Last year saw American car sales drop to 13.7 million, their lowest level in more than a decade. Today’s automakers are all too aware of the worldwide upheavals that threaten their tried-and-true growth plans. Leaders in the industry are struggling to increase sales and meet changing customer demands amid a backdrop of significant change and global disruptions.
Continued economic uncertainty is impacting car sales and car prices, with many customers wary about making new purchases due to concerns around pricing and scarcity. The situation has worsened as a result of declining used vehicle prices and higher interest rates. Supply chain issues—including a shortage of semiconductor chips—also persist. Overcoming these challenges requires a new approach to encourage customers to purchase new vehicles. Core to this will be focusing on building a better connected car experience.
The connected car experience
For many people, the concept of the connected car experience evokes self-driving technology, which hasn’t reached the level of maturity or widespread adoption that many technologists and industry experts predicted. However, the concept of the connected car extends beyond just self-driving capabilities to include a host of different features and capabilities. For example, we are seeing more adoption of technology like ADAS (advanced driver assistance systems). And there will be continued demand for integrations and mobile apps that can connect a vehicle to other tools people commonly use.
But there’s more than technology involved; it’s about the customer experience (CX) overall. CX methodologies and design thinking can help OEMs when it comes to fully comprehending their customers’ needs. All OEMs stress the significance of placing the customer’s needs first or in the middle of the ecosystem and homing in on the consumer experience. However, coming up with new software features without adhering to correct CX methodology and design thinking will almost always result in dead ends and missed chances. The conventional mentality has been focused on the product; OEM behaviour needs to change, using design thinking and CX best practices.
What is the optimal connected car experience?
Think about how smartphones have become essential to daily life. How can OEMs create a similar connection to cars? The connected car has the potential to become a part of consumers’ routine activities, so that a person’s interactions with the car are aligned with how they interact with everything else. Adding voice recognition is one part of it – but it’s about more than that.
Consider how to create an omnichannel experience. We’re already seeing this play out in the real world. Here’s one example: a driver is talking on their phone as they walk up to their car. They get into the car, and the phone recognises that they are in the car and picks up what they were doing —say, a phone call—and automatically transfers it to the car speakers. They can continue their call uninterrupted and drive to their next destination. This creates added functionality with minimal to no friction.
All of the information coming from the car’s performance can be used in a more meaningful way, such as through predictive analytics. What if a person’s vehicle could look at their online calendar and run predictive diagnostics based on an upcoming vacation in a snowy area and make proactive suggestions for maintenance? That may not be possible yet, but it’s not as far away as many people think. It’s just one example of how technological advancements can be used to really create that optimal connected experience.
Bringing it to fruition
How can car manufacturers make these things happen and maximise returns? There are a few different things that must be done, including taking a closer look at the change management process, implementing more collaboration, and moving toward rapid prototyping/fast-fail strategies.
OEMs need to embrace rapid prototyping and fast-fail strategies to try out new ideas
Change management: OEMs ought to put more of an emphasis on the organisational change management (OCM) required for transformational success. What often happens is that teams end up with numerous cycles of reorgs, which is paralysing and has a bad effect on the team members who are now expected to be software-centric. This is true even though applying OCM results in six times the adoption and success of the change you are seeking to implement. To ensure success, an organisation’s behaviour and leadership culture must develop over time. People need to embrace true organisational change management.
Collaborate and cooperate: A clearly defined partner strategy can go a long way in helping OEMs achieve connected car experience goals. Certainly, all OEMs have formed strategic alliances with major market players in the field of technology. In fact, some have already changed their partnerships two or three times. Yet these alliances will be at best shaky and are likely to perform poorly without a clearly defined partner strategy or a definition of partner value in the context of end-to-end transformation.
In addition to collaboration and cooperation, OEMs need to embrace rapid prototyping and fast-fail strategies to try out new ideas. The software-defined vehicle (SDV) paradigm, which many OEMs are starting to embrace, revolves around the ability to define a driver’s experience (of the car) primarily using software. When this is combined with the ability to update and modify the software using over the air (OTA) solutions, OEMs can then provide an optimal experience for their customers.
Moving toward the connected car
The automotive industry is at a turning point. Self-driving cars have yet to reach the point many predicted by now, and competition, as always, remains fierce. Yet mobile technology can go a long way toward helping customers enjoy a holistic user experience as cars and smartphones interact in new and/or enhanced ways to create “the connected car.” However, for auto makers to get this right, they’ll need to prioritize change management and a solid partner strategy. Now is a great time to lay a strong foundation for and gain competitive advantage from the experiences customers will soon come to expect.
About the author:Venkat Swaminathan is Director—Automotive and Manufacturing at DMI