Connected Cars Are A $1 Trillion Opportunity for Manufacturers
A windfall for carmakers comes at the expense of your precious privacy.
Long after owners drive off the dealership lot, the manufacturers are still making money off that connected car sale.
In-vehicle services and data mining are new revenue streams that car makers are factoring into their financial forecasts, according to KPMG's 2017 Global Automotive Executive Survey (PDF). The consulting firm polled approximately 1,000 automotive executives for their research, and found that 76% believe that connected cars are 10 times as profitable as their conventional counterparts.
That’s because the vehicle's always-on connection to the Internet through embedded SIM cards offer a pipeline directly to occupants that they can use to sell them services. Moreover, the roll-out of autonomous vehicles will free time the driver previously spent focusing on bumper-to-bumper traffic. One money-making way companies can help drivers fill that free time is by offering content subscriptions. Combined with potential sales of customer and vehicle data, this new business model presents as much as a $1 trillion opportunity for automotive companies, according to KPMG’s projections.
However, consumers may not be as eager to share their data as manufacturers would like. KPMG also polled 2,400 consumers from 42 countries for the study, and found large disparities between the consumer’s opinion of data ownership and the executives’—41 percent of consumers believe that they should own their data, while only 27 percent of executives feel the same way, and 30 percent of surveyed executives believe the manufacturer should own the data.
Expectations on whether or not consumers should be compensated for their data is another. It found that 84 percent of consumers want direct compensation if their data is generating revenue. On the other hand, 45 percent of executives believe that don’t need to offer consumers anything in exchange for their data.
KPMG notes that automotive executives may be taking for granted that that consumers will continue to give their data away in return for “comparably low benefits and rewards.”