connected car solutions: one of the major business drivers for the automotive industry in the future

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Connected Car in Europe

2015

Strategies and technologies for connected driving

Executive Summary

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Sponsors

2015 Connected Car in Europe 2

The creation and distribution of this study was supported by: BearingPoint, Cognizant Technology Solutions, IAV GmbH, T-Systems International GmbH and Wipro Technologies

Premium sponsors:

Gold sponsors:

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Introduction

With the connected car topic the automotive industry is about to experience a technological leap that will substantially change mobility. Automotive manufacturers are increasingly considering the integration of information technology and external services in their cars.

Under connected car technologies we understand all (hardware & software) technologies within a vehicle that enable (one- or two-way) communication between the vehicle and a third party (e.g. driver, environment, other vehicles) as well as all infrastructure and back-end technologies that are required in order to complete a connected car business case.

Under connected car services we understand all information- and communication-related services that are offered (to a driver or a vehicle) from outside the vehicle by original equipment manufacturers (OEMs) or third-party service providers.

This study explores the strategies of the automotive industry to develop and launch connected car technologies and services.

The projects include topics such as cloud computing, big data, vehicle connectivity, Internet of Things, or autonomous driving. Leading car manufacturers as well as software and hardware suppliers have put their heads together to push and ensure a successful service value chain for connected car scenarios.


Against this background PAC conducted a survey among 250 CxOs in European automotive companies (France, Germany, Italy, the Netherlands, Spain, Sweden and the UK) with more than 50 employees.

The study deals with the following questions:

●  What is the status quo in terms of the development of connected car services and which areas are in the focus?

●  Which trends and changes are important for (future) connected car offerings?

●  What are the (main) challenges that automotive companies are facing in general and in terms of connected car offerings?

●  What role do politics and standardization play regarding connected car offerings?

●  What are the strategies and objectives that automotive companies pursue?

●  How important are external services and the cooperation with different players?

●  What are upcoming investment plans and who are the decision makers?

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Executive summary I

The study shows that there are currently two ‘waves’ of connected car offerings on the European automotive market: There is one group of early adopters that have already brought their offerings to the market or are currently busy rolling out their solutions and services. This group represents around 35% of all participants. And there is a ‘second wave’ of companies (55%) whose connected car offerings are currently in the design and development phase.

This shows that the topic has already reached a serious level of maturity and is on its way to become one of the driving forces for the automotive industry.

Solutions and offerings that are currently available on the market are basically concentrating on connectivity within the vehicle. In the medium term, the ‘second wave’ will bring more solutions around “car-to-x connectivity” onto the market.


Connected car solutions will become a driving force for the automotive industry!

2

14

30

11

8

22

13

No connected car offerings yet

Early phase of research & development activities

Design and implementation

Final testing

Integration into products

Rollout

Operation

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0 10 20 30 40

Shares in percentage of all companies, n = 250(Single choice)

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At which stage of the value chain is your companycurrently active in terms of connected car offerings?

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Executive summary II


Standardization is key for successful connected car solutions!

European automotive companies confirm that for successful connected car solutions industry-wide standards for technologies, software development and service provision need to be applied and accepted.

However, opinions on how to do this and which standards to apply are quite diverse. While on the supplier side standardization helps to make collaboration processes with partners more efficient and reduces dependencies on individual manufacturers, standardization for manufacturers always includes a risk in terms of market positioning and opportunity generation. Therefore manufacturers rather try to establish their own technology or process as standard than to adapt to a competing one, as long as the application of a standard does not imply any other benefits for them.

Another interesting outcome of the survey is the conclusion that more and more companies are now going to focus on the business aspects of connected car offerings (including pricing models and user experience), while activities so far had often been focused on the technological realization alone.

45

50

49

47

51

53

47

37

38

36

35

34

31

29

26

9

Lack of standards across manufacturers and suppliers

New competitors entering the market

Integration of different technologies and service

provider eco−systems Management of internal

change at manufacturers

Ensuring vehicle safety and security requirements

Enabling connected car services across vehicles at multiple

different life cycle stages Customer perception of

new service provision

Availability of connectivity infrastructure

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0 20 40 60 80 100

Shares in percentage of all companies, n = 250(’No challenge’ not shown)

Major challengeMinor challenge

How do you rate thechallenges for your company?

