These 3 megatrends are disrupting the automotive industry

Telenor Group is exploring new business models and concepts in the car business. They have recently announced the pilot of Telenor Connect, a new Internet of things (IoT) app enabling drivers to keep track of their car through an app. It gathers data about your car, and informs you when it is time to visit car service.

The timing for this is not a coincidence. IoT is said to be one of the biggest technology trends and business opportunities in the next years especially in the automotive industry. Forecasts indicate that by 2020 more than 250 million connected cars will be on the roads. Cars will be with some form of IoT device that will enable cars to be connected to their users and other cars.

Telenor`s goal in addition to the app is to create an eco-system around the Telenor Connect platform. Together with insurance companies and automotive industries they have created Nordic Car Connect Forum.

– Telenor can play a central role in moving IoT for cars beyond navigation by enabling a digital platform for new services within the connected car ecosystem. The mobile phone offers endless opportunities for our partners and the startup community, which can develop content for the app ecosystem,” says Sigve Brekke, President & CEO of Telenor Group.

Sustainability and Urbanization

Andrea Sroczynski is automotive and transportation expert in the strategic business development in Telenor Connexion.She describes three megatrends which have an impact on the automotive industry – sustainability, urbanization and digitalization.

– Sustainability is one of the key trends in many industries, also in the automotive. The main enabler for more sustainable cars is electrification, and we will see many more electric cars on the roads, says Sroczynski.

The second trend – urbanization and more people moving to the big cities.

– Urbanization means less space, that means for example many issues with parking. Statistics show that w spend 70 million hours searching for parking spaces. It is equal to annual number working hours of employment for 40.000 people.

Connecting through AI, IoT and etc

The last trend that is already disrupting the auto industry is digitalization or in other words connectivity. IoT, artificial intelligence and other digital technologies can help to increase the appeal of cars, build customer loyalty and create new revenue streams.

– Emergency systems in cars will save more than 11.000 lives. This is equal to 12 years with no traffic accidents in Los Angeles. Just consider how much impact digitalized Connecting Car solutions will have in the future.

The industry leaders are becoming more aware of that for each year. The annual KPMG International Global Automotive Executive Survey (GAES) asked 800 auto executives from 38 countries about this trend. 80 percent said that this trend will be disruptive for their business in the future, many more compared to last year survey.

Many of the companies already act upon that. Just in 2016 Ford employees have submitted all time high number of patent applications – 8.000 new inventions. It happened for the first time in the company’s 113-year history and is 90 percent increase since 2014 in number of patents. Users can look forward to inventions like equipping autonomous vehicles with drones and etc.

The same goes for Apple according to this article at BBC. For the first time in December 2016 they have acknowledged to invest in self-driving car tech. They have expressed excitement over the potential and benefits with automated systems and transportation. They even have registered domains and for later launch of new projects.

What are the challenges with connected cars?

Sroczynski adds that vehicle manufacturers may face many challenges based on these three main trends, especially when it comes to connectivity.

– Of course, there are concerns around data privacy and cybersecurity. No matter how advanced solutions you offer your customers, people need to trust you, says Sroczynski.

The European Union Agency for Network and Information Security (ENISA) has just published a report identifying good practices for connected car cybersecurity. One of their recommendations is to improve information sharing amongst industry actors and enhance trust within the ecosystem.

According to the report information sharing is essential, and can help industry actors to “find countermeasures, challenge the relevance of their security mechanisms and support the detection and mediation of security issues.” This way stakeholders can discuss new attack methods they experience and this will help the whole community to find countermeasures.

Other recommendations in the report are to clarify cyber security liability among industry actors and create a consensus on technical standards for good practices.

Ways to foster innovation

During Nordic Car Connect Forum this February were discussions on how to create more innovation in the eco-system for connected cars. For example more collaboration with startup communities, especially maker spaces. This picture shows different alternatives for collaboration.

Ford has recently opened maker space in Nanjing, China. The workshop gives employees a space to collaborate and brainstorm ideas, develop prototypes using 3D printers, 3D scanners, plastic-forming machines, electronics, app development software and more.

We will see more of this type of collaboration in the nearest future.