Huawei and Telefonica recently completed the first successful test of vehicles communicating with each other over a 5G-based V2X (vehicle-to-everything) network.
Elon Musk has said that Tesla is planning to embark on a road trip across the US in a fully self-driving car this year.
Google’s Waymo and Uber were at one time partnered for autonomous car technology but that has quickly turned to rivalry as the live testing will soon become a reality.
GM expects to launch autonomous ride sharing within the next two years. Ford, BMW, Mercedes-Benz and others have outlined a similar timeline for their own self-driving taxis.
The cost of LIDAR and telematics technology is meanwhile falling fast. Daimler with Bosch is testing driverless taxis this year, with the goal of a commercial launch in 2021.
In a recent global survey, 37% of car owners revealed they would like to give up their car or they could get by without it. Another danger sign for the ‘car culture’ was the fact that 3% expect to be a car owner for less than a year, and another 17% reported they will give their car up sometime within the next five years. If forced to choose between their smartphone and their car, 30% of car owners said they would rather give up their car than their phone.
Like the character in Ernest Hemingway’s novel The Sun Also Rises, who goes bankrupt in two ways “gradually and then suddenly”, the future can appear far away. But when it comes, it comes very quickly.
Tony Douglas, Head of Brand, Marketing and Communication for BMW Mobility Services and David Karlberg, Head of Product Management at Wireless Car recently took part in a discussion session for TU Auto. They discussed how the automotive OEMs are taking the critical steps to engaging with their customers in the digital world, how they are moving more towards thinking about apps and new types of mobility solutions.
Automotive developments in hardware and software
“A car company today must have an app presence. There’s no two ways around it,” said BMW’s Tony Douglas.
“Being a digital brand, and taking that crucial step forward….It’s basically thinking about the car and what you provide as a combination of hardware and software,” commented David Karlberg.
“It’s really the hardware, software and services, and executing all of that on the hardware of the car. It’s combining it all together,” he added.
Just as it exists in insurance, there is today a huge ecosystem opportunity for the vehicle makers to shift the way they think about customer engagement, from a one-off, pre-purchase contact, to a lifetime relationship.
“There is a huge opportunity,” commented Tony Douglas. “Most digital players, if they get it right, drive loyalty. They create an ecosystem where it is a joy to stay, and a pain to leave. I think we [the OEMs] have to work in this area, with a platform. The user or owner in the next generation will expect it.”
Consumers today have one-click access to everything, from a ride home, to music, to the latest movies, to pay-as-you-go insurance. So the key question for the automotive industry is, are the young generation really prepared to purchase and own a car in the traditional way?
“This attitude change means an impact on insurance, on the finance industry, an impact on the whole retail set-up and everything else,” commented Tony Douglas. “I think we should wake up. If we want to be digitally-branded, we should really match the expectations of the digital generation.”
There is a clear trend to service-based capabilities, but with still many unanswered questions. In future, can we expect the vehicle OEMs to be rather like fleet operators, creating new B2B relationships for insurance, rather than the current thousands of B2C relationships?
If cars are going to be connected, to consumers, to other cars, to street infrastructure and to our homes, have consumers really bought into all this new connectivity?
Everybody involved wants consumers, and consumer data, to be at the centre of this world. But that customer understanding, that customer loop, has not really been closed yet. Insurance providers and other participants like the data intermediaries and the auto dealers are going to have a critical role. A recent meeting of the European Automobile Manufacturers Association (ACEA) looked at this aspect of partners working together, to create more of an experience-based approach to vehicle ownership.
Insurance providers and auto manufacturers share 100% of the same customer base, so the opportunities for partnerships are rife.
But how are we going to cross the digital divide? How are we going to get everybody involved, sharing data?
“I see it as an opportunity to move into this fully connected, on-demand world,” commented David Karlberg.
“As with a lot of things in our society, it’s the fact that the opportunity is there, the technology is there. It’s about combining it with our actual [vehicle] hardware and taking the automotive industry into that economy….To me, it is not a matter of the things we need to do. It is a matter of the brand positioning of the OEMs, and what does the user experience look like?”
In the automotive world today, looking at the purchasing experience (and the paperwork involved) there is a massive gulf compared to the world of the user, the digital consumer.
It’s possible to sign up for any number of on-demand mobility services like Uber, Lyft, Curb, Ola or Grab (in Asia) with just your credit card and usually a photo of your ID. Send a short video of yourself, to show you’re alive and your information is automatically populated. It is a purely digital experience, and the necessary data flows in the same time as it does to pick up a Starbucks.
Whoever drives that optimum customer experience – for insurance and the automotive sector – is going to have a huge advantage.