Connected Car: “Appetite Grows with Eating”

The automobile industry is stepping up the pace for the connected car, but which functions do motorists really want to use? We interview Detlev Mohr, Senior Partner at the consulting company McKinsey and co-author of a survey of German, American, and Chinese car buyers.

Are car buyers really interested in connected cars, Mr. Mohr?

They certainly are and they will grow increasingly interested as time goes by. That is hardly surprising either. Consumers are accustomed to using the smartphone for managing parts of their social life – for organizing, for accessing information, and for networking with friends and acquaintances. And they have this need when they are on the move too.

According to the findings of your survey, Chinese car buyers are much more open-minded about connected cars than Germans. Why do you think that is the case?

Concerns about data confidentiality are clearly an issue. In Germany a much larger number of customers see data protection as an issue than in China – especially as some aspects have yet to be clarified and customers have yet to gain experience of connected cars. Another factor is that in China customers are keen consumers, technophile, and young. They respond very fast to new trends and features, including the connected car.

Why did you, in contrast to other studies, ask the people you interviewed how interested they were in individual services for the connected car?

If you just use the generic term “connected car” what you get will be different definitions of the concept. That was one of the reasons why we chose to focus in our study on specific possible offerings and features and asked people how they felt about them.

You divided offerings into three categories: generic data services, driving-specific data services, and data-assisted driving functionalities (see chart). How do you define them?

Data-assisted driving functionalities influence driving safety directly. There is also a critical interface for driving-specific data services like navigation – if I integrate them into the vehicle. Generic data services are less of a safety factor because they have nothing to do with driving as such but take place in the car. They also include services that are shaped outside of the automotive world, such as Facebook or LinkedIn, and that involve external partners.

Which service is the most popular?

We asked customers which service they would be most likely to provide access to their data. The result was connected navigation and mobility solutions that are very closely connected with driving, such as car sharing. The inference to be drawn is that these services are the most exciting prospect for motorists.

Generic services like games and entertainment seem to be less in demand. Does that surprise you?

Not really. Motorists cannot really envision how games can be sensibly combined with driving – because no solution has yet been devised. But they might become relevant in a few years’ time when autonomous driving is available.

What makes you so sure? Many motorists you interviewed were reticent about the possibility of making data available for automated functions.

Many car buyers are very sensitive on issues such as where and how they use their cars. Customers want to know what they will get in return and whether their data is in good hands. At present there is insufficient clarity about the conditions under which the driver is to make his data available. Yet in reality consumers already divulge substantial amounts of data to a large number of popular smartphone apps – and do so because they see using the service as important.

Could it also be that people simply like to do their own driving? Or are worried about the safety of an autonomously driven car?

Everybody naturally expects autonomous driving to provide functions that are safe in traffic, and manufacturers are investing a lot of money and technological competence to ensure that they are safe. That is why automotive autonomy will increase step by step. And if the customer has the option of letting the car drive by itself, he can take it or leave it. I cannot imagine that anybody likes driving in a traffic jam. Driving across country on a fine day can, in contrast, be great fun. What matters is to have the choice.

What functions should carmakers and suppliers now concentrate on?

In principle, as with any product, there are different customer segments. Some want in-car entertainment; others would like to feel safer on the move. These different needs must be satisfied. Carmakers and service providers can also generate new needs. Appetite grows with eating or, in this case, with attractive offerings for the connected car.

An example?

If you had asked somebody 13 years ago what they imagined a smartphone was, they would not have come up with anything very specific. Yet there are few limits to developers’ creativity. The crucial factor is to offer customers as many services as possible via a platform and a user interface – and to do so at the speed and with the user experience to which they are accustomed from their smartphone.

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