The NMA Foundation presents the Car of the Future weekly feature:
Automakers, tech companies and other entrepreneurs salivate at the prospect of the money they can make after a connected car in the future is sold, leased or shared. Automakers will inevitably insist that if someone purchases or leases a connected car or subscribes to a connected carsharing/ridesharing service, this consumer will likely have to sign an agreement that the company can collect data on you using their own (or partnered) proprietary software. This agreement would be similar to what we accept now under Terms and Conditions with our computer and smartphone software online. But this will be a bit different—this connected auto software will be able to figure out where you go and even perhaps why you go there.
The data on knowing where people go and what they are doing every day can be quite valuable. That data can be aggregated, sorted, then packaged and sold to anyone. Margins in this kind of venture can be as high as 90%. McKinsey forecasts that the car data gathering business could grow into a $450 to $750 billion market by 2030. Data is a gift that keeps on giving because you can sell the information to a variety of different customers again and again.
Recently, automakers have started calling themselves mobility companies or even service providers. Automakers certainly don’t want to cede any data business potential to software tech companies and other entrepreneurs. They want that business for themselves.
In an Autoblog.com editorial this week entitled: The Race for Autonomous Cars is over: Silicon Valley lost, the author writes that tech companies thought it would monopolize the technology and then dictate to automakers. But that is not happening. Making a car is a much more complex process than creating an algorithm. Already experts at making vehicles, automakers jumped at the chance to reap the potential benefits to the data aftermarket. That is why nearly every automaker has aligned with a ridesharing company and have either bought or partnered with other tech companies to remain competitive even if motorists might no longer buy a car in the future.
In a recent KPMG survey of a sample group of 1,000 high level car company employees, 76 percent of the respondents said that connected cars generate tenfold what the standard vehicle can produce in terms of available revenue streams. Seventy-one percent said the impact is so significant that measuring unit sales is an outdated measure. Eighty-three percent of the auto execs also stated that their companies will derive revenue from data shared by vehicle owners.
What does this mean for the consumer? Keeping information private will become more and more difficult as more things like cars are connected. Information from cars will be especially valuable to companies and if we want to drive or even ride in the future, we may have no choice but to give up our private data and of course, make nothing from it ourselves.
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If you are interested in learning more about the Car of the Future check out the following NMA resources:
NMA Driving News Feed—Over 50 Car of the Future stories are placed each month in the NMA Driving News—the go-to source for all your driving news information from around the country.
NMA’s Flipboard Magazine called Car of the Future—Over 50 stories are placed each month in this magazine devoted to the Car of the Future. Stories featured include future car politics, industry news and thought pieces.
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