The trend towards autonomous vehicles – also known as self-driving cars – is a very popular topic in the media. However, there’s another transformation of the automotive industry that offers huge potential and is growing exponentially. The connected car market is growing at an annual growth rate of 45%. Three quarters of all cars shipped globally in 2020 will contain connection hardware.

 Accessing the car data can be as easy as plugging a transmitter device into the standardized vehicle diagnostics port (OBD II). According to Roland Berger, nearly 94 percent of all the cars in Germany already feature such a port.

Connected cars like these have internet access and are equipped with various sensors. These sensors send and receive signals about a car’s current condition, location and its surrounding environment, which offers many new business opportunities.

 

Explore some possibilities:

 

Fleet Management

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Connected cars allow any corporation to remotely monitor all aspects of their vehicles that are in operation. Vehicle speed, current location of the vehicle and route travelled, fuel usage, engine performance, load weight, and driver behavior. These are just some of the factors that IoT allows to be accessed and that can be optimized. The German market alone consists of 1.6 million company fleets, with a total of about 4 million vehicles, a huge potential for optimization.

 

Logistics optimization

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Existing route planning can be optimized by connecting cars into the company’s IoT ecosystems. Sensors deployed on site might measure stock and refill needs or call for a nearby maintenance need. Cars can be automatically rerouted to close-by customers to solve the issue given by the local sensor information. Big players in the market are expecting a potential value of 1.9 trillion dollars worldwide over the next decade, created through the optimization of logistics processes.

 

Insurance Models

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New business models based on actual and live car data enable insurers to create individual risk assessments and policies based on live driving behavior. A cellular connection device on the car’s diagnosis interface sends position and current speed to a CRM System, such as Salesforce.

Based on available speed limits (e.g. Google integration) and location the system is able to determine if the client is an aggressive or a passive driver and automatically sets the current risk level. New business models, such as automated billing based on the risk assessment are on the verge of implementation.  

 

Asset Monitoring

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Connected vehicles might actually serve as a hub, transferring the information of the transported assets into the IoT ecosystem. Connected IoT systems allow you to track supplies all the way down to the single package level. For vehicles that carry temperature-sensitive products, monitoring the location of the truck, the location of the driver, and the temperature of the product creates one asset in an ecosystem. If the temperature raises and the cargo gets endangered, shipment and driver can be located and notified immediately.

 

Predictive Maintenance

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Live car information enables your local garage or your service center to remotely analyze any occurring problems within your vehicle and assign you a slot for repair. This topic also offers a new business model for SME`s: An active customer relationship and condition-based maintenance on real data instead of yearly or semi-yearly checkups will improve the return rate and the overall customer satisfaction.

 

Conclusion:

Rather than awaiting the rise of autonomous cars and the radical change in transportation they will bring, connected vehicles offer a wide range of new business opportunities and possibilities right now. Any company should consider tapping the potential of using this easily available information to improve their internal processes and return on investment.