New technologies integrated in car undoubtedly changes driving experience and automotive industry is adopting to new requests collaborating together. At the same time, it started a race between manufacturers, software companies and suppliers and all other ecosystem participant. That will, hopefully, contribute with more exquisitely products. Even at this very moment new models with connected car specifications are coming out of factories and those features are becoming important for users when buying cars.
Illustration 1: Pace
Revenues in automotive industry are constantly increasing
Besides all connected car features, connecting smartphone on car is not so odd thing to do anymore. It is possible to use various apps and even listen music with no need for traditional radio signals. Cars and carmakers even have become cautious for environment. Tesla started revolution with electrical car, and speculations says that they’ll embed solar roofs with integrated battery storage on car. Connected car offers a wealth of information that needs to be decoded and used by marketers to improve internal efficiency and quality. Huge companies have recognized car industry as suitable for testing new ideas and generating money. Nvidia, for instance, makes system for dashboards. Apple is working on iCar and Google has already launched its first self driving car. Some predictions shows that in next 10 years there is a decline in numbers of sold cars. It refers on overcrowded western countries that relies on public transportation, while is China just the opposite. Despite that, investments in new technologies, softwares and also cloud services drastically rises as same as their profit will in these 10 years. To be specific, according to Strategy&, revenues in automotive industry are increasing from $5 trillion to as much as $7.8 trillion, and earnings from $400 billion to as much as $600 billion. Certainly, most benefits will collect suppliers of electronics and sophisticated technology components and especially digital services and shared mobility.
Illustration 2: Market
Startups – friends or foes?
New players are entering the game and traditional carmakers will have to keep up with them. That means they’ll have to recognize in which connected technologies they will invest, predict customer behavior, speed up rate of innovation and produce distinction that will highlight them in crowd. Connected car is set of mixed technologies that complement user experience and who ‘strikes home’ will sell new cars. Mixed technologies are hardly successfully produced by one maker because no one is perfect in everything he does. Instead, for complete product sometimes businesses have to associate (which Toyota did investing in Uber, Apple in Didi Chuxing). However, in such investments, we should not forget what primary business is.
Special treatment in automotive industry have startups, which companies are afraid of, but also respects them. It is not rarity that giants join the startups because of access to technologies that has not been available for them before or just so that same technology doesn’t go into competitions hand. This is why it’s hard to predict how the industry will look in a near future, or years from now.