Drivers ready for connected cars, says Telefónica report

Telefónica’s second annual Connected Car Industry report uncovers rising awareness of in-car connectivity among users, and says connected services are starting to influence buying decisions

Buyer awareness of and demand for connected car products and services is growing, according to a report from telco and mobile operator Telefónica.

Its second annual study of buying behaviour and intentions found that 70% of drivers were either interested in using, or already were using, connected car services, and 80% expected that they would ultimately be able to experience the same standards of connectivity in their vehicle as they would in their home.

The findings reinforce those of a recent forecast by Juniper Research, which suggested that in-car connectivity will soon become a standard feature.

According to Telefónica, half of consumers now consider connected features, such as in-built connectivity and the ability to plug in smartphones, as a key part of their next car purchase.

Greater safety, fault diagnostics, early-warning systems and smarter navigation were the most popular features, and usage-based insurance was picked out by UK drivers.

The survey also uncovered growing acceptance of car-sharing schemes and new models of ownership, with 35% of drivers saying that in 20 years' time they did not expect to own their own vehicle in the same way they do today.

When it came to payment models, British, German and American drivers largely favoured basic connectivity as standard with bolt-on options. Other nationalities preferred one-off payments and pay-as-you-go models.

“I see a huge expansion beyond legacy telematics such as vehicle health reports, safety and security, crash notifications into active safety and automated driving aspects,” said Kia Motors CTO Henry Bzeih.

“I also think vehicle-to-vehicle communication is going to grow very quickly in the next five years. The beauty of that technology is that the communication protocol can be used for a host of other services beyond vehicle communication, so it benefits the wider infrastructure too.”

Greg Ross, director of product strategy and infotainment at General Motors, added: “When we talk to customers about connectivity they say, well, it’s a car and so what I need it to do are the things I bought a car for. They want it to be safer, more intelligent and more economical.

“Connectivity is a chance for OEMs to look at how we can help to reduce costs for customers and make cost of ownership lower by giving advice on how to drive more fuel-efficiently, or helping you find the lowest cost source of fuel or the most efficient route. Can I, by providing data for things like usage-based insurance or pay-as-you-drive insurance, can I save you money on insurance?”

Less popular was the idea of in-car entertainment, according to Pavan Mathew, Telefónica global head of connected car. He said that consumers seemed to recognise that safety concerns and the short nature of the vast majority of car journeys limited the opportunities for entertainment, which would probably remain restricted to keeping back-seat passengers occupied on long trips.

Mathew said that responsibility for ensuring that in-car connectivity was safe rested with the entire industry, but that ultimately, “it is the OEM’s brand taking on the liability”.

He added: “I would expect OEMs to set policy management, and brand their own services as well.”

Juniper’s report suggested that the advent of Apple’s CarPlay would help make the market by providing a route into vehicles for iPhone devices, but Mathew thought this unlikely.

“Apple’s dominance in devices means there is demand from the consumer side for integration,” he explained, “but the OEMs will be the final determinants of the degree of integration with Apple. Apple will never dominate in cars as they do in handsets, because it comes down to questions over liability.”

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