Cars are more than just a mechanical solution
to get you to your destination. Nowadays,
cars can help you, connect you, and direct you.
Few years ago, the concept of “connected cars” has been
moved to the car’s showroom. So if you do not know it yet,
it is well worth catching up.
Two car experts tried to decode these connected cars from the consumer’s viewpoint.
The automotive manager and senior analyst of America’s HIS iSuppli, Mark C. Boyadjis,
provided overall insight about the car industry. On the other hand, the marketing senior
vice president of Hughes Telematics, Kevin Link, provided a company’s
inside view of automotive telematics solutions’ production for major manufacturers.
Read through the survey below on the latest connected
car market and where it is heading in the future.
What is A Connected Car?
Recently, the preserve of the rich for their next automobile purchase is possibly a connected car.
A connected car is also called the modern car. More than 90 percent of car sales in the United States today have Bluetooth. Boyadjis said that it is essential for cars to have connectivity in them. However, what connected cars are means a lot more different. He said that connections may come from embedded telematics, mobile devices, and broadcast services. He also said that connections may also bring security features, emergency services, navigation, Pandora Internet radio, traffic and weather, Google and Bing search results, information and so much more.
Link explained what has driven these high-tech motor demands. One of the highest worldwide trends is related to how the society has become more connected. Nowadays, people are more connected to their home, families, phones, work, and friends through a multifaceted network that seems to be always on. The automobile is next in line on the network, providing a surfeit of connected services for the manufacturer, dealer, and consumer.
He also said that as the society’s demand for constant connection increases, the automobile becomes a device that connects the driver to the outside world. Automobiles were used to be a simple means of getting to a particular destination. Nevertheless, Hughes Telematics believe that there is something as important as the journey itself.
Boyadjis predicted that the availability limits of connected services depend on the consumer’s demands and the associated costs. Thus, with the growth of the consumer’s awareness of the connected cars and the costs that keep coming down, we can expect more connectivity in Telematics’ cars.
What Trends to Look Out for?
Link said that the trends of these connected cars are all about providing its driver more solutions to make their ride enjoyable and seamless from ignition to parking. Though automotive telematics started with security and safety services for automobiles, it has now advanced to informing and entertaining consumers.
“Previously, connected cars are relegated only to luxury automobiles and to consumers who can pay for the service subscription fees. While these vehicles are still being used and are still evolving today, other automotive solutions have come in fulfilling the needs and wants of the mass market,” says Boyadjis. He also said that it includes the same services offered to the luxury market, but for lower cost or sometimes for free. For instance, Ford Sync and Toyota Entune solutions have the ability to bring in vehicle diagnostics, 911 assistance, news feeds, Pandora, Bing searches, OpenTable.com reservations, Twitter updates, and more.
The democratization of the car technology from the Ford Fiesta to Hyundai Sonata is the largest innovation in the market today. And by taking the kind of brand new connectivity cars on the road, Hughes Telematics has democratized the mass market even more.
The aftermarket connectivity is also a new trend which is just in its infancy. It is connecting automobiles that have no embedded system. Most of the automobiles that have been sold after 1995 in the U.S. have “OBD-II port” or also called as on-board diagnostics. It is used for defining which part of the vehicle is malfunctioning or needs repair as well as decoding the check-engine light. It is also used for vehicle emission tests.
Through the OBD-II port, the aftermarket telematics system can be connected to a vehicle. It delivers almost all of the same services such as the Automatic Crash Notification, Smartphone connectivity, emergency calling and more. There are hundreds of millions of automobiles that do not have the embedded telematics system and probably they do not even have any access to telematics systems at all. This system is greatly significant in places like the United States because their average age for vehicles is more than 10 years.
If you want a glimpse of the Hughes Telematics’ latest trends that are worth looking out for, check their roadmap. Link gave a short insight about it. He said that the Hughes Telematics’ product roadmap for brand new connected automobile services will greatly influence the next generation of telematics systems, which enables them to deliver services through various channels like the in-vehicle head units, interactive voice recognition, web portals, Smartphone apps, and live agents.
Who are Producing Connected Cars?
Toyota, Hyundai, BMW, GM, and Ford are the ones producing connected cars right now. Boyadjis said that in most cases, the said OEMs have either created the solution or significantly evolved it to present new designs, capabilities, and solutions to the market.
Ford provides SYNC; it is an integrated communications, entertainment and mapping system. GM offers OnStar; it is a subscription-based system for communications, remote diagnostics, and navigation. Currently, Toyota offers a system similar to OnStar with added “Safety Connect” service. It goes the same thing with BMW; they have “Assist” service and the new “BMW Connected” for iOS apps.
Hughes Telematics is currently working with Mercedes Benz USA. They provide more than 40 services through the Mercedes Benz platform. However, according to Link, such systems are getting more common as most automobile makers are now incorporating these connected services in their cars.
Who Buys Connected Cars?
There is no empirical data on telematics’ demographic buyers. However, the average age of their subscriber or user is decreasing. Boyadjis said that most of their car buyers now are younger as they are the ones who gain more access to telematics systems at a low or mid cost vehicles.
Generally, telematics is designed for buyers from the mass market. From college graduates with no money to company CEO with a lot of cars, there is always something that will interest you in Telematics. Moreover, with the updated variations of the systems used by different OEMs, they come up with a wide variety of solutions and price points that car buyers can take advantage of.
There are mainly four demographic groups that the Hughes Telematics is looking at.
These groups have been influenced by the benefits of connected cars.
The first group is the “affluent demographic”. Link described this group as the ones who want peace of mind and convenience associated with the connected cars. The second group is the “tech savvy demographic”. Link also identifies them as “the early adopters of connected automobiles”. They are not the young demographics. Instead, they are the ones who have thriving and general interest in the trends of technology.
Connected cars are also appealing to families because of the presence of the safety features. This is where the third group came from, “The Out-and-About Parent demographic”. Link said that they see and are drawn to the value of convenience, safety, and security services provided in Telematics’ packages.
And last but not the least is the fourth group, the “Gen-Y demographic”. Link explained that they are the ones who feel excited about any concept that makes an automobile not just a means of transportation but also a means of exploration and connection to the world.
Who Will be the Next Manufacturer of Connected Cars?
There are only a few established car manufacturers in the market. So who else want to jump into the connected vehicle’s arena? There are three car manufacturers highlighted by Boyadjis. They are all noteworthy.
Audi recently introduced their brand new Audi Connect Telematics. It comes with a 3G and GSM SIM card which enables the Google Earth View in the car for daily navigation. It also has Google local POI. Hyundai has also newly announced its Blue Link telematics system on their Veloster and 2012 Sonata models. A similar approach has been offered also by OnStar at a lesser cost. And lastly, Kia has launched their latest solution known as Kia UVO. It is a telematics solution that is similar to the one used by Ford Sync. It utilizes the user’s mobile device. For now, it does not have off-board services yet, however, they estimated that they will have it within a year or more.
As the Telematic system is expected to become a standard feature in cars by the year 2015, Link is expecting that many mainstream car manufacturers will sooner or later jump on board. The acceptance of the Telematics technology in the car industry shows a significant growth, which only points out to a high adoption rate among car manufacturers. They either implement it already or they plan to launch the connected services in their automobiles.