connectivity and big data analytics in automotive · 2015-03-13 · • entertainment and media ......

Connectivity and Big Data Analytics in Automotive

自動車分野におけるコネクティビティとビッグデータ分析

Takashi MORIMOTO

Consultant

Automotive & Transportation

2 2015 ICT Outlook Executive Briefing

Connectivity in Automotive


North America

• Capitalize on opportunities with

implementation of LTE.

• Most vehicle manufacturers offering

telematics services with average

subscription age of 3 years and more.

• Leaders in innovation with respect to HMI.

• Greater demand for Big Data analytics.

Brazil

• Despite delay in SVT mandate, installation kick off has

initiated.

• More than 50 percent new vehicles expected to have

tracking chip by august 2014.

• Tier 1 suppliers and OEMs focused on packaging value

added connected services.

China

• Embedded infotainment modules on a rise with

focus on new HMI technologies.

• Fleet telematics on a rise with major penetration

in Taxis and government vehicles.

• Non-native OEMs like BMW, Ford still reluctant

with app based approach.

Russia

• GLONASS mandate kickoff with

positive impact on telematics

services.

• TSP’s focus on offering value added

services with opportunity to reduce

insurance premiums associated to

high vehicle crime rates

Europe

• Delay in eCall mandate due to delayed testing and

development.

• Connected infotainment catching up; alternate revenue

models from transaction and merchant services.

• OEMs coming out of nutshell to offer innovative HMI

concepts.

Connected Car Market: Key Regional Highlights, Global, 2013

Key Regional Highlights for Connectivity Services While LTE is noticing commercialization plans in North America, Europe is expected to catch up with the

eCall Mandate


2013 2016 2018 2020

Non-connected

Connected

Connected and Non-Connected Cars Creating Big Data

Opportunities

Connected and Non-Connected Cars, North America and Europe

• As of 2013, Frost & Sullivan expects less than 2% of vehicle data to be useful for monetization.

• Meaningful data sets are expected to grow from 10MB to 5GB in an average, connected car by 2017–

2018.

• Big Data analytics is expected to add value to business models involving autonomous vehicles, which

are expected to generate more than 750MB of data per second.

34.0–34.5

Million

8.5–9.0

Million

Key Data

(2013)

• Diagnostic data

• Entertainment and media

related information

• Driver related information

• Data from sensorics

• Camera related information

• Navigation, connected

LBS, and geo-fencing

data

• Telematics related data

(e.g., eCall, bCall)

• EV-specific data such as

vehicle charge and

locations of charging

stations

Key Data

(2020)

In addition to data

being tracked in 2013

+ • Prognostics and

preventive

maintenance data

• Environment and

vehicle interaction

data (V2V/V2X data)

• Autonomous

vehicle-specific data

• Road and network

congestion data.

18.0–18.5

Million

25.5–26.0

Million

5.3 mio

32.6

mio


5.0 6.0 3.0

0.5 0.8

4.2

10.0 10.8

6.0

1.0 2.2

1.3

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

NA Europe China Brazil Russia Japan

Un

its (

Millio

n)

Embedded PND

20132014

PNDs expected to decline steeply in Western Europe and North America, while

Embedded navigation to gain prominence

47.5 Million

50.8 Million Growth Rate

+ 6.9%

PNDs 72.3%

Embedded 27.7%

Embedded 33.8%

PNDs 66.2%

Connected Car Market: Unit Shipment of Navigation Systems, Global, 2013 and 2014

Global Navigation Systems—Embedded and PND PND manufacturers shift focus to emerging markets like Russia and China while focus is to become a

system integrator in European and North American regions

Note: All figures are rounded. The base year is 2013. Source: Frost & Sullivan

2014


Top 5 Issues in Key Markets

Connected Infotainment

Cloud based telematics platforms

Smartphone based solutions

Efforts from non-native OEMs

Pay-per-use

models

LTE and 2G cut off

Digital advertisements in

vehicles

Regulations and Standards

Over the air updates

CRM and VRM

OBD II solutions and Vehicle

Data analytics

Vehicle Data and Analytics

Connected Services Integrator Model

Workload management HMI solutions

Regulations and Standards

OBD II solutions

Europe North America China

1

2

3

4

5


Tier 1

Content

Providers

Software

Vendors Technology

Providers

Tier 1

OEM

Past & Existing

Model (VM)

