Emerging technology is seismic shift
Las Vegas—More than 170 million new cars with some level of connectivity will be in circulation in the U.S. by 2025. That figure comes from Frost & Sullivan Research & Consulting, which presented data at a seminar at AAPEX, “Trends in Emerging Technologies: Industry Plans and Consumer Reactions,” discussing the market drivers behind technology in modern vehicles and how the industry is planning for the future.
Connected cars and data monetization
Kumar Saha, research director at Frost & Sullivan, said the purpose of connected cars is ultimately to “transmit data,” which will eventually become “currency.”
“Connectivity enables visibility,” Saha said. “Fleet managers and technicians will be able to see what’s going on with a vehicle while it’s still on the road. As the industry evolves past the ICE (internal combustion engine), and hard part failures become less common, data will be monetized.”
Trouble codes that surface while a vehicle is in operation will automatically get transmitted to a shop — Cummins, for instance, is introducing those capabilities in their trucks already, Saha said — and shops will be able to do remote updates, diagnostics and message consumers about needed service or repair via onboard messaging systems.
“We’re constantly giving away our privacy for convenience,” Saha said. “We do it with smartphones, computers and social media, so cars aren’t going to be any different. The real question becomes who owns the data?”
New data systems that include ADAS, infotainment and telematics on connected cars have information that can be harvested.
“What we’re seeing OEMs do is work data harvesting and data usage into the contracts of new car sales,” Phil Atkins, director of strategic research and planning for AASA, said, “so they’re better able to communicate service recommendations with consumers.”
Saha added that feature upgrades and cybersecurity information will likely be held captive by OEs, but operational information, as it relates to gaining diagnostic and safety information to repair a vehicle so it’s safe, will be covered under the “Right to Repair” act.
EVs and autonomous vehicles gain and lose ground
Millennials have been the main drivers of demand for in-car technology, with 69 percent of those surveyed saying they “put a lot of thought into the tech features they want in a vehicle.” Only 44 percent and 49 percent of Gen Xers and Boomers, respectively, said the same thing. Karl Brauer, executive publisher at Autotrader and Kelley Blue Book, added that the evolving landscape of car subscriptions are a result of consumers, particularly Millennials, push for fluid choices in the newest make and models with the most advanced technology.
“Consumers have shown they like the idea of being able to get the newest makes and models without bearing the full cost of car ownership,” Brauer said. “Lowering ownership costs is the driver behind car sharing, subscriptions and the rising interest in electric vehicles (EVs).”
According to an AASA report, EV service and repair will be a $1 billion industry by 2025. As the charging infrastructure and battery technology increases, reducing “range anxiety,” so too will consumers interest in EVs.
“The cost of an electric car is primarily driven by the battery,” Saha said. “Right now, we’re seeing the highest consumer interest in mild hybrids — where the ICE still assists in powering the vehicle and battery — and the cost for battery replacement stands at about $1,500. But, by 2023, EVs are forecasted to be widely adopted as they achieve mass market pricing.”
Atkins added that, while increased adoption of EVs by consumers will lower parts consumption from the traditional ICE, EV parts and service will likely cost more even though hard part failures may drop.
Where EVs have gained popularity, autonomous vehicles have backslid due to negative nationally publicized incidents in 2017, Brauer said.