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  • Connected cars – consumers look beyond transportation The next generation of connected cars brings the convenience of home and office on the road driving loyalty and revenue.

    the way we see itAutomotive

  • Beyond the car Cars were once used solely to travel from point A to point B. The very term “automobile” – a device capable of movement – sums up everything we required. That is no longer true. Paying bills, buying fuel, ordering food and organizing activities all need to be options when the driver slips behind the wheel.

    This change is being driven by the Internet of Things and by a culture that increasingly equates being disconnected with being lost. Consumers now expect their car to be an extension of their home or office space.

    With changing customer expectations, OEMs are investing in the development of connected cars. In recent times, the focus has been on voice recognition and personalized assistant apps for automated use. Noise reduction using technologies such as HaloSonic from Harman and fibre optic microphone technology from VocalZoom were also adopted by some OEMs. Others are looking for competitive advantage in exploring niche technologies such as gesture-based interfaces and handwriting recognition. Also in the mix are authentication, personalization and driver monitoring.

    Premium and value OEMs eg., Audi, BMW, Ford, GM, Mercedes-Benz, Toyota, VW

    Automotive Suppliers eg., Bosch, Continental, Delphi, Denso, Hella, Magna

    Digital Players eg., Apple, Google, Microsoft, NAVTEQ, Spotify, TomTom

    Telecom Players eg., Telefonica, Vodafone, AT&T, Verizon, Deutsche Telekom

    Automotive Insurers eg., Allstate, Progressive, StateFarm

    Players involved Customer Account Infrastructure

    CRM/Payment Software System Integration Hardware InfrastructureServices, content, and apps

    Services Streaming content Mobile Apps

    App Store OS/platform

    Software/car/user interface

    Components Car Design & manufacturing

    DB/cloud Mobile network Mobility infrastructure

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    (Historical) Core Business New Activities

    Figure 1 – OEM Start-up Initiatives

    Source: Capgemini

    Customers definitely expect more from automotive companies and dealers as digital disruption impacts every facet of our lives. The desire for connected car services is strongest in emerging markets and growing overall (41% of respondents say that they would like them in their next car).”

    Mathew Desmond, Automotive Practice Lead, Capgemini

    2 Connected cars – consumers look beyond transportation

  • Moving towards personalization Human-machine interface (HMI) software and smart mobility domains with voice recognition, artificial intelligence (AI) and over-the-air (OTA) technologies have all experienced significant innovation recently. Car manufacturers are already moving fast in this space. Last year, Ford, BMW and Volkswagen integrated Alexa, an intelligent personal assistant developed by Amazon. This caused a stir in the industry with its zero-licensing cost. More partnerships are expected in the near future. For example, Volvo is using Microsoft Suite in their vehicles.

    In fact, 12 out of 14 key OEMs have launched mobility service offerings either as a pilot or fully-fledged service and others, such as Ford, GM and BMW, are innovating in the space with seemingly little concern for the return on investment (ROI). Software-defined cars are leading the way to the next generation car-as-a-service model; this combines infotainment hardware and services as a subscription package. OEMs are looking at OTA as a potential revenue stream generator by offering business- to-consumer (B2C) solutions. With Delphi acquiring Movimento and Thundersoft acquiring Rightware, Tier 1 suppliers are already bolstering their software capabilities.

    Companies like Maluuba (part of Microsoft), iNAGO, Promptu, Sensory and Baidu are working on interesting areas such as natural speech assistants, AI-enabled speech assistants and voice biometrics. These are expected to gain traction in the near future as the technology evolves. (Figure 1)

    Moving towards autonomy The autonomous car is coming and it will change the car ownership model. Autonomous driving and contextually connected services are key areas of AI. Volvo, JLR, Ford and Mercedes-Benz are already active in these areas. The technology behind autonomous hand-over—the ability for the car and driver to safely transition control back and forth—has flooded the R&D pipeline of OEMs with biometric solutions built around voice, heart rate, facial, iris and fingerprint recognition.

    With the entry of technological giants such as Google and Apple into the connected and autonomous car segment, automobile manufacturers are forced to develop innovative capabilities and make cultural changes to compete with them (Figure 2).

    Thirteen OEMs are investing $7.1 billion USD to fuel the development of self-learning AI in cars. Toyota has planned to invest $1 billion USD in the next five years to develop the in-house capability for AI. One of the key motives is to accelerate the development of the fully autonomous car and personalized user experience. Voice recognition is moving out of traditional use cases such as infotainment and towards integrating vehicle users’ manuals into the system; these manuals can be accessed with the help of voice recognition. Similarly, Volkswagen’s introduction of gestures on the 2017 Golf shows it is an innovator in the mass market.

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    The driving mode- specific execution by a DAS of either steering or acceleration/ deceleration with the expectation that the human driver will perform all remaining aspects of the dynamic driving task

    One of the core functionalities of the vehicle’s operation is performed by the system while monitored by driver

    Adaptive cruise control Emergency braking

    Tesla Autopilot Traffic Jam Assist Lane keeping assist

    City/Highway pilot with minimal driver intervention—Audi Autopilot

    City + highway pilot, with minimal driver involvement Fully auto parking

    Fully autonomous vehicles

    Two (or more) core functionalities are performed by the system while monitored by the driver

    Under specific operating conditions, the system controls the vehicle; driver needs to intervene when requested

    System can bring vehicle to safety while in automated mode even if driver does not intervene when requested

    The driver is out of the loop; under all operating conditions, the system can control the vehicle appropriately

    The driving mode- specific execution by one or more DAS of both steering and accelera- tion/ deceleration with the expectation that the human driver will perform all the remaining aspects of the dynamic driving task

    The driving mode- specific performance by an automated driving system of all aspects of the dynamic driving task with the expectation that the human driver will respond appropriately to a request to intervene

    The driving mode- specific performance by an automated driving system of all aspects of the dynamic driving task, even if a human driver does not respond appropriately to a request to intervene

    The full-time performance by an automated driving system of all aspects of the dynamic driving task under all roadway and environmental conditions that can be managed by a human driver

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    2016 2018 2025 2030

    Figure 2 – Autonomous Driving Market: Definitions for Levels of Automation

    Source: Capgemini

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    the way we see itAutomotive

  • Moving towards safety Governments and regulations may help drive AI innovation in the name of safety. For example, the U.S. Department Of Transportation in association with the National Highway Traffic Safety Administration (NHTSA) announced plans for a regulatory proposal that would make it mandatory for auto manufacturers to install vehicle-to-vehicle communication devices in every automobile they produce in the near future. Driver-assistance technologies like parking assists may also be included as a part of mandatory safety features in vehicles.

    According to Capgemini’s Cars Online 2017, Beyond the Car study, six of the top 10 OEM start-up initiatives are related to safety and driving experience. Monitoring the performance and age of parts, for example, can redirect the driver to a dealer if immediate attention is required. This provides three benefits:

    1. A solution to a problem before it becomes more expensive to repair

    2. Avoids stranding the driver 3. Increases service and re-purchase loyalty

    Increased competition Automotive suppliers are trying to establish direct relationships with end customers to help reduce their dependence on OEMs. For example, Bosch’s fun2drive app allows customers to monitor their vehicle functions and provides direct connectivity to the nearest Bosch service center.

    Some digital players are trying to enter the market by adapting their smartphone platforms to automotive customer requirements. The objective is to expand the reach of the technology ecosystems into the vehicle and integrate their infotainment OS and software platforms into the car. Others in the media-streaming business, such as Pandora, Spotify and Deezer, ha

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