Tata Consultancy Services (TCS) is a leading global IT services, consulting and business solutions organization. Aftermarket Business World recently spoke to Sreenivasa Chakravarti, Vice President - Future Manufacturing Enterprise Team, TCS, about the transformation of vehicles into connected technology platforms.
How is the intersection of technology platforms and automakers playing out in the market currently?
That’s the talk of the town in terms of the business that we are dealing with. When we look at vehicle as a platform, the way we are looking at it is as a digital experience platform. It’s not just the amount of technology that is going into vehicle, but also how it is merging with the ecosystem around it, both the physical and digital world, and providing competitive differentiation.
There is a new tier of suppliers that is emerging among the technology companies, and they range from chipset manufacturers to head unit suppliers, and even telecom companies.
Differentiation is a must, but it is adding a bit of financial pressure. Companies expect to see large revenue streams coming out of these new technology concepts, but commoditization has been rapid. That creates the financial pressure, because OEMs have to change the vehicle design and they are challenged to get those changes out to the market.
Looking at the premium vehicle segment, their ability to recover the incremental price on the vehicle because of these capabilities is going to be higher. The elasticity of demand there is more favorable. When you get to more competitive segments like regular sedans or SUVs, it will be more challenging.
What do you see as the key challenges for this connected vehicle/vehicle-as-a-platform concept?
Many different industries are converging around the automobile in some form as an experience platform. Insurance wants a part of this, telecom wants to have part of this. Ultimately, everybody is looking at this experience and trying to monetize the time you spend in the car. There is also a lot of data generated that could be monetized in order to create new revenue streams.
At times, though, all this talk appears to be a mirage. How do you convert these opportunities into hard dollars of significant size? That is the biggest challenge in this market – the ability and propensity of consumers to pay for these services is still a question mark.
What do you see as the best opportunities that are emerging in the connected vehicle space?
One is well being – the ability to track and make sure that the driver and vehicle are doing well. Roadside assistance is part of that, but drivers also want an immediate response. There’s good consumption of those kinds of capabilities.
The next is contextual knowledge – you are passing through a place and want to understand where you can get additional benefits.
At the other end of the spectrum are things like maps. You can just use your smartphone to get a good map. Those are not exciting features in the sense that anyone would be willing to pay for them. That can change as autonomous features in the future could merge with the last-mile map and provide greater value than what you can do on a smartphone.