Tier 1 Software

Vendors Technology

Providers Tier 1

OEM

• Single point of dependency on tier 1

supplier

• OEM involvement only on specifications &

approval

• Slow to innovate on new features/new

business models

• Leaders like Ford look to innovate at multiple

points by bringing direct partnerships

• This model is expected to evolve as

infotainment/apps take front seat importance

• No business model clarity/ROI impact seen

yet from this model

OEM Ecosystem Partners and Dependencies Innovative suppliers are taking the role of a content provider

Content

Providers


PAYD Mileage

Based PHYD *MHYD

UBI Segmentation

Monitoring the

distances

driven

Monitoring driving

based on time,

distance and

where driven

Monitoring driving

characteristics –

acceleration,

speed and

braking

Monitoring driver

behavior and

driver

feedback/training

UBI Markets PAYD with feedback online is the current trend in UBI models for personal-line UBI programs,

while PHYD is the dominated model in the commercial vehicle market.

Subscribers Forecast

(million)

North

America Europe

2013 1.8 2.7

2020 19.9 24.8


UBI Stakeholder System Overview Slowly, all value chain participants are offering UBI solutions

Insurer Insured

Telematics Service

Provider (TSP)

GSM Communication

Operator

Map

Supplier

Hardware

Installer

Billing

Engine

Database

Management

Assistance

Operators

Hardware

Supplier

OEM Aggregators

Usage-based Insurance Market: Value Chain Mapping, Europe, 2013


Big Data Analytics in Automotive


Why Big Data? —The Business Case in Automotive Billion-dollar cost savings for OEMs and the new revenue generation opportunities across the

industry ecosystem

Digital leads

Warranty costs

reduction,

predictive

maintenance

User and dealer

satisfaction

Internet aggregators

Advanced mobility

services, dynamic

navigation, and

parking

Product performance

analysis, production,

and supply chain

• generate 60-70%

leads

• $2-3 billion

reduction to OEM


Where it Can Help—Big Data Features and Services A successful crowd-sourced product offering like Waze, which was acquired by Google for $1 billion (without

a revenue model), is a classic example of Big Data success. .

OEM

Product Planning

OEM

Warranty and

Aftersales/Dealers

Connected Services

Providers Fleet Related Services

OEM

Marketing

Component failure

prediction

Optimizing vehicle

performance

Apps and HMI usage

analytics

Feature demand by

regions

Demand sensing –

production

scheduling

Dynamic parts pricing

Predicting recall

scenarios

Proactive diagnostics

Feature packaging

(option/standard)

Tailored auto

financing

Used car valuation

Parts inventory

management

Service contracts

upselling

Targeted digital

marketing

Social media usage

analytics

Brand loyalty

analytics

Cross-brand

ownership analytics

Deals and rebates

Product feature

campaigning

EV related services

Crowd-sourced

traffic, parking, and

weather

Traffic management

Road infrastructure

and public transport

Multimodal journey

planning

Disaster management

Eco-driving and

driver training

Usage-based

insurance

Fleet optimization

Dynamic route

planning

Freight pricing

Driver behavior

analysis

Asset tracking

Prognostics

Forward-looking, innovative services Current services which will benefit from

Big Data


Big Data Connectivity Features and Services Big Data traffic service in Japan as more of a hotspot-type of service to help to guide traffic to

safe areas during disasters

Source: Frost & Sullivan

Services/Features

Existing–

Evolutionary

Future–

Revolutionary Example Activity

Component failure prediction X Volvo-Terradata

Prognostics – over-the-air X Tesla, GM

Predicting possible recall X Hyundai

Disaster management X Toyota, Japan

Crowd-sourced traffic, parking,

and weather X Inrix, USA

Eco-driving and driver training X Fiat EcoDrive

In-vehicle usage analytics X None

Focused conquest marketing X VW, Subaru

Prognostics X Volvo Trucks

Fleet productivity X Volvo Trucks

Traffic management X IBM+ City of Dublin

Road infrastructure planning X Boston, Speedbump App


Impact of Big Data and Connectivity Features The red-marked zone is ideal for any new companies targeting this space through features like traffic

management, working directly with city councils and fleet prognostics.

