How connected car services will evolve from present offerings investigated by Eric Volkman.

When we park and leave our car, typically (and hopefully) not much happens to it. We return from our business to find the craft in the same state we left it. With the explosion in connected car services, though, we can come back to find groceries stuffed in the boot, a fuller petrol tank, or even a freshly cleaned vehicle.

The end of 2017 saw Hyundai announce the coming expansion of its Blue Link connected car system, which would offer services like on-site car washes. In collaboration with Silicon Valley-headquartered Smartcar, Hyundai will connect Blue Link with a variety of service providers. One early sign-up to this slate of offerings is Washos, an early stage company based in (where else?) Los Angeles that dispatches car washes and personnel to scrub a customer’s vehicle.

The Washos offering is the headline, attention-grabbing service provided by the Hyundai/Smartcar collaboration. Other planned and potential services include grocery and fuel delivery. All of these are convenient perks for connected Hyundai owners, who happen to subscribe to Blue Link, by the way, a $99 (£73) per year service. They’re the latest in a series of convenience offerings for recent-model vehicle owners from manufacturers looking to bolster their line-up of perks but are they having much impact on customers?

Mark Boyadjis, principal analyst and manager in the automotive user experience division of researcher IHS Market, doesn’t think so. It’s a problem of engagement and of utility. “Interest is likely low because, broadly speaking, awareness of these extras is low,” he said. “As connected services go, the most frequent services used are remote start, door unlock/lock, and destination send-to-car features. Remote fuel and diagnostics data is also relatively popular.”

To be fair, perks like mobile car wash and direct-to-car grocery delivery are relatively new to the market. More basic functionalities like the ones mentioned by Boyadjis have been included in connected car services for years now.

The lack of buzz and popularity might not be entirely the car owner’s fault, however. It seems that manufacturers aren’t necessarily in a mad rush to roll out these services. Volvo, for example, in late 2015 launched its In-Car Delivery offering, a collaboration between it and early-stage Swedish logistics company urb-it. In-Car Delivery allows Volvo owners to receive goods such as groceries, electronics, cosmetics, shoes, and even golf clubs straight to their vehicles.

Not long after that launch, Volvo said that the service would expand, along with the growth of partner urb-it, to cover more than 200 cities around the world by 2025. Just now, though, In-Car Delivery is available in Volvo’s headquarters city of Gothenburg, plus a handful of other European municipalities. This suggests that demand has not been high enough for the car maker and/or urb-it to set up shop elsewhere.

Of course, it’s possible the car manufacturers are playing a cautious waiting game here, rolling out only modest and light offerings without a great deal of fanfare, in a sort of advanced pilot programme. After all, if they introduce hot functionalities and services too fast, they could cannibalise sales of models that aren’t equipped with such goodies.

Dan Sturges, adjunct professor of transportation design at the College for Creative Studies and a noted authority on the present and future of the automobile, says that “it seems many automakers are hoping the coming disruption happens with enough time for them to adequately respond. For instance, while GM is talking about [alternative vehicle solutions], the reality is they have 18,000 dealers around the world, and many in the US today are trying to ‘lock’ consumers to a car or light truck loan for 72 months.”

Regardless, it seems the manufacturers and their partners will need to come up with more compelling functionalities to complement their car wash hook-ups and in-car shoe deliveries. Timo Moeller, head of the Centre for Future Mobility at consultancy McKinsey, believes that this will happen in the segment of connectivity. “All new cars will have some form of connectivity,” he says. “The degree of sophistication and ‘connectedness’ will further rise with the advent of fully autonomous cars.” His colleague Michele Bertoncello, a partner in McKinsey’s Milan office, added: “We expect more sophisticated versions of the use-cases to start getting rolled out in roughly 3-5 years’ time, beginning with luxury/premium segments in developed markets.”

IHS Markit’s Boyadjis also avers that the next wave of services will be at a much higher level of utility. Perhaps they will be more compelling for customers too. “I believe the ‘Connected Car 2.0’ will be the inter-connectivity of the connected vehicle eco-system with other connected IoT ecosystems, as in smart home, smart cities, etc,” he said. “I think the integration with the smart home is well on its way, as consumers continue to adopt complementary technologies for their homes.”

[Tele.Volkman.2017.12.19]

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