Consumer Expectations, Opportunities
and Challenges for the Industry
The connected car topic is not a new one – it has occupied the thoughts of automotive manufacturers and suppliers for many years. However, although the topic is not new, OEMs continue to invest billions into R&D efforts in order to provide vehicle users with enough added value to influence their choice of brand, their purchasing decisions and eventually, leverage connected car services extensively enough to establish a new source of revenue. In addition, the collected customer information will be used for further product development, personalization, improvements in service quality or customer loyalty.
But is this really happening? Is the potential of connected cars being properly utilized by end users? How are end customers benefitting from connected car solutions?
Against this background, NTT Group, in collaboration with teknowlogy | PAC, conducted an online survey of more than 3,000 drivers from Germany, UK, Italy and Spain to evaluate today’s drivers’ experiences, expectations and concerns regarding connected car services and technologies. In order to include the industry perspective, 20 expert interviews were conducted with automotive experts from OEMs, automotive suppliers, IT and insurance providers as well as the public sector.
Consumer Awareness and Expectations
When considering the differences by vehicle type, premium car drivers are more likely to base their choice of brand on the availability of connected car features than on traditional criteria (58%). At the same time, however, premium drivers are more likely to regard connected features as a necessity, justifying higher prices, rather than true differentiators.
Detailed analysis also shows that in particular the younger generation of drivers (17-29 years old) are more likely to base their choice of brand on connected car features, whereas Generation X (+45 years) more often base their choice of brand on traditional criteria. This would reinforce the general assumption that the topic of connectivity has a much higher value among younger people, and that the mindset in which engine power or consumption matter more, will continue to subside with the generational change.
From a country perspective, the study has shown that German drivers are overall much more traditional in their decision-making than their European counterparts in the UK, in Spain and Italy, as they put more value on traditional criteria than on connected car functionalities and services.
Which statement applies best to you?
Connected Car Availability and Adoption Level
Across all connected car services examined, on average
A number of common connected car services and features have been reviewed in our study. These range from traffic- and driver-safety-related features (e.g. street condition warning) to services targeted at improving the level of convenience (e.g. remote services, offboard journey planning) and comfort (e.g. digital personal assistant, concierge services).
When it comes to the availability of connected car services and technologies, it can be observed that use cases which have been available for some time now (i.e. remote services, real-time traffic information and street condition warnings) are also the most prevalent.
Which of the following connected car services and technologies have been available to you and which have you used or would like to use?
Most respondents say that the presented connected car services are not yet available to them. This is especially the case for “premium” use cases (e.g. concierge services are not available for 69% of respondents).
However, the availability of services increases proportionately with the price of the vehicle. Many more connected car services are available to premium vehicle drivers than they are to mini and compact car drivers.
Connected car services which have been available for some time now (e.g. real-time traffic information, remote services, street condition warnings) are also the ones which are more likely to have already been used by drivers. For instance, real-time traffic information is already available to 50% of respondents, and with 40% adoption, this is certainly one of the more mature connected car use cases. As a result, with increasing maturity, well-established connected car services can be seen as a differentiator when choosing a car.
Reasons for a Negative Experience
Among the drivers who have already used connected car services, bad usability has been named as the major reason for their negative experience with these services and features. For 46% of respondents, the complexity of using connected car services has resulted in an overall bad experience. For 37% of respondents, a bad experience is the result of features or services that are not yet working as well as they should.
Reasons such as data privacy (28%) or data security (27%) are much less likely to cause a bad experience than one would expect. This would suggest that topics which may be perceived as requiring much more marketing effort are actually not as negatively perceived by consumers as might be expected.
Future Direction of Connected Car
With the topic of the connected car advancing further, so does the availability of ever more possible use – and business – cases. Results have shown that at this point, there has not appeared “the next big thing” yet – or in other words, a connected car service or feature in which consumers see an extraordinary added value. Indeed, all connected services examined in this study appear to produce a more or less similarly large added value to drivers.
Proactive services in particular, namely a car suggesting the cheapest gas station or favorite restaurant nearby, as well as detecting a driver’s fatigue, is regarded as the most valuable future connected car function, with 43% of respondents seeing a large added value in this feature.
Most striking is the question about self-driving and autonomous driving capabilities. 42% of respondents see a large added value in this feature. However, this number will be expected to significantly increase in the future as more people actually experience some form of autonomous driving.
The seamless integration of personal devices is considered by 42% of respondents as producing a large added value. However, the industry expects this to gain in significance over the next few years as the vehicle will be seen more and more as another digital touchpoint rather than just a tool for transportation.
In which of the following future connected car services do you see a large, small or no added value to your driving experience?
Consumer Perception of Connected Car Services
What is your general perception regarding connected car services?
Consumers have a pretty clear perception when it comes to connected cars. Respondents across all considered countries agree that, with the addition of connected car services, the overall (monetary) value of their car increases (81% agree or somewhat agree).
At the same time, for 80% of respondents the active and passive safety increases with the help of connected car services. Drivers of premium and economy vehicles in particular believe that with the help of connected car services, the overall driving experience becomes more convenient.
Although 66% of respondents agree or somewhat agree that driving becomes more unsafe due to increased distraction, almost the same number of drivers (63%) believe that with the addition of connected car services, the driving experience will also become more fun.
Especially German drivers are a bit more skeptical when it comes to the collection of driving behavioral data in order to improve the driving experience. Only 45% of German drivers would agree or somewhat agree to this, whereas the average European driver is much less concerned (64% agree or somewhat agree).