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Today the concept of a connected vehicle is more encompassing than ever.  Commercial vehicles (construction and farm equipment for example) are all about generating revenue.  The light vehicle/passenger car world is about convenience, safety and quality.  Connected vehicles are delivering value on both fronts and are increasingly expected to provide more.  But there are significant challenges involved…such as who is at the center of the business?  How might the traditional value chain of manufacturer, dealer and consumer be disaggregated or how will 3rd parties disintermediate that relationship?

Today’s driver is surrounded by an amazing and ever increasing number of trends and pressures.  There is “electrification” including concepts like data and communication, computing and storage and the growing number of electric control units and drive by wire systems, fuel management, braking, steering, etc. in effect making the vehicle a sensor platform. Vehicles and/or drivers are “connected” and can avail themselves of infotainment, location or usage based services, and commerce.  Urbanization plays a role, traffic congestion and air quality, policies and regulations and recently changing attitudes toward vehicle ownership and mobility.  Then there is consumerism, digital identity, social networks, safety-both physical and digital and content.  The driver is impacted like never before.

In this blog and ones to follow, we will explore some of the impacts of some of those trends and challenges on not only the connected vehicle but also the consumer or operator.

The connected vehicle ecosystem includes many traditional and well understood participants but is increasingly joined by new participants that challenge existing business models and drive new ones.  Their roles and level of involvement continues to evolve, creating new opportunities.   In addition to the drivers/passengers and operators, there are the traditional participants such as the OEM/Manufacturer, wireless carriers, fleets, software providers and of course dealerships.  There are emerging participants such as 3rd party providers of goods, services and software, some of which offer the tantatalizing prospect of new business models. There are utilities, fractional vehicle ownership companies and “transportation as a service” providers, and there is governmental and public administration.

We certainly see wireless carriers playing a big role in the connected vehicle, whether it be passenger or commercial.  Their role seems secure for the present.  Providers of parking services, refueling/charging and location/consumption based services such as insurance will continue to play an increasing role, perhaps contributing to the disaggregation of the value chain.  Remote diagnostics and remediation will continue to grow and be a valuable expectation of the ecosystem. This will remove latency in the quality of light vehicles and enhance the serviceability and revenue generation ability of commercial assets and equipment.  The OEM, typically at the epicenter of the ecosystem, will be challenged for that position.  Dealers will want a growing role and the connected vehicle is an important tool to achieve that role.  Fleets become ever more significant as ownership trends evolve.  It will come down to who “splits” or disburses the revenue enabled by the connected vehicle.

And you can expect that the consumer will mount a significant challenge to be at the center of the connected vehicle universe.  After all…that is from whence the money flows…

Join me in the next installment of the connected vehicle and the business path forward where will discuss the “Wild West…”

See you then…

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