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Car manufacturers are in a paradoxical situation: they are bringing back huge amounts of data from vehicles without fully exploiting or sharing it. Yet, the PTOLEMUS Consulting Group’s Vehicle Data Market Global Study report reveals there are high stakes in opening up this ecosystem as manufacturers, motorists and third parties would have a lot to gain. The customer experience could be completely transformed – in compliance with current regulations. Manufacturers must act now, otherwise the exploitation of this data will be done without them.
To gather further insights into transforming the customers experience in mobility services, we interview Frédéric Bruneteau’s, President of PTOLEMUS Consulting Group, who has over 20 years’ experience in mobility services, becoming one of the worlds’ foremost experts in the field of connected vehicles. Our Director of the Telecom & High-Tech BU at Webhelp, Jalil Lahlou, also shares his insights into these transformations.
Why did you launch this study on vehicle data?
Frédéric Bruneteau (FB): The market was close to maturity on the strategic issue of vehicle data, and on the opportunities for value creation offered by their sharing. This hypothesis was confirmed during the 50 interviews that many international automotive professionals gave us, in 18 countries.
I should point out that the study does not only concern car manufacturers, since we studied 8 vertical mobility markets, including: fleet management, car rental and car sharing, payment from the vehicle, car maintenance (remote or local), car insurance, etc.
In the end, these 8 months of work allowed us to better estimate the fantastic data production of the vehicle, current and future, and its fundamental economic stakes. The 600-page report covers the period 2018-2030 and proposes case studies from 7 manufacturers who already share their data.
How is vehicle data produced and what is the role of Vehicle Data Hubs?
FB: Firstly, I would like to point out cars are already producing phenomenal amounts of data, and with good reason. There are a good hundred sensors in a vehicle, and there are more lines of code in the computer programs that manage it than in those of an Airbus.
To take advantage of this data, new platforms are appearing today, these are the Vehicle Data Hubs (VDH).
These are sometimes traditional players who have gradually taken an interest in vehicle data and its use, such as insurance (LexisNexis, Verisk) or maintenance (CCC) providers. These players have been exchanging data with manufacturers for several years now within the scope of their original business which makes them specialists.
In addition, we have recently seen the emergence of more generalist players, such as Wejo, Otonomo and Caruso. Their approach is first and foremost to serve carmakers and open up their data to the rest of the world, in all verticals.
What are the current and future business models for exploiting this data?
FB: The data generated by a rolling vehicle is of all types: traffic information, incident and accident detection, maintenance data, conditions, and modes of use, etc.
Some data takes on a special meaning, and therefore value when crossed intelligently. For example, some VDHs are already doing this and can thus determine which lane on a 3 or 4-lane road runs best. This information can be monetized in different ways.
Another example: for an insurer, interesting data can be retrieved from the vehicle, such as distances travelled, as well as risk levels; depending on whether one is driving during the day rather than at night, on the highway rather than on the road, etc., this makes it possible to build different billing models based on usage.
However, in this insurance niche, suppliers of electronic boxes are already positioned to provide this data; competing solutions also exist, based on the mobile phone. In other words, car manufacturers are already ‘short-circuited’ in these business models. This should make them aware of the value of the data they collect…
More generally, the automotive ecosystem is particularly large and diverse, with dealerships, repairers, accessory dealers, leasers, and a multitude of equipment and service providers.
All these players have a strong interest in accessing vehicle data to create all kinds of business models.
Jalil Lahlou (JL): I would simply add that vehicle data can create a lot of value, as long as it can be coupled with user data. The latter are now being exploited in a very relevant way, based on data analytics.
Based on cross-referencing of vehicle-driver data, loyalty and personalisation actions can be imagined. For example, for a manufacturer, this opens-up opportunities for range renewal: the sales pitch to a driver would be much more relevant, since we would be aware of his real uses.
In other words, this opens up opportunities for upselling complementary options, mobility products and services, etc.
