Staying connected while on the move

Automotive Services Consumer Research

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Automotive Services Consumer Research
The project
referenced in
this brochure
was delivered by
Logica, which
CGI acquired in
August 2012
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Automotive Services Consumer Research
Introduction 04
Connected cars 04
Market developments 04
Automotive Services 05
Consumer Survey 06
Aim 06
Approach 06
Summary ndings 06
Analysis 09
Automotive services adoption 09
Interpretation 09
Valued services 10
Trusted organisations 10
Interpretation 11
Driver experience 12
Work related travel summary 14
Service station use 15
Summary 17
Why CGI 17
Authors 18
Contents
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Automotive Services Consumer Research
Introduction
his paper summarises a survey conducted by CGI in July 2012. 1000 UK consumers
were surveyed about their attitudes towards in-car services such as pay-as-you drive and
infotainment.
Connected cars
The introduction of satellite navigation, mobile communications, smart phones and pay-as-you-drive
insurance is evidence of the ways in which cars and other vehicles are becoming increasingly connected
with the world around them. This integration helps transform the relationship people have with their
cars as well as heralding a signicant opportunity to provide infotainment services. The amount an
organisation is trusted affects levels of use and engagement with services. Therefore the trust that
consumers have in the brands providing or thinking of providing in-car services is clearly important.
Market developments
Many reports have predicted signicant growth in connected car services over the next decade. However,
in a at economy, with reduced numbers of cars sold, it remains to be seen whether technology will
stimulate new revenue. It is perhaps more likely that the growth in mobile transactions may simply be
existing cash being spent in new ways.
Change can be profoundly unsettling while at the same time provide substantial opportunities.
Consequently, there is a risk that companies that are unable or unwilling to respond to market changes
will be wrong-footed and suddenly nd that the market has moved on without them and they are left
behind. For example, traditional market sector categorisation may change the way organisations are
structured to support their customers. In the case of cars, machine-to-machine (M2M) technology
opens the possibility of a new market for in-car and virtually connected automotive services.
What is certain is that a combination of factors such as the economy,
energy and technology is set to redene the relationship people have
with their cars over the next decade. The development of driverless
vehicles provides evidence that, at one extreme, the changes could
be as profound as the introduction of the horseless carriage in the
late 1800s.
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Automotive Services Consumer Research
Automotive Services
echnology and innovation have enabled cars to be more connected to other cars (vehicle
to vehicle, or V2V), as well as to infrastructure (V2I). Such connected car technology has
started to break down the boundaries of the traditional market sectors of automotive, retail,
nance and mobile telecom. The term automotive services, denes an emerging market
driven by mobile technology. Examples include:
automatic remote payment of road tolls
automatic remote payment of parking fees
pay-as-you-drive insurance
in-car entertainment
after market vehicle technical support
navigation and trafc services.
The automotive services market offers substantial opportunities for many organisations to offer both
new and existing services to motorists enabled by mobile technology. We only need to look at how
the retail grocery sector has expanded into sales of fuel, insurance, telecoms, consumer electronics
and banking to gain some appreciation of the possibilities.
Launching new services can be expensive and there is always the risk that investment returns may not
be realised. Consequently, it is important to understand the main risks and how they might be reduced.
While a number of services such as pay-as-you-drive insurance are already available, the market is in
its early days. Although there is much speculation about the opportunities, it is inevitable that consumers
will take time to learn what services might be offered and their potential benets.
Launching new services in
an emerging market can be
expensive and there is always
the risk that investment
returns may not be realised.
Automotive Services Consumer Research
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Consumer Survey
Aim
We conducted a survey in July 2012 to provide insights into consumer attitudes towards connected
car services that are available now and in the future.
Approach
We surveyed over 1000 consumers asking them:
what automotive services they currently received versus those they would be willing to pay for in
the future
the level of trust they had in the organisations that might deliver those services
levels of car use and whether the car is part of an individuals personal space
whether connected car services might change how consumers use service stations.
Summary ndings
Responder Proles
Of the 1006 survey participants 54% of respondents were female versus 46% male. The proles by
age, location and income are as follows.
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Gender responses by age
Figure 1: Age and gender prole
Automotive Services Consumer Research
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Gender responses by income
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Figure 2: National perspective with greatest response from London and South East England
Figure 3: Income distribution representative of the UK average
Automotive Services Consumer Research
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There are many organisations that have an interest in connected car services - government agencies,
retailers, insurers, nancial and telecom providers. We discovered that:
the difference in responses between services received now and those that consumers would be
prepared to pay for in the future exposed differences between high and low value services
on average automotive brands were most trusted to provide automotive services, which is good
news for them
worryingly some brands are less trusted to provide these services
retailers are more trusted to provide location based advertising than other organisations
providing advanced information about service station offers will have an impact on the ways that
consumers use roadside facilities but not signicantly at this stage.
Automotive Services Consumer Research
Automotive