How Will Connected Cars and Autonomous Driving Impact the Future of the Automobile Industry?

While advancement of connected cars will be one of the greatest transformational forces in the automotive industry, the evolution of the connected car also represents one of the greatest unknowns for the industry.

The connected car has the ability to transmit as well as receive data and information from its surroundings, making autonomous driving possible and potentially offers great benefits to drivers, the automotive industry and society as a whole.  The growth of connected vehicles will dramatically improve safety for consumers, lower insurance and warranty costs and reduce traffic congestion. Connected cars will create new opportunities for the automotive industry.

Connected cars, and autonomous driving, will create market uncertainties. How and who will deliver connected cars and services? Will the current auto industry be able to navigate all of the uncertainties ahead or will new players emerge into the scene?

Connected cars are already on the market. In fact, almost all auto manufacturers offer connected services in some form in their vehicles currently. For example, General Motors began offering OnStar services as far back as 1995.

The connected car opportunity is already sizable and growing rapidly. In the next 10 to 15 years it is expected that an increasing number of assisted systems to help people drive safely will be integrated into new vehicles. The demand for connected passenger vehicles is expected to grow to 77 million units per year by 2022; by the year 2022, 73% of passenger vehicles sold worldwide will be connected in some way.

New solutions and business models are creating tension between current automotive players and a new wave of companies that are designing software, components and infrastructure. Automobile manufacturers are at risk of being displaced by new types of firms who are entering the industry with innovation solutions and designs.

Commercial players today already use autonomous equipment in farming, forestry, mining and this will become more widespread in the future. Public players like cities or governments are highly interested in autonomous vehicles because they will reduce traffic congestion. Autonomous vehicles solve parking problems and are better for the environment. There will be a dramatic change in the mobility of the future.

Traditional car makers will still be the paramount players in auto manufacturing. After all, the automotive sector is a trillion-dollar industry with some of the largest corporations and one of the most complex, globally-integrated supply networks. However, autonomous cars will require a new set of capabilities such as software development, cyber security, sensor technologies and other elements that current auto manufacturers do not fully have onboard yet. There will need to be a dramatic change in this skills set to be successful in the future. Original equipment manufacturers (OEMs) will need to enhance their capabilities of their workforces and skills of their dealerships to maximize the success of connected vehicles. They will need to bring experts in cloud and connected services, big data and digital content to help them establish a coherent connected product strategy. Training and support for dealer networks will be critical to sell connected cars and services to build customer demand as connected car services will be sold in a different way from more traditional automotive sales processes.

In the future, automobile manufacturers will need to shift their focus from being solely car manufacturers to incorporating innovative ways of offering connected services and mobility as a service. Auto manufacturers today need to collaborate successfully with new players and be prepared to respond to the disruption connectivity will bring to the auto industry as a whole.

While advancement of connected cars will be one of the greatest transformational forces in the automotive industry, the evolution of the connected car also represents one of the greatest unknowns for the industry.

The connected car has the ability to transmit as well as receive data and information from its surroundings, making autonomous driving possible and potentially offers great benefits to drivers, the automotive industry and society as a whole.  The growth of connected vehicles will dramatically improve safety for consumers, lower insurance and warranty costs and reduce traffic congestion. Connected cars will create new opportunities for the automotive industry.

Connected cars, and autonomous driving, will create market uncertainties. How and who will deliver connected cars and services? Will the current auto industry be able to navigate all of the uncertainties ahead or will new players emerge into the scene?

Connected cars are already on the market. In fact, almost all auto manufacturers offer connected services in some form in their vehicles currently. For example, General Motors began offering OnStar services as far back as 1995.

The connected car opportunity is already sizable and growing rapidly. In the next 10 to 15 years it is expected that an increasing number of assisted systems to help people drive safely will be integrated into new vehicles. The demand for connected passenger vehicles is expected to grow to 77 million units per year by 2022; by the year 2022, 73% of passenger vehicles sold worldwide will be connected in some way.

New solutions and business models are creating tension between current automotive players and a new wave of companies that are designing software, components and infrastructure. Automobile manufacturers are at risk of being displaced by new types of firms who are entering the industry with innovation solutions and designs.

Commercial players today already use autonomous equipment in farming, forestry, mining and this will become more widespread in the future. Public players like cities or governments are highly interested in autonomous vehicles because they will reduce traffic congestion. Autonomous vehicles solve parking problems and are better for the environment. There will be a dramatic change in the mobility of the future.

Traditional car makers will still be the paramount players in auto manufacturing. After all, the automotive sector is a trillion-dollar industry with some of the largest corporations and one of the most complex, globally-integrated supply networks. However, autonomous cars will require a new set of capabilities such as software development, cyber security, sensor technologies and other elements that current auto manufacturers do not fully have onboard yet. There will need to be a dramatic change in this skills set to be successful in the future. Original equipment manufacturers (OEMs) will need to enhance their capabilities of their workforces and skills of their dealerships to maximize the success of connected vehicles. They will need to bring experts in cloud and connected services, big data and digital content to help them establish a coherent connected product strategy. Training and support for dealer networks will be critical to sell connected cars and services to build customer demand as connected car services will be sold in a different way from more traditional automotive sales processes.

In the future, automobile manufacturers will need to shift their focus from being solely car manufacturers to incorporating innovative ways of offering connected services and mobility as a service. Auto manufacturers today need to collaborate successfully with new players and be prepared to respond to the disruption connected cars and autonomous driving will bring to the auto industry as a whole.

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