0

2

4

6

8

10

12

0 2 4 6 8 10 12Number of Companies Working in this Space (--- > More Competitive)

Reven

ue P

ote

nti

al

for

Lo

ng

Term

(B

illi

on

)

Traffic

Management

Fleet

Prognostics Component Failure

Prediction

Focused Conquest

Marketing

Parts Inventory

Management Apps and HMI

Usage Analytics

Used Car

Valuation

Optimizing

Vehicle Performance Brand Loyalty

Analytics

Driver

Training

Deals and

Rebates

Fleet

Productivity

Social Media

Usage Analytics

Public Transport Planning

Multimodal

Journey Planning

Automated

On-Demand

Taxi

Disaster

Management

Road Infra-

structure

Planning

EV-related

Services

social media

analytics

Crowd-sourced Traffic,

Parking, and Weather

Fuel Optimized

Navigation

Eco-Driving

and

Driver Training

Impact of Connectivity Features, North America and Europe, 2010–2015

High Revenue Potential with

less competitiveness Zone

Public & Commercial

Other


Market Opportunity:

• As dealerships are cutting down on head counts, with a success rate of only ~20% sale conversions

from customers walking into dealerships, Big Data presents opportunities for understanding the 80% lost

opportunity through customer analytics.

• Customer analytics and conquest advertising will help deliver insights about customer behaviors through

social media mining to understand the reasons behind low sale-conversion rates at dealerships, e.g.,

high vehicle costs, and vehicle features.

Digital

Retailing

Web Sites

(Product

information,

leads, sales)

Mobile Sites

(Product

information,

leads, sales)

Social Media

(Product

information,

customer

loyalty, leads)

Apps

(Product

information,

customer loyalty,

leads)

Digital

Display

(Kiosks, 3D,

holographic,

virtual)

Interactive

Media

(Gamification,

augmented

reality)

Digital Staff

(Tech experts,

product

“geniuses”)

Digital Tools

(Tablets,

touchscreen

configurators)

In-store Off-store

Off-store Data Expected to Generate about 60–70% of Digital Leads

Impact

• OEMs to invest in flagship stores

in major cities to boost brand

image.

• In-store, online, and mobile to

integrate, creating “omni-

channel” shopping experience

for new car buyers.

• Online leasing/finance will be

customized.

• Lifecycle of the product will be

personalized, including both

sales and aftersales.

Opportunity for Digital Retailing Experience from Big Data Make retailing omni-channel and to make marketing increasingly digital



Customer visits an

OEM/dealer Web site looking

for the new car launched or

to browse existing models

1

Works on multiple car

configurations

2 3

A QR code is generated

based on the configuration

4

QR code gets converted to a

virtual showroom in a car

dealership

Sales representative

receives customer

experience report and is

advised on the next steps

OEM manager receives data and

information from customers

around the globe; ability to plan

targeted marketing campaigns

and to offer feedback directly to

the product development teams

5 6

Image Source: IBM, Zerolight, JaguarLandrover.co.uk

Sample Case for Digital Retailing Experience Data mining provides the highest levels of information, visualization, and personalization to aid both research

(OEM and dealer) and the purchase decisions of customers.



Frost & Sullivan’s Explicit Savings from a Vehicle An annual savings of $700 to $800 per vehicle is expected with the use of Big Data.

OEMs

Service Provider

Vehicle User

Infrastructure & Society

Big Data Industry: Frost & Sullivan’s Explicit Savings from a Vehicle, North America and Europe, 2013

$350–

400

$100 –

150

$150–

200

$100–

150

From OEMs

Savings achieved from

• Reduction in warranty costs:

$30 to $50

• Reduction in product

development costs:

$250 to $300

• Reduction in recall-related

expenses: $20 to $50

• Increased aftersales revenues:

$50 to $100

From Infrastructure/Society


• Reduction in infrastructure

development cost: $20 to $50

• Smart parking and other public

use cases: $20 to $50

• Reduction in congestion using Big

Data: $50 to $100

From Vehicle Users


• Reduction in insurance

premiums after UBI:

$150 to $200

From Service Providers


• High quality of LBS

services: $100 to $150

Savings from

a vehicle

using big data

Note: All figures are rounded. The base year is 2013. Source: Frost & Sullivan


Data Analytics—The Context Data analytics will enable newer visualization techniques and create market opportunities including the rise of

integrated service providers which encompass consulting to implementation capabilities.

