The digital revolution is transforming the entire automobile industry, creating exceptional business opportunities and real benefits for customers. Since the data generated by cars could create an additional market of 450-750 billion by 2030, the question arises spontaneously: how the operators of the automotive ecosystem, which is evolving, can transform this Huge amount of data in products and services that generate value? In this interview, created at the event Auto @ Google, Michele Bahukhandi, Partner at McKinsey & Company, talks about opportunities for players in the automotive sector.
The automotive and mobility sectors are experiencing a real revolution, perhaps the largest in history. Cars continually generate data about how they are used, where they are and who they’re driving. With the increasing proliferation of shared mobility services and the progress made in the electrification of engines, autonomy and connectivity of cars, the amount of data from vehicles will increase exponentially, with Repercussions on how cars are designed, produced and sold.
“The opportunities are huge. According to a McKinsey research, the additional market generated by the monetization of data could reach the world-wide 450-750 billion by 2030. This market will be based primarily on the use of big data and advanced analytics, in order to offer new functions and new services to motorists, reduce investment and operating costs, as well as improve the safety of drivers and passengers “, says Bahukhandi.
In order to take advantage of these opportunities, players in the industry must be prepared to face four major challenges. The first is to create an effective customer value proposition, communicating in a clear way “what are the benefits for customers “. The willingness to share data in exchange for concrete benefits is the central element of the value-creation process, since the benefits for consumers are numerous and could be encompassed in four areas: security, comfort, savings Time and cost reduction. The second challenge concerns the definition of use cases and business models related to the use of data and aimed at generating value for the end customers and the players in the sector. The third, which is crucial to better understand the opportunities for the use of data, is to leverage technologies and regulations. Finally, it is necessary to implement appropriate templates and organizational tools to monetize car data through the development of specific skills: This result is attainable both internally – by hiring, training and retaining professionals in Scope data analytics, software programming and digital services – both externally, starting partnerships with large high-tech companies and digital operators.
In this sense, technological giants such as Google play a key role in facilitating and accelerating the progressive digitalization of cars, contributing also – thanks to direct contact with end customers through their platforms To establish a relationship with them, which the traditional companies in the automobile industry have always had a hard time building.
“Technological giants such as Google play a key role in facilitating and accelerating the progressive digitalization of cars.”
“Monetization of car data will push current players in the industry to quickly and pragmatically change their approach: Many have only recently started to develop services and products that generate value from this huge amount of data. But it will be the ability to adapt and transform business models to really make a difference. In this sense, collaboration with large technology companies could significantly speed up this process,” concludes Bahukhandi.