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Executive summary III


Connected car solutions are joint product developments with partners!

Connected car represents a long-term strategic topic and will not disappear from the companies’ portfolios anymore. 80% of the large enterprises and even 95% of all vehicle manufacturers confirm this statement.

In general, most European automotive companies feel well prepared in terms of in-house competencies. However, they are also aware that they are not able to implement these solutions and services exclusively on their own. Consequently, automotive manufacturers and suppliers consider product development as a joint project with external service providers. Companies are especially asking for external support in terms of testing, software development and the development of new security functionalities as well as infrastructure.

The first contact for automotive companies is often a business partner among the group of consulting & IT service providers. Also automotive companies maintain tight relationships and collaboration partnerships with electronic device manufacturers, such as Google, Samsung or Apple.

71

61

50

64

47

49

35

25

12

24

29

37

21

24

20

8

13

6

Software development

Security

Testing

Infrastructure

Systems integration

Training

Analytics

Cloud

Consulting

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0 20 40 60 80 100

Shares in percentage of all companies thatconsider joint product development with

external service providers, n = 173(’Less/no demand’ not shown)

Very strong demandStrong demand

In which area do you seedemand for external support?

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Executive summary IV


There are still many investment obstacles for connected car solutions!

The current investment focus is basically on security technologies, infotainment as well as in-car connectivity. In order to trigger such investments, corporate management still acts as major driving force for many companies. Given the strong share of medium-sized and owner-driven companies in this sector, this is not a surprising result. In large enterprises investments are more often driven by business units while corporate management as well as IT rather take the roles of budget owner.

Besides investments plans, there are still major obstacles for many manufacturers and suppliers. Basically, this is because for many small and medium-sized companies, connected car is not the only topic they are currently working on, but one among many others, such as e-mobility, lightweight bodywork or reusable and flexible chassis. This means the topic is important but there are also many other topics competing for budgets.

64

50

28

27

23

19

18

Connected car is not a focus topic.

Unclear costs of change

Security challenges

Political resistance

Unclear customer expectations

Difficult technology selection process

High operational costs

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0 20 40 60 80

Shares in percentage of all companies, n = 250(’No’ not shown)

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Wich issues are obstacles to your companyinvesting more in connected car offerings?

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Premium Sponsors – Profiles

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Company profile BearingPoint

BearingPoint consultants understand that the world of business changes constantly and that the resulting complexities

demand intelligent and adaptive solutions. Our clients, whether in commercial or financial industries or in government,

experience real results when they work with us. We combine industry, operational and technology skills with relevant

proprietary and other assets in order to tailor solutions for each client’s individual challenges. This adaptive approach is

at the heart of our culture and has led to long-standing relationships with many of the world’s leading companies and

organizations. Our 3350 people, together with our global consulting network serve clients in more than 70 countries and

engage with them for measurable results and long-lasting success.


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Company profile Cognizant Technology Solutions

Cognizant (NASDAQ: CTSH) is a leading provider of information technology, consulting, and business process

outsourcing services, dedicated to helping the world's leading companies build stronger businesses. Headquartered in

Teaneck, New Jersey (U.S.), Cognizant combines a passion for client satisfaction, technology innovation, deep industry

and business process expertise, and a global, collaborative workforce that embodies the future of work. With over 75

development and delivery centers worldwide and approximately 211,500 employees as of December 31, 2014,

Cognizant is a member of the NASDAQ-100, the S&P 500, the Forbes Global 2000, and the Fortune 500 and is ranked

among the top performing and fastest growing companies in the world.

Visit us online at http://www.cognizant.com or follow us on Twitter: Cognizant


http://www.cognizant.com

https://twitter.com/cognizant

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Company profile T-Systems International GmbH

T-Systems is Deutsche Telekom’s corporate customer arm. Drawing on a global infrastructure of data centers and

networks, T-Systems operates information and communication technology (ICT) systems for multinational corporations

and public sector institutions. T-Systems provides integrated solutions for the networked future of business and society.

Some 50,000 employees at T-Systems combine industry expertise and ICT innovations to add significant value to the

digitization strategies and core business of customers all over the world. T-Systems generated revenue of around

EUR 9,5 billion in the 2013 financial year.


