Car-to-car connectivity systems poised to deliver added revenue streams

Jan. 1, 2020
Automakers, mobile electronics suppliers, universities, the U.S. government and industry organizations are bringing to market an array of highly sophisticated vehicle-to-vehicle communication systems.

Automakers, mobile electronics suppliers, universities, the U.S. government and several industry organizations are on a fast-track toward developing and bringing to market an array of highly sophisticated vehicle-to-vehicle communication systems.

With designations such as V2V, V2X and ITS (intelligent transportation systems), it’s anticipated that by 2020 the connected car field will reach a value of $600 billion as 90 percent of new vehicles will come equipped with connective technology, according to Matt Hatton, a director at Machina Research.

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“This will be driven by manufacturers seeking to differentiate their offerings and build new revenue streams, as well as the growth of plug-in electric vehicles, which will demand connectivity,” Hatton says.

The National Highway Traffic Safety Administration (NHTSA) estimates that widespread adaptation has the potential to minimize – or avoid altogether – up to 80 percent of the crashes that currently occur on the nation’s roadways.

“And one of the most attractive aspects of this new technology is its low cost,” says Chief Administrator Peter Appel at the U.S. Department of Transportation’s Research and Innovative Technology Administration (RITA).

“As amazing as vehicle-to-vehicle communication may seem, it is built on the same wireless technology you have in your home. When these vehicles go into production, we expect the new safety enhancements to add no more to the cost of your car than the seat belts we take for granted today,” he says.

“And that’s good news for all of America’s families. Each additional vehicle on the road equipped with this technology,” adds Appel, “makes everybody on the road safer. So, knowing that it will be affordable is actually a big safety plus.”

“These systems are being aggressively developed because they could be the next big safety breakthrough,” concurs Rik Paul, the automotive editor at Consumer Reports, which has long advocated for these types of initiatives. “But adequate oversight of how the information is used is essential to ensure the privacy of drivers and to prevent abuse,” he adds.

American motorists apparently share these concerns, according to recent Harris Poll results indicating that 62 percent of those surveyed “worry about how technology may interfere with their privacy, including where and how they drive.”

“The data shows that consumers generally favor the safety and entertainment they find with in-car connectivity, but they don’t want to give up their privacy by sharing detailed information about their driving habits with companies that may stand to benefit from the information,” says Mike Chadsey, Harris’ vice president of automotive solutions.

“In addition, the fear of technology distraction seems to outweigh the other perceived benefits of having in-car connectivity options,” he continues. “Car makers should take note; depending on the generation of their target market, in-car connectivity can have influence on the buying decision, but too much of a good thing may just be too much,” says Chadsey.

“Ultimately, when it comes to marrying technology with their car, consumers want it to be both safe and in a way that they can control. Americans may be addicted to their technology, but they also love the freedom represented by their automobile and are not ready to have anything interfere with their driving experience,” he notes.

Just over two in five U.S. car owners (41 percent) believe that their insurance rates could increase because of what in-car technology reveals about their driving habits. This is more of a concern among younger drivers between 18 and 35, according to the poll.

Yet more than half of car owners find that in-car connectivity makes driving more enjoyable (58 percent) and makes them feel safer (57 percent) while on the road. Men in particular like having connectivity in their cars (64 percent), more so than women (53 percent), and they feel safer with technology on board (61 percent) compared to women (54 percent).

“The trend of embracing in-car technology is clearly generational,” says Chadsey. “It’s the Baby Boomer generation that finds staying connected while in their vehicle the least important. Only 39 percent of car owners 50 to 66 think in-car connectivity is important, compared to 58 percent of those who are between 18 and 35.”

When it comes to new car purchase decisions, two in three car owners between 18 and 35 (66 percent) say that the vehicle’s technology has “some or a great deal of influence” on the next car they choose. This drops to just 46 percent for those between 50 and 66, he reports.

Casting survey misgivings aside, the research goes on.

“Connected vehicles have the potential to transform the way Americans travel through the creation of a safe, interoperable wireless communications network that includes cars, buses, trucks, trains, traffic signals, cell phones and other devices,” explains Michael Schagrin, safety program manager at RITA’s ITS Joint Program Office.

“Like the Internet, which provides information connectivity, connected vehicle technology provides a starting point for transportation connectivity that will potentially enable countless applications and spawn new industries,” he says.

“User experiences that are natural and intuitive – that simplify access to mobile and cloud-based services – and that help drivers stay focused are key to consumer adoption of tomorrow’s connected vehicles,” says Derek Kuhn, vice president of sales and marketing at QNX Software Systems.

Citing “the importance of marrying automobiles with creative technologies,” Ford’s manager of global trends, Sheryl Connelly, points out also that the looming specter of massive traffic jams on over-crowded city streets warrants further inroads into leveraging the capabilities that vehicle connectivity can achieve. “These innovations will be even more important in a future where urbanization and growing vehicle ownership could literally grind major cities to a halt around the world,” she says.

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