For example, a good knowledge of the driver and his or her uses would make it possible to recommend other products – such as the purchase of an electric scooter for a very urban, short-distance, environmentally conscious user.
In a loyalty and renewal framework, the proposal for a replacement vehicle could be based on reliable bases (age of the vehicle, kilometres travelled, repurchase value of the vehicle, etc.).
These practices are highly developed in telecoms. Conversely, today, manufacturers find it very difficult to keep track of a vehicle’s life.
More generally, this cross-referencing of vehicle-driver data would lead to the emergence of new types of prospects and customers, highly relevant to the automotive and mobility ecosystem. Subject, of course, to strict compliance with regulations in force, such as the RGPD, and the rejection of dubious practices of the dark pattern type.
How important is consent to the use of vehicle data?
FB: This is one of the most important questions – how will this consent be granted, and renewed on a regular basis? Some data will not be personal data – anonymised traffic data, for example, but others will fall within this legal perimeter, such as geolocation data.
Significant efforts will therefore have to be made in terms of transparency and education, so that users see their interest in this exploitation of their vehicle data.
This is the sine qua non of consent, whether one-off or more permanent.
Which segments are affected by the use of vehicle data?
FB: Based on the study, 4 segments can be distinguished:
As you can imagine, each of these segments has its own challenges in terms of the customer experience
JL: As far as new vehicles sold in Europe are concerned, regulations require them to be equipped with the eCall emergency call system. Cross-vehicle driver knowledge creates new opportunities in customer care such as premium support that could concern the optimised use of the vehicle, or a ‘concierge’ type service for vehicle maintenance and to make the driver’s life easier, for example.
Preventive maintenance services are also possible on these bases. Generally speaking, these 4 segments could all benefit from a much-improved customer experience and customer relations.
You advocate a model for sharing vehicle data, what are your arguments?
FB: As I pointed out, cars already produce a considerable amount of data flow, and the trend will increase in the future since all new models in Europe are connected. Yet, paradoxically, these gigabytes of data are hardly ever shared with third parties.
Here, a comparison must be made as data from mobile phones has been widely shared and used for a long time. There is a strategic challenge in sharing vehicle data to offer drivers new services and a richer, more satisfying experience.
Apple has just announced its intention to use vehicle data (in partnership with BMW) to launch a digital solution for Car Keys – to open the door of a car purchased, rented, or borrowed with an iPhone.
This enables manufacturers to implement this service for car users so they can easily access the car using their Apple mobile device.
How can manufacturers create a mechanism for third parties to access vehicle data?
FB: The manufacturers we interviewed already have ideas or solutions.
The general idea is to design a platform model that allows targeted access to certain data, with the necessary consents. Each platform would be linked to a manufacturer on the one hand and to third parties on the other.
Of course, there are already some implementations that correspond to this model at some manufacturers, for example BMW or General Motors, but they are still only on a small scale.
It is true that today, manufacturers do not have a data centric culture, or that they have other priorities, but rather extraordinarily complex and heavy in investments: the autonomous car, the electrification of vehicles, the reduction of emissions, and so on.
So, one of the key conclusions of the study is that the most efficient way to go to scale in vehicle data management would be to use specialised players. These have the expertise to create data hubs, and to make them available to thousands of players. This is the purpose of GM’s investment in Wejo and Nissan’s investment in Otonomo.
What do you think of Apple and Google’s App Store model?
FB: It is indeed the model of app stores, as it was developed for smartphones. Millions of developers can thus create applications, often useful and with high added value.
Our analysis and our bet is, this model will eventually prevail, due to a great market demand and the solidity of the model. Moreover, Silicon Valley has proven that by putting customer data at the centre of the organization, we solve all the problems of an industry or service!
Finally, it is very likely that a regulation will be put in place on these subjects, in Europe and the United States in the next 2 or 3 years, and we must anticipate this.
Will manufacturers be able to draw inspiration from the success of Apple and Google?
That would be the start of a new era!
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