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Company profile IAV GmbH

Welcome to IAV, Your Partner for Automotive Engineering

No matter where you are, you’re certain to find vehicles that include a number of IAV innovations. And no wonder – after all, we’re a leading engineering partner for all major car manufacturers and suppliers across the globe. There’s a good reason for that – over the past 30 years, we’ve built up a unique spectrum of competencies.

Our expertise is not only vast, it is also accessible everywhere. You’ll always find IAV experts close by – more than 5,000 of them are spread around the world, committed to giving you first-rate support wherever you are – from our sites in Germany and throughout Europe, to Asia and the Americas.

Whether you need our support in the field of combustion engines or alternative drives, or whether you are looking for a strong partner for electromobility, electronics, or software, we’ll work with you to develop innovations in driver assistance, lightweight construction and safety. In other words, we are competent in all automotive areas, from the initial idea to mass production, and from sub-compacts to trucks.

Our formula for success? We’re car enthusiasts ourselves, so we always see the world through the eyes of your customers. That’s why our name stands not only for technical perfection, but also for intelligent driving pleasure. You’ll be pleased with our work too. The combination of excellent developers and state-of-the-art equipment ensures that your projects are finished with precision. We’re at your side – from our first discussion to the start of production.

That’s our promise to you.


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Company profile Wipro Technologies

About Wipro

Wipro Ltd (NYSE:WIT; NSE: WIPRO) is a global information technology, consulting and outsourcing company with more than 150,000 workforce serving 1000+ clients, including a number of Fortune 500 and Global 500 corporations in 175+ cities across 6 continents. The company posted revenues of $7.3 billion for the financial year ended Mar 31, 2014.

With a track record of over 25 years, Wipro's business success has been driven by keeping the customer at the core of everything it does. Combining its deep expertise in technology with an equally clear understanding of customer industries, Wipro attempts to deliver business value to customers consistently. The consistency is driven by our pioneering efforts in service quality and predictability, through methodologies like Six Sigma, PCMM and Lean. The underlying tenets that drive this overall culture are that of speed, simplicity and excellence. Wipro helps customers do business better by leveraging our industry-wide experience, deep technology expertise, comprehensive portfolio of services and vertically aligned business model. Our 55+ dedicated ‘Centers of Excellence’ enable us to harness the latest technology for delivering business capability to our clients.

Wipro is globally recognized for its innovative approach towards delivering business value and its commitment to sustainability. Wipro champions optimized utilization of natural resources, capital and talent. In 2014, Wipro was recognised as global leader in the software & service category, member of the Dow Jones Sustainability World Indices for the fifth year in a row. Wipro was also named as a World's Most Ethical Company by Ethisphere Institute for the third successive year. Today we are a trusted partner of choice for global businesses looking for technology interventions.

In today’s world, organizations will have to rapidly reengineer themselves and be more responsive to changing customer needs. Wipro is well positioned to be a partner and co-innovator to businesses in their transformation journey, identify new growth opportunities and facilitate their foray into new sectors and markets by delivering technology driven business outcomes.


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Disclaimer, usage rights, independence and data protection The creation and distribution of this study was supported by BearingPoint, Cognizant Technology Solutions, IAV GmbH, T-Systems International GmbH and Wipro Technologies.

For more information, please visit www.pac-online.com.

Disclaimer The contents of this study were compiled with the greatest possible care. However, no liability for their accuracy can be assumed. Analyses and evaluations reflect the state of our knowledge in February 2015 and may change at any time. This applies in particular, but not exclusively, to statements made about the future. Names and designations that appear in this study may be registered trademarks.

Usage rights

This study is protected by copyright. Any reproduction or dissemination to third parties, including in part, requires the prior explicit authorization of the sponsors. The publication or dissemination of tables, graphics etc. in other publications also requires prior authorization.

Independence and data protection This study was produced solely by Pierre Audoin Consultants (PAC). The sponsors had no influence over the analysis of the data and the production of the study.

The participants in the study were assured that the information they provided would be treated confidentially. No statement enables conclusions to be drawn about individual companies, and no individual survey data was passed to the sponsors or other third parties. All participants in the study were selected at random. There is no connection between the production of the study and any commercial relationship between the respondents and the sponsors of this study.


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About us

2015

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Stefanie Naujoks

Analyst – Project Services & Manufacturing Markets

+49 (0)30 23 23 68 22 [email protected]

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