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Three Ways Connected Cars Will Impact the Automotive Industry

connected cars

Despite some recent negative press about security concerns, it’s safe to say that as the kinks are worked out Connected Cars will be the way of the automotive future. Connected Cars began as simply vehicles with in-car Wi-Fi and capabilities similar to a smart phone. Now, they’ve taken on much more in depth characteristics.  McKinsey & Company describes a connected car as a “vehicle able to optimize its own operation and maintenance as well as the convenience and comfort of passengers using onboard sensors and Internet connectivity.”

While there are some concerns about their security, as any device connected to the internet is able to be hacked, SNS Research still estimates that by 2020 connected car services will account for nearly $40 Billion in annual revenue, and nearly all car makers and communications companies are taking n...  

players connected cars

Technology has always been the most significant driving factor of the automotive industry, and this leap into uncharted territory will significantly alter the industry landscape. Here are three ways that the industry will be affected by Connected Cars.

 “Big Data” is going to get A LOT bigger

mobile data connected cars

While automotive industry leaders have realized the huge gains that can be made from leveraging Big Data, most data integration processes are still in the early stages. In order to get ahead of the curve, OEMS and dealers must embrace the Big Data revolution now, so they’re ready to harness the plethora of data that will become available as more and more Connected Cars hit the roads.

Telefonica predicts that 2020 connected vehicles will increase from 10% to 90% of the overall market, and with each new vehicle will come data on location, preference, driving style and behavior, car condition, and more. iGR predicts that mobile data usage by Connected Cars will grow 188% in the next five years, and OEMs and dealers have to be ready for this influx of information.

They can get started by getting a handle on the data they already have. By ensuring databases are integrated, cleaned, and operations put in place to keep it current, dealers and OEMs can avoid being blindsided by information without an organized, maintained database to house it. The sooner that current customer files are appended and integrated will also give a more comprehensive customer view as data from the Connected Cars is collected in the future.

Better consumer insights

 information sharing preferences


The Connected Car will be optimized to track and report its own diagnostics, which is part of its appeal for safety conscious drivers. Telefonica found that 61% of drivers felt that connectivity gives them more control to know when their car has a problem, and 44% believe it will improve their confidence in paying for services rendered from mechanics. While this information will make drivers feel safer, it also gives auto sales and service departments a head start in contacting in-market leads for upgrades and repairs. The most successful industry players will be those who use the transmitted data to proactively reach out to customers before a problem exists.

Auto insurers also have much to gain from the connected car revolution, as personalized, behavior based premiums could be the new industry standard. While many drivers are wary at first, surveys show that consumers are gradually warming up to the idea of lower insurance costs as a result of their own good driving habits instead of being charged based solely on factors such as age and commute distance.  Driving style and car condition monitoring are shown to be the two most chosen options when respondents were questioned about how much information they would share. As time goes on, it’s expected that consumers will begin to see the information sharing as a two-way relationship that benefits both consumer and retailer.

More opportunities for personalization


It’s no secret that today’s customer has a higher level of expectation than ever before- and a personalized experience is at the top of that list. A study from Infosys found 86% of consumers said personalization has some impact on the purchasing decision.  And they don’t just want personalized experience; they want consistently positive experiences through all channels

Selling cars no longer just happens on the lot, it starts way before that. McKinsey’s 2013 Retail Innovation Consumer Survey showed that over 80% of new-car and almost 100% of used-car customers now begin their consumer journey online, meaning that there are opportunities to target in-market consumers with relevant offers the moment they start researching a vehicle purchase, not the moment they walk onto the lot.

The data collected from Connected Cars will provide a whole other facet to the 360-consumer view, and OEMs and dealers need to be ready for this. By combining all available customer information now they can get ahead of the game in forming comprehensive profiles to give their marketing the best foundation possible. This also ensures a smoother customer experience across multiple channels as integrated information can derive insights for online, mobile, and in person experiences.


In the next 5 years it seems that non-connected cars will become a thing of the past. And while it’s not the hovercrafts we were all promised, this evolution is still a massive leap for automotive technology. 2020 is not as far away as we may think, and auto industry leaders need to start preparing their data processes and databases now in order to meet the needs and expectations of the consumers of the future.

For more information on building your auto database with data on 180+ million vehicles with current ownership information, check out AutoID.

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Tags: Automotive, big, cars, connected, data


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