Several common threads of data exist across automotive streams that will set the foundation for untapped

business strategies and act as a self-evaluation tool for OEMs and associated ecosystem partners.

Vehicle

Manufacturer

Warranty

Claims as a

Percent of

OEM Revenue,

2013

Ford ~1.7–2.0%

GM *~2.2-2.5%

BMW ~1.1-1.2%

Honda ~0.7-1.0%

Toyota ~1.6-1.9%

Volkswagen ~3.4-3.5%

• Improvement on

businesses

o Prognostics

o Traffic/navigation

o Warranty/Recalls

o Intelligent transfer

systems (ITS) and

several others

o Digital retailing

• Data analytics allows

using data as feedback

for future development

plans.

Key Requirements

Data Sources

Sensors, OBD-II, CAN,

social media,

information from smart

environments

+ Facilitators

Connectivity, smart

infrastructure, third-

party ecosystem

partners (data analytic

companies and

scientists)

Potential revenue streams

Reduced warranty costs, diagnostic

and predictive analytics

Customer retention and

loyalty

Organized value-sharing among

ecosystems

Warranty claims represent a significant component of the OEM cost structures. Data analytics will create

the foundation of increased potential for the automotive industry to have a far-sighted approach to newer

customer needs and negate the existing challenges.

Industry Unmet Needs

1

2

3

4

Note: *indicates that GM will be spending more toward recall in 2014


Data Analytics—Current OEM Activities For 75% of connected services in the next 3 to 5 years, creating a positive effect and resulting in revenue

opportunities from pre- and after-sales experience.

Key

OEMs Current Industry Activity

Internal or External

Approach

Opportunity (Based on Data

Volume)

BMW Analytics for data mining, predictive quality, asset optimization, and

maintenance

Both Internal and

External

(example: IBM)

Medium to

High

General

Motors

In-sourcing data centers (from 23 outsourced centers to two); ability to

sell vehicle data to third parties; EV and UBI initiatives Mostly Internal

Medium to

High

Ford OpenXC data format for extracting CAN; opening up to app

developers, mining EV data, managing effects on power grid

Both Internal and

External

(example: IBM)

Medium to

High

Hyundai Predicting possible recalls and warranty Mostly Internal Medium

Nissan

(Japan)

Platform for third-party monetization of vehicle data, optimizing costs

across supply chain, monitoring price and quality at supplier level Mostly Internal Low to medium

Honda

(Japan) Pilot testing with Big Data to minimize congestion using apps Mostly Internal Low to medium

Toyota

(Japan)

Collecting Big Data traffic information and selling to third parties and

government agencies; optimization across manufacturing Mostly Internal Medium

Volvo Optimization across product design, manufacturing, quality assurance,

and warranty; prognostics in trucks

Both Internal and

External

(example: Teradata)

Medium

Vehicle Relationship Management Market: Current OEM Activities, Europe and North America, 2013



Big Data will bring about differentiation based on varied metrics, such as brand

awareness, digital engagement of customers, response time, and vehicle

configurability satisfaction.

By 2020, approximately 35 million vehicles in North America and Europe will

make relevant data sets available for OEMs to assimilate and convert them into

actionable insights.

Frost & Sullivan expects 60% of OEMs to establish their Big Data strategies and

offerings within the next 2 years. 1

2

3

Post-2015/2016, the industry will witness the foray of integrated service

providers with expertise in providing end-to-end services across the automotive

value chain, i.e., from consulting to implementation.

4


Summary (Big Data Analytics)


Thank you for your attention

Takashi MORIMOTO Automotive & Transportation [email protected]

mailto:[email protected]

mailto:[email protected]

connectivity and big data analytics in automotive · 2015-03-13 · • entertainment and media ......

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