Car buyers seek Wi- Fi with wheels
In- vehicle technology is the top selling point for 39 per cent of those looking to purchase: study
SOUTHFIELD, Mich. — When it came time to trade in her Ford Explorer in September, Svetlana Friedman had a condition: No more basic radio. She wanted a car that could connect to her smartphone, her iPad and her digital life.
“I’ll take it in black, white or red, whatever you’ve got, as long as it has all these features,” Friedman, 33, recalled telling her dealer.
“I didn’t want to go back to a base model where I can’t talk on my phone and listen to my music,” she said this week during a voice- activated, handsfree call from her black 2014 Explorer. “This definitely makes life easier.”
Forget horsepower. The connected car is becoming the hottest model on dealer lots. Invehicle technology is the top selling point for 39 per cent of car buyers — more than twice the 14 per cent who say their first consideration is traditional performance measures such as power and speed — according to a study by consulting firm Accenture released in December. That’s why cars that talk, show drivers the way and steer them from harm, will cover the floor of next week’s Detroit Auto Show.
“Consumers are increasingly looking for solutions that allow them to stay connected to their digital lives wherever they are,” said Thilo Koslowski, auto analyst for researcher Gartner Inc. “This will actually make cars the coolest mobile device going.”
Automakers at the show will be looking to push beyond what’s on the road today such as Tesla Motors Inc.’ s Model S, with a large tablet computer on its dashboard that runs a jumbo- sized version of Google Maps for navigation, and Ford Motor Co.’ s Sync system, which the company credits for attracting customers even as it’s been criticized for imperfections.
The number of cars connected to the Internet worldwide will grow more than sixfold to 152 million in 2020 from 23 million now, according to researcher IHS Automotive. GM, Volkswagen AG’s Audi luxury line and Tesla each revealed latest plans this week to offer Web connections in their cars, including Wi- Fi hot spots for tablets and laptops.
Racing to see which automaker can behave most like a tech company, Detroit executives have taken to bragging about apps and bandwidth, in addition to torque and towing ability.
The revenue and profit possibilities of the connected car go beyond the thousands of dollars automakers charge for these high- tech options, Koslowski said. By 2017, onequarter of all automakers will earn money from ecommerce transactions drivers make from the car, Koslowski forecast. Already, he said, 22 per cent of U. S. vehicle owners say they want to make in- car purchases of songs, audio books and movies for their passengers.
“The automakers can take a cut of these transactions because this is their device platform,” Koslowski said.
The intersection between the tech and auto companies could be a treacherous one for Detroit. If the tech companies define the terms of the connected car, automakers risk losing control of their own cockpits and the revenue that will flow from them, said Mark Wakefield, a director of the Detroit office of consultant AlixPartners.
“The worst- case scenario for the automakers is going to a generic interface where you plug your phone or iPad into the centre console,” Wakefield said. “They want to differentiate their cars. They’d rather not compete strictly as value appliances.”
By 2018, one in five cars on the road will be “self- aware” and able to discern and share information on their mechanical health, their global position and status of their surroundings, said Gartner’s Koslowski.
A system of sensors, vehicletovehicle communications and computing power will lead to intelligent cars that interact with their owners, he said.
“In the future, your car may actually tell you to stay in bed 30 minutes longer because the traffic situation isn’t as bad as it usually is,” Koslowski said. “Your car can talk to your alarm clock and reset it 30 minutes later so you can stay in bed without doing anything.”