Next-Gen Business Models for the Automotive Industry for Connected Cars and Services 2018-01-0045

As mobile data traffic expands 10-fold from 30 Exabytes in 2014 to 292 Exabytes in 2019, and the total mobile service subscriptions reaches 6.8 billion, in a global population of 7.3 billion, there is a compelling move towards connected cars and services. Though SDB research suggests US$ 18 billion additional revenue from these services, but most important question is “Are the consumers, who buy cars, willing to pay extra for these services”. Traditional business models of OEMs who buy parts from Tier-1 suppliers, and sell the vehicles to consumers as a one-time sales revenue per consumer, have to learn a lot for new successful business models. Telematics services, introduced in early 2000, bears testimony.

For the New Business Models, the OEMs have to work with the ecosystem of service providers, who themselves have different a business model of operations. They do not believe in charging everything to the consumers. Even their accounts (revenue generators) and suppliers are different. The Digital Technology Ecosystem includes mobile equipment players (like Samsung), telecom service providers (like Vodafone), telecom network providers (like CISCO), Internet OS provider (like Microsoft), Search engine and app platform providers (like Google), cloud providers (like Amazon) and a combination of such providers (like Apple). To be successful in this digital age, the Automotive OEMs have to look at cars generating valuable data, and devise Business Models for monetizing this data, keeping the confidentiality compliance into consideration.

This paper looks at these alternative Business Models available with the Automotive OEMs and Tier-1 suppliers, in partnership with the Digital Technology Ecosystem service providers. A mathematical approach to business models, with the parameters, constraints and options, has been presented, which can be adopted by the Automotive Industry.