Connected Cars: Three Major Trends Disrupting The Auto Industry

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Over 60 percent of people make or receive voice calls through a vehicle interface while they’re in their cars, and approximately 50 percent use digital maps/navigation — meaning that a majority of consumers are already performing connected activities while driving, whether or not they’re thinking about the development the “connected car.”

This shift to increased connectivity during all moments of life — whether at home or on the go — has the auto industry undergoing a drastic transformation. as auto manufacturers and marketers alike think about how to create a frictionless, personalized, and safer experience for drivers and passengers.

In a panel at Parks Associates’ CONNECTIONS conference, execs from IBM Watson IoT, GM, and more highlighted three important shifts taking place in the auto industry in the age of connectivity:

  • The shift in focus from hardware to software: For decades, the “latest and greatest” in vehicles was primarily about hardware. But today, it’s not just about designing a more sophisticated engine or installing a “cool” stereo; rather, with the mainstreaming of voice-activated personal assistants like Alexa and Siri there is a trend towards voice control within the vehicle — and even the integration of AI systems.

“How are we approaching this at GM? We’re investing,” said Kurt Hoppe, global head of innovation, connected car at GM. “We’re not outsourcing [our software] development. But we’re also opening up APIs so we can get that outside-in influence, too — we’re opening up a marketplace for developers to determine which platforms [in the connected car] they want build for.”

Essentially, it’s about building out intelligence to understand who the people in the car are — and then using that to cater to what they might want. “We need to understand the people in the car [on a personal level],”  said Kal Gyimesi, automotive marketing leader for IBM Watson IoT. “Our [current focus] is asking how can we think about what devices the driver might bring into the car with them: how can that connect to the software [built into] the vehicle? Secondly, the vehicle should be self-learning: It should adapt to the way people are driving to improve fuel efficiency and more.”

  • The shift from unit sales to “shared mobility” services: Instead of simply thinking about individual unit car sales, auto makers must take into account the rise of ride-hailing/sharing, smart parking, and the advent of “shared mobility.”

As we wrote earlier this year, the notion of shared mobility refers to the range of technology that powers the wider “sharing economy.” This includes pooled ride-hailing services like Uber, Lyft, and more, but it most specifically refers to municipal transportation features of “Smart Cities” — like app-based bike or car sharing companies, such as Citi Bike and Zipcar.

Essentially, shared mobility means thinking about the ways in which technology has impacted shared transportation and the way people get around cities — and how it can continue to be made more advanced, efficient, and cost-effective.

But it isn’t just the likes of Uber and Lyft thinking about the future of “smart cities,” although both could certainly have ambitions in the space: Plenty of “traditional” auto and transportation brands will have a role to play, whether that means partnering with on-demand upstarts like ZipCar or striking out on their own. Audi, for example, is expanding its shared mobility ambitions with the acquisition of Silvercar, an airport-focused rental car company.

  • The connected car is now connecting to the entire IoT ecosystem: We’re seeing the beginnings of security system integration, connected cars recognizing home/away mode for the smart home — i.e., turning on your lights when you pull into the driveway — and projects like IBM Watson’s work with GM on powering connected in-dash payments so that drivers could pull up to pump for gas and pay from their dashboard automatically.

That said, empowering consumer choice when it comes to which devices they want to connect — and what data they want to share — is, as ever, paramount. “The consumer should have choice when it comes to what data they want to share, what [devices] they want to connect, et cetera,” Hoppe said. “Also, if consumers want to use Apple devices, if they want to use our native applications… they should be able to. It’s the users choice once they have those options — and that’s part of what we’re working on with IBM Watson.”