strategic analysis of the impact of big data on the european and north american automotive industry
TRANSCRIPT
Frost & Sullivan: Big Data’s Predictive
Functions to Help Identify and Deliver
Opportunities in the Automotive Industry
Research PREVIEW for the
Strategic Analysis of the Impact of Big Data on the European
and North American Automotive Industry
@FS_Automotive
Big Data will bring about differentiation based on varied metrics, such as brand awareness, digital
engagement of customers, response time, and vehicle configurability satisfaction.
By 2020, approximately 35 million vehicles in North America and Europe will make relevant data sets
available for OEMs to assimilate and convert them into actionable insights.
Frost & Sullivan expects 60% of OEMs to establish their Big Data strategies and offerings within the
next 2 years.1
2
3
Post-2015/2016, the industry will witness the foray of integrated service providers with expertise in
providing end-to-end services across the automotive value chain, i.e., from consulting to
implementation. 4
Key Findings, North America and Europe, 2013–2020
Source: Frost & Sullivan
Summary of FindingsThe shift toward Big Data strategies is taking place because of the need to reduce spiraling warranty costs and to create a data sharing network between the dealer, customer, and OEMs.
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Global Data Traffic and Big Data Market Revenue PotentialDigital content is doubling every 18 months – most of the data in the world today has been created in the last two years alone
Source: Frost & Sullivan analysis
Global Data Traffic in Zettabytes, 2010-2025 Global Big Data Market in $ Billion, 2010-2025
2010 2020
2025
2015
$3.56
$87.85
$122.6
$47.37
2010 2020
2025
2015
1.2
34.1
100.2
7.6
Global Data Traffic and Big Data Market Revenue Potential, Global, 2010 - 2025
20252025
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Connected Cars Accelerating Big Data Opportunities ~35 Million vehicles in 2020 will make available relevant data sets for OEM’s to assimilate and convert them into actionable insights
Note: All figures are rounded. The base year is 2013. Source: Frost & Sullivan analysis.
Connected and Non-Connected Cars, North America and Europe, 2013 and 2020
As of 2013 Frost & Sullivan expects less than 2 per cent of vehicle data to be useful for monetization
Meaningful data sets is expected to grow from 10MB to 5GB in an average connected car by 2017/2018.
2020
~34.0–34.5
million
2013
~8.5–9.0
million
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Why Big Data in the Car Industry – The Business Case Key driver for implementing a three pronged big data (internal, external and connected) strategy is the billion dollar cost savings it can provide OEMs/year, and new revenue generation opportunities it can generate across the industry eco system
Digital Leads
Warranty Costs
Reduction, Predictive
Maintenance
User & Dealer
Satisfaction
Internet Aggregators
Advanced Mobility
services, Dynamic
Navigation and Parking
Product Performance
Analysis, Production and
Supply Chain
Images and logos are only for representation Source: Frost & Sullivan analysis.
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Impact of Big Data on Vehicle PricingTransaction pricing to become transparent as internet aggregators enter the market, vehicle pricing transparencies is expected to disrupt dynamics of the industry
Foray of internet aggregators could lead to OEM/Dealer’s losing control over the potential flow of information which plays a crucial role during the consideration and purchase decision of customers.
Transparent Pricing
on New CarsPricing Analysis made
available by
country, state, city or even
local dealership
Digital Profiles of
Used Cars
Electronic tagging of used
cars, creating history and
profiling
Profiles are segmented by leveraging several data points to
obtain a deeper understanding of the customer.
Disruptive Influence that Big Data can have
Big Data Helping Create New Services
Highest and lowest price of a car for the same specification
will be brought down by at least 5 to 10 percent.
Mystery Shopping Jobs of Pricing Analysts Influencing Customer Decisions
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Key Societal, Technology and other Challenges for Big Data Implementation Harnessing relevant and prioritized vehicle and user data are key answers to industry challenges
Understanding the
customer from the
web (car vs. lifestyle
preferences)
– Customer Analytics
and CRM
The need for better data
quality
– High data transfer cost per
vehicle for downloading
information
Whose benefitting from
the ecosystem
– Monetizing data and
sharing value amongst
ecosystem partners
Big Data: Relevant &
prioritized information
– What data you process
and what data you don’t
Shortage of skill set
for data analytics and
data governance
– Data Scientists
Data privacy issues on
the type of data being
shared
– Government limitations
and driver concerns
Images and logos are only for representation Source: Frost & Sullivan analysis.
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OEM
Product Planning
OEM
Warranty and
Aftersales/Dealers
Connected Services
ProvidersFleet Related Services
OEM
Marketing
Component failure
prediction
Optimizing vehicle
performance
Apps and HMI usage
analytics
Feature demand by
regions
Demand sensing –
production
scheduling
Dynamic parts pricing
Predicting recall
scenarios
Proactive diagnostics
Feature packaging
(option/standard)
Tailored auto
financing
Used car valuation
Parts inventory
management
Service contracts
upselling
Targeted digital
marketing
Social media usage
analytics
Brand loyalty
analytics
Cross-brand
ownership analytics
Deals and rebates
Product feature
campaigning
EV related services
Crowd-sourced
traffic, parking, and
weather
Traffic management
Road infrastructure
and public transport
Multimodal journey
planning
Disaster management
Eco-driving and
driver training
Usage-based
insurance
Fleet optimization
Dynamic route
planning
Freight pricing
Driver behavior
analysis
Asset tracking
Prognostics
Forward-looking, innovative servicesCurrent services which will benefit from
Big Data
Where it Can Help—Big Data Features and Services A successful crowd-sourced product offering like Waze, which was acquired by Google for $1 billion (without a revenue model), is a classic example of Big Data success.
Source: Frost & Sullivan
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Big Data Explicit Savings from a VehicleFrost & Sullivan expects an annual savings of ~$700—800 per from leveraging Big Data
Details of the Full Analysis
Section Slide Numbers
Executive Summary 4
Research Scope, Objectives, Background, and Methodology 11
An Overview of Big Data Basics—North America and Europe 17
Big Data for the Automotive Industry 24
Automotive Big Data Market Analysis 32
Key Opportunities in the Auto World Using Big Data and Related Case Studies 37
Additional Big Data Success Case Studies 49
Key Conclusions and Future Outlook 55
Appendix 59
The Hot Topics Covered and Upcoming 65
List of Studies—Past, In-progress, and Planned for 2014 67
The Full Analysis Features the Following Content
Interested in Full Access? Connect With Us
Jeannette GarciaCorporate Communications- North America
(+1) 210.477.8427
Research Authors
Niranjan ManoharProgram Manager
Automotive & Transportationhttp://www.frost.com/reg/people-finder-
result.do?id=10554@FS_Automotive
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Katja FeickCorporate Communications- Europe
(+1) 210.477.8427
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