TelefónicaConnected Car Report 2014

Telefónica

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Connected Car Report 2014

Telefonica DigitalTelefónica

Telefónica published the ‘Connected Car Industry 2014′ report, featuring global research and contributions from seven of the world’s largest car manufacturers in July 2014.

The report provides insights into the connected car market, challenges and research into consumer awareness and demand for connected car products and services.

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Connected Car Report 2014

Telefonica DigitalTelefónica

For the Connected Car Report 2014, Telefónica commissioned globally recognised research firm, YouGov to survey 5,012 adults, aged 18 or over, and that held a valid driver’s licence. It spoke to respondents in Spain, Brazil, USA, UK and Germany in January 2014.

The respondents were asked what they think about - and what they want from - connected cars. The research has revealed some fascinating insights on levels of demand for connected cars, and what connected services drivers value the most.

Industry experts from Kia, GM, Renault, Fiat, Volkswagen, Nissan, Ford and Telefonica were also interviewed, offering feedback on the industry and the research results.

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Six key findings of the report

Alternative services such as car sharing are gaining momentum, 35% believe they will not own a car in 2034.

73% of respondents say safety and diagnostics features are the most important connected features

80% of interviewees expect the Connected Car of the future to have all the technology we are used to everywhere else in our lives

Almost three quarters of people are interested in or already using Connected Car services

Drivers prefer to pay for the basic connected services then choose additional services as needed

60% of respondents prefer to access connected services via the dashboard

Telefónica

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23%

34%

Global demand for the connected car

I already use connected car services

My next car will have connected services

I have heard of connected car services,and will consider them for my next car

I have heard of connected car services,but am not interested in having them

I have not previously heard of connected carservices, but am interested in having them

I have not previously heard of connected car services, and am not interested in having them

Don't know

0% 5% 10%15%20%25%30%

Much has been talked about the future of connectivity in cars. Our consumer research showed that there is substantial global demand for connected car services, with 71% of drivers interested in using or are already using connected car services.

Telefónica

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3%

46%

28%

2%

23%

34%

14%

The user experience

80% of interviewees expect the connectedcar of the future to provide the sameconnected experience they are usedto at home, at work and on the move

via their mobile phone.

Consumers today expect connectivity as a given wherever they are, and the car is no

exception. However, the automotiveenvironment is unique and provides

new challenges for connected services.

Strongly agree Agree Neither agree nor disagree

Disagree Don’t know

How much do you agree or disagree with this statement: Cars of the not-too-distant future will have all the technology that we are used to everywhere else in our lives

Telefónica

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The Connected Car services that consumers want today

Telefonica DigitalTelefónica

73%

73%

61%

54%

Series1

3%

26%

6%

31%

73%

62%

17%9%

73%

OtherW

eather info

Social media

Usage-based insurance

Smarter navigation

Early warning system

In-car wireless connectivity

More entertainment options

Increased safety

Across all the markets we surveyed, there was clear consensus about the three features most in demand: increased safety, early warning systems (vehicle diagnostics) and smarter navigation.

Almost three-quarters (73%) of respondents chose safety and diagnostics features as the most important, giving a clear indication of the areas they would expect connected services to focus in the future.

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To own or not to own

8%

23% 28%

7%

30%

Our survey found that on average,35% of consumers expected not

to own their own car by 2034, andinstead predicted they would be usingalternative options such as car sharing

services.

A report from NavigantResearch predicted global

membership of car sharing schemeswill rocket from 2.3 million in 2013 to

more than 12 million by 2020.

Strongly agree Agree Neither agree nor disagree

Disagree Strongly disagree

How much do you agree or disagree with each of the following statements? – In 2034, many people will not own a car but will use car sharing services instead

Telefónica

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80%

7%8% 6%

How consumers want to access different services

Telefonica DigitalTelefónica

73%

54%

Assuming you had a connected car, how would you prefer to access each of the services below?

Safety technology

Car Dashboard Tablet/smartphone dock Dedicated device Don’t know

Vehicle diagnostics

69%

8%

15%

7%

40%

28%

17%

15%

70%12%

12%6%

Navigation

Infotainment

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Preferred payment models

Telefonica DigitalTelefónica

73%

73%

61%

54%

The survey suggests that OEMs stillhave some way to go before theybreak out of their traditional role asa manufacturer and become a full,connected service provider. It alsohighlights the varying preferred payment methods for connected services.

The most popular payment method was for basic connectivity with the option to choose additional services as needed. PAYG and one-off payments were also popular which suggests manufacturers will need to give customers several payment options.

Pay a

s you

go

One-o

ff pay

men

t

Basic

serv

ices w

ith a

dd-o

ns

Bundl

ed w

ith m

obile

cont

ract

Separ

ate

subs

crip

tion

(unb

undl

ed)

None

of th

ese

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Global payment preferences

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What do the experts have to say?

Telefonica DigitalTelefónica

Coming soon…

“Consumers are aware of connected cars and it is now becoming a key communication point for Nissan to reinforce the ‘Innovation that excites’

branding.” Ian Digman, Nissan

“We’re beginning to see our customers prepared to pay for some connected services via a yearly subscription, such as navigation in particular. However, there is also a growing demand for pay-as-you-go services…” Nicolas Nollet,

Renault

“I believe that car sharing is an opportunity, especially within the growing trend for mega cities. In these enormous urban centres one will always need a car

and will always need services.” Massimo Cavazzini, Fiat

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What do the experts have to say?

Telefonica DigitalTelefónica

Coming soon…

“When customers are connected and cars are connected you have a much greater ability to create services because you'll be able to interact with the car

remotely to locate it, unlock it, or arrange to share it with somebody else.” Greg Ross, GM

“The big use case right now that we’re exploring is the value proposition around remote control. Remote start, door lock/unlock, windows down…

anything that controls the car in some fashion from a remote device.” John Ellis, Ford

“the fact is that connectivity is no longer optional, it is part of every OEM’s DNA from now on.” Henry Bzeih, Kia Motors

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What do the experts have to say?

Telefonica DigitalTelefónica

“I think if we knew the answer to what to do with the data generated by connected services, it would be the million-dollar question. The first thing that

needs to happen is for auto makers to start realising what they can do with that data, what the value is, what they can do legally, and what the consumer is

okay with too.” Ben Auslander, VW

“I am confident that, by 2020, we will have a high penetration of connected cars (~90%). This will be a mixture of 2G, 3G, and in most instances 4G.”

Pavan Mathew, Telefónica

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What is Telefónica doing?

Telefonica DigitalTelefónica

 For us the connected car is no longer just a concept, but a reality. We have the platforms, the partnerships, and the industry insight to help car manufacturers seize the opportunity.

We have taken the lead in forming a global M2M alliance which to date comprises of eight leading mobile operators around the globe. This alliance was formed to help bring M2M technology to market.

We are at the forefront of developments in services like fleet management, partnering with the likes of Sascar to develop fleet management solutions for light vehicles in Brazil.

Earlier this year Telefónica was selected by Telsa to provide connectivity to its award winning Model S across multiple countries in Europe, including Germany and the UK.

Telefónica has invested in the insurance telematics market, launching a pioneering motor insurance policy with European insurance company Generali Seguros, which calculates the premium according to driving habits.

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