Summary

1. With connected cars becoming more popular in the context of new car sales, it is becoming more important every day for automakers to discuss the profitability of their connected services. This is because not only do connected services play a decisive role in product competitiveness, but by virtue of offering broad and constant connectivity to various things, they also represent a trove of business possibilities and the potential to create new value not confined to the traditional activities of the industry.
2. Making connected services more profitable will require automakers to expand sales of their services. For services aimed at core end users, the key will be to develop services that deftly balance improving per-customer spending and maintaining/enhancing customer retention rates. In addition, in recent years we have begun to see more businesses being launched and expanded for services that are aimed at corporate customers involving the use of data as a new domain.
3. Meanwhile, the question of how to rapidly develop and launch new services while also reducing invested resources and costs is another crucial point of debate. Alliances intended to accelerate software and service development, prompted by the entry of IT giants into this field, are becoming increasingly important considerations. Further, it will become more essential for automakers to form new inter-company partnerships or transcend their internal boundaries involving particular brands, regions, or businesses and to adopt a common service infrastructure, and thereby reduce their costs.
4. We expect there are more than a few cases in which internal company frameworks are not enough to implement solutions to every challenge. In addition to having specialized organizations and securing talented personnel to demonstrate leadership in the connected field, companies must also keep a watchful eye on their KPI and internal structures that make it possible to hold smooth discussions with business partners and relevant departments. When it comes to improving the profitability of connected services, it will be essential to make integrated efforts toward finding solutions to challenges and creating frameworks for implementing them.

Contents

1. CONNECTED CAR SERVICES ARE SEEING WIDER USE
2. POINTS OF DISCUSSION REGARDING EXPANDING SALES OF CONNECTED SERVICES
3. POINTS OF DISCUSSION REGARDING ACCELERATION OF SERVICE LAUNCHES/COST CUTTING
4. APPROACHES TO MAKING CONNECTED SERVICES PROFITABLE

• Tomoki Hamano

  Senior Consultant

  Global Manufacturing Industry Consulting Department

• Hiromi Hayashihara

  Consultant

  Global Manufacturing Industry Consulting Department

• Eriko Mori

  Consultant

  Global Manufacturing Industry Consulting Department