The year of 2022 will be marked by a big shift in car connectivity, with the rollout of the 5G network across the U.S. and many other countries in the world. This expanded bandwidth will unleash a new dynamic for the digital ecosystem.
Automakers will explore the broadened connectivity from different starting points, according to their systems and to the level of investment they have made into the connected car.
For decades, automakers have continued to assess and enhance their connectivity strategy based on the available technology options. The popularity of smartphones offered an accessible and less expensive choice for Automotive OEMs. They equipped their cars with tethered systems that made it possible to use smartphone apps to capture and transmit data.
As technology became less expensive and telecommunication providers enhanced the speed of wireless connections at affordable prices, the adoption of embedded connectivity increased, multiplying benefits and opportunities for automakers to foster and maintain an ongoing and extended relationship with their customers.
Today, regardless of the system of choice, technology is creating a new dynamic for the entire connected vehicle ecosystem. Within this new framework, automakers are empowered to steer their connectivity strategy in multiple directions and levels. Instead of technology driving strategies, now an automaker can choose the technology to support their strategy across the vehicle ownership lifecycle.
Automakers are continuing to learn how to harness the insights and create value from vehicle-generated data to deliver more digital experiences to consumers — consumers who have grown to expect and want more advanced digital experiences, even from their vehicles.
What is a Connected Car? In 2016, with the global expansion of telecommunications and technology, the connectivity of the car parc grew exponentially. Any vehicle equipped to connect to a wireless network (AT&T, Verizon, etc.) is considered a connected car. Currently, automakers use two kinds of systems to enable connectivity: embedded and tethered. An embedded vehicle is equipped with a chipset, which includes a wireless SIM card. This equipment allows the vehicle to access and send out data, download software updates or patches, connect with other Internet of Things (IoT) devices, and provide Wi-Fi internet connection to passengers. A car with a tethered system is equipped with hardware that connects to the driver’s smartphone. Both systems have the ability to collect and transmit data. Drivers do not need cars with embedded connectivity to leverage their telematics data.
The story of embedded connectivity started in the U.S. when General Motors (GM) introduced OnStar® in 1996. According to SBD Automotive, in 2021 the U.S. had the largest parc of vehicles in the world with embedded connectivity at 74 million.1
This growing car parc with embedded connectivity is expanding the market for connected car features and services which relies on multiple factors: technology readiness, government mandates, regulations, OEMs’ investment policies, vehicle lifecycle management, as well as customers’ expectations and acceptance. LexisNexis Risk Solutions explored the latter in a comprehensive survey with consumers.
1. SBD Automotive, Connected Car Forecast, 2021
In November 2021, LexisNexis Risk Solutions conducted a survey with U.S. vehicle owners who had purchased or leased a new or used car, model year 2017 or newer, within the past three years. Our objective was to uncover and map potential opportunities to enhance the customer experience throughout the stages of vehicle ownership, so that we can provide insights and support automakers as they continue to develop and execute their connectivity strategies.
In this report, we present the key findings of our survey and suggest paths for automakers to engage their customers while offering a more frictionless and convenient connected experience. We cover the entire vehicle lifecycle — from purchase or leasing of the vehicle to ongoing engagement with connected services programs, to vehicle resale when a new relationship starts with the subsequent owner.
After learning the results of our survey, we believe automakers will be able to:
Build and enhance the relationship with their customers
