of the purchase or throughout the lifecycle of the car, have changed, accompanied with a variety of new uses. New technologies, introduced by players such as Google, Uber and Tesla, are completely changing the automobile offering and are shaking up historical manufacturers. A new digital era has arrived in which data is the new fuel for growth and customer ownership is the main target for these conquering competitors. Car manufacturers have to reconsider their business model and approach digital transformation as a source of opportunities in order to avoid being limited to the production of chassis for what will become a four-wheel smartphone!

 

The connected car generates data that will be the basis of manufacturers’ increasingly digital strategies. While Google’s ambition is that its ads are seen by a wide audience and that they reach new potential customers while they are driving; while Apple consider the car as an accessory to the iPhone, car manufacturers have such knowledge about the usage of their vehicles that they are working on more advanced user experiences and integrated connected services, which will lead cars to become co-pilots, assisting us in traffic jams or to park, by using smartphones and their data as side means to achieve that.

 

The challenge for manufacturers, in this battle for complete customer ownership, is to project the customer relationship beyond the purchase and to completely integrate their loyalty program within their distribution, maintenance and repair networks, as well as in all their processes. In addition, they need to provide an end-to-end customer relationship by removing the current silos. This last piece of the puzzle has to be solved by the manufacturers in order to use the connected car for what it really is: a tremendous retention tool never seen before in this industry!

 

In the context of these new services, how do we incorporate our payment expertise in the connected car?

 

Developing services within the car requires transactions with fast, secured and highly scalable servers. Worldline is therefore ideally positioned to enable the advent of new services. Today, we are already connecting close to 1M cars with more than 50M transactions per day.

 

Our clients already benefit from multichannel services sales and ecommerce expertise which helps them in their digital services sales like with TomTom HD Traffic, Coyote or mobile apps. We were the first to bring this, and payments from within your car, to the market through our clients.

 

Based on initial feedback, our R&D team developed a Proof of Concept (PoC) enabling one-click payment for goods and services from the comfort of the tablet embedded in the connected car. This experimental concept is based on two of our proven solutions, WL Trusted Authentication and WL Wallet, and is first tested with the new GENIVI® OS. Called “In-Vehicle Payment system”, this solution brings a unique customer experience since drivers are able to pay from within their car, without any additional external device. Thanks to this simple and secured payment, purchase and usage of the previously mentioned new services will grow. Aside from the benefits for drivers, this solution will enable merchants to open a new sales channel and to integrate their loyalty programs and their discount coupons directly in the driver’s environment. As for car manufacturers, the creation of a new ecosystem within their cars will enhance the user experience and retain their customers.

 

How do you envision tomorrow’s connected car?

 

The connected car is a major trend of the automobile industry. However, one must distinguish between connected car and autonomous car. The connected car is already available and it is not autonomous whereas the autonomous car will obviously be connected but will only be available in a few years. The autonomous car’s main goal is to alleviate certain constraints linked to driving conditions (highway, traffic jams…) and to greatly enhance security while maintaining the pleasurable aspect of driving. On the other hand, the connected car brings an enhanced driver experience wherever they may be while enabling manufacturers to fine tune their digital growth engine through data collection.

 

Future cars, which will integrate personal assistants able to help during your drives, will be equipped with an array of sensors and will be connected to Data Analytics Cloud servers in order to answer to many more use cases.

 

The hyper-security of data and vehicles remains the most critical element and is a key requirement for customers. The media coverage of incidents linked to autonomous cars has placed doubts on the future of these vehicles and, hence a defiance from consumers. Automobile manufacturers must then rely on partners with expertise in cybersecurity who will guarantee the reliability of the cars’ connectivity as well as the secured storage of all their data.

 

Additionally, the potential monetization of this data opens up new prospects for manufacturers who will then be able to build new business models with their partners.

 

We have developed, for example, a PoC for Vehicle Relationship Management based on connected cars in order to illustrate their potential. The customer allows the transmission of their car’s mileage, levels, pressure and trouble codes in return for the assurance of an optimized maintenance, accompanied by discounts on brakes or batteries. The connected car is therefore a new kind of loyalty card in itself. This way, manufacturers will be able to grow their market shares in terms of maintenance and repairs within their networks by using the collected data to predict maintenance and repairs.

 

Lastly, the systems of tomorrow’s connected car will need to be scalable and reliable. The connected car’s lifecycle is far greater than one of a smartphone. It is highly unconceivable to keep the same smartphone for 10 years without constant system updates.

 

These obligations of security and scalability require substantial investments. This is why manufacturers must position themselves as value added services providers in order to finance said connectivity.

 

Thank you for your time today. I will leave you with one final question before we leave: In your opinion, in a century, what will be the invention/innovation that will have changed the world?

 

I will not risk trying to anticipate the far future! Indeed, the ramp up of transformations and revolutions is such that there will surely be at least 1 or 2 new revolutions within the next century. That said, my wish would be that all transportation means will use a clean and economical energy, whether it is a car, a truck, a bus, a plane, a boat…

 

 

 

Categories: Business Insights, Solutions

 

 

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