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SUMMARY 00

Connected Car disruption in the Industry

Source: Renault Nissan, Roland Berger

Traditional Car > Connected Car

Consumer centric

Value creation during life-cycle

On-board & Off-board connectivity

Continuous evolution

Integrated system engineering & End-to-End architecture

Short cycles (6 months)

Agile consumer electronics development

High SW complexity (+100M code lines)

Product centric

One-off vehicle sale

Stand alone on-board

Fixed features

Sequenced component by component approach

Long cycles (3+ years)

Traditional automotive development

Low SW complexity (1M code lines)

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Data based routing

Smart factory

Automomous

Drones

E-Comme

rce

Infotainment

Demand forecast

Big data

CONNECTIVITY

Cloud

Robotics

CPS

Apps

Social networ

ks

Mobiles

Wearables

IoT

Big data

DRIVERS OF DIGITIZATION 01 INDUSTRIAL INTERNET

Digital transformation effect through key areas.

Source: Roland Berger

Logistics

Predictive

maintenance

Pure

digital

products

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CONNECTED CAR SYSTEM EVOLUTION 02 CONNECTED CAR GROWTH

Brand CRM

system

Services & platforms providers

system

Connected Car &

Services system

1. Car

2. Smart Car

3. Smart, Connected Car system

4. Connected Car & Services systems of systems

+

+

+

Smart & Connected

Car systems

Customer Digital Life

system

Monitoring

Autonomy

Sensors enable monitoring of the products condition, environment,..

1

Increasing capability of Smart, Connected products

Increasing capability of Smart, Connected products (incl. cars) give expansion of industry boundaries into

larger systems of systems.

Source: Harvard Business Review, Nov’14, IoT

Control

Optimisation

Software embedded in the product enables control of product functions,..

1 & 2 allow analysis to optimise product performance, predictive diagnostics,..

Combining all 3 allow autonomous product operation, self co-ordination with other products (V2X)..

2 3 4

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IMPROVING RELATIONSHIP WITH OUR CUSTOMERS 04 CONNECTED CAR BENEFITS

Connected car technology allowing us to build new relationship between customer, car and the brand.

Data for optimising product & up-to-date cars

Tailored-made services &

offers

Direct & continuous

relation with the Brand

Full digital interaction

Extended car usage

New mobility enablers

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CONNECTED CAR PARTNERSHIPS 02 CONNECTED CAR GROWTH

Many new actors coming into the Connected Car world……and new partnerships being created.

Traditional players

New players

? Source: Roland Berger

?

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CONNECTED CAR COMPETITION 02 CONNECTED CAR GROWTH

Opening up challenges to traditional OEM’s business

?

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CONNECTED CAR REVENUE OPPORTUNITY 02 CONNECTED CAR GROWTH

All chasing forecasted revenue opportunities within the industry.

Source: McKinsey&Co

2750

4000

720

1200

30

1500

0

1000

2000

3000

4000

5000

6000

7000

8000

2015 2030

Bn €

Automotive Revenues (High disruption scenario)

Recurring revenues • Shared mobility

• Data connected services, incl. OTA

Aftermarket • Growth with increase vehicle sales

One-time vehicle sales • 2% annual increase from growth in

emerging markets

Vehicle sales

dominant

Recurring revenues

significantly increasing

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CONCLUSION

Connected technology not only changing the cars themselves, but also

disrupting the car business as a whole.

Digital content and services have become the industry’s primary source of

growth, opening new challenges from technology companies.

OEM’s required to develop new skills and capabilities, to manage the growth

of digitisation.

More fundamentally, OEMs oriented to their traditional role as product

manufacturers must embrace a new identity as service & mobility providers.

06

Source: Strategy& analysis