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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
3 2015 ICT Outlook Executive Briefing
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
4 2015 ICT Outlook Executive Briefing
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 2015 ICT Outlook Executive Briefing
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
6 2015 ICT Outlook Executive Briefing
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
8 2015 ICT Outlook Executive Briefing
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
10 2015 ICT Outlook Executive Briefing
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
11 2015 ICT Outlook Executive Briefing
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
12 2015 ICT Outlook Executive Briefing
Big Data Analytics in Automotive
13 2015 ICT Outlook Executive Briefing
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
14 2015 ICT Outlook Executive Briefing
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
15 2015 ICT Outlook Executive Briefing
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
17 2015 ICT Outlook Executive Briefing
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
18 2015 ICT Outlook Executive Briefing
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
Source: Frost & Sullivan
19 2015 ICT Outlook Executive Briefing
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.
Source: Frost & Sullivan
20 2015 ICT Outlook Executive Briefing
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
Savings achieved from
• 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
Savings achieved from
• Reduction in insurance
premiums after UBI:
$150 to $200
From Service Providers
Savings achieved from
• 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
24 2015 ICT Outlook Executive Briefing
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
25 2015 ICT Outlook Executive Briefing
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
Source: Frost & Sullivan
27 2015 ICT Outlook Executive Briefing
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
Source: Frost & Sullivan
Summary (Big Data Analytics)
28 2015 ICT Outlook Executive Briefing
Thank you for your attention
Takashi MORIMOTO Automotive & Transportation [email protected]