Cars used to be judged by their looks, speed, power, and rims. Slick car salesmen knew exactly how to sell them and made big money by making the headlights shine and remotely opening the sunroof. Those days are long gone. Slick salesmen are out of fashion, and the car dashboard is where the real magic happens. Today, a great car can be recognized by the degree to which it resembles a computer. It’s no coincidence that CES, the global consumer electronics and consumer technology tradeshow in Las Vegas has all major car brands as exhibitors. Great news for drivers, that benefit from cool tools that come with every Tesla or BMW they buy. But what about you? How can your company use the digital storm that rages through the automotive industry? In this blog, we’ll tell you about three interesting options.
1. Maintenance efficiency
When you work for a lease company, it’s in your interest to make sure that your customers drive safely. You should schedule regular preventive maintenances and when a problem occurs, you should get people back on the road as soon as possible. The only problem is, that your cars are out if sight most of the time, meaning you never know when they need fixing. As you might have guessed, this is where IT comes in. When you turn your car into a computer on wheels (for example through sensors and Wi-Fi-connected cameras) you can request information on the state of the cars in real time and do analyses on their wear and tear. In other words: you’ll know exactly when to schedule a service so tiny errors don’t turn into dangerous defects. This makes repairs cheaper and your cars safer, two features that look pretty good on your corporate website.
2. Flexible insurance
You can use this same method if you work for the insurance industry. Currently, insurance companies base their premium on the average car driver, meaning careful drivers pay for the mistakes of the ones that use WhatsApp in traffic jams. When you have insights in the driving behavior of your customers and the way they use their phones on the road, you can personalize your premium and reward the drivers that drive at a moderate speed, are offline, and accelerate and decelerate carefully. At the same time, drivers that use their phones while driving and cross the maximum speed limit regularly will pay more. This not only makes you a fairer company; it helps you motivate your customers to improve their driving behavior, resulting in less accidents and less claims. The knowledge on your cars’ whereabouts also comes in very handy in case a car gets stolen. Quicker recovery of stolen cars (or even prevention) can result in lower premiums.
3. Traffic information
In the first two examples, we explained how you can use the data of the automotive industry to optimize your services and personalize your offerings. But you can also sell your data on roadblocks, traffic density and driving behavior so that other organizations can optimize theirs. The government, for example, uses data to schedule roadworks outside peak hours and to signalize bottlenecks. Public transport companies more and more work with real-time travel advice and could really use your information on the situation on the road. TomTom, for example, is transforming into a data company rather than a device manufacturer, thanks to its data analyses. The company knows how fast people drive on 99.9% of all Dutch roads and already manages and sells traffic information quite successfully. The data that is gathered through navigation devices and navigation apps benefits the people who share it in the form of traffic information. TomTom aggregates this data (several terabytes per day!) and can predict how much time it will take you to get from A to B. This way, TomTom is always up to date on the actual traffic density, roadblocks, and permanent changes in the road network. This is a very profitable business, and it makes them a goldmine to many other companies while improving their own services at the same time.
Blurring the lines between industries
What we find most interesting about this shift to computer connected cars, is the way it blurred the lines between the automotive industry and IT. We no longer speak of business opportunities in the automotive industry; instead we speak of business opportunities that arise because of the data we derive from transport usage in general. And this data can be anywhere: in a car, on an airplane or on the couch at home, as long as there’s some form of connection. This means that companies in all kinds of industries can benefit from data derived from the automotive industry and pretty much all other sectors too. Today, the success recipe is simple: where there’re customers, there’s data. And where’s data, there are business opportunities. And we’re just at the beginning of this new era.
What are your thoughts on the renewed automotive industry? Leave a comment and join the discussion!
PS. Want to know about the small piece of technology that made it all happen? Then read our white paper on APIs and how they boost your business.
PPS. Watch the impressive key note speech of Nissan CEO at CES 2017. Click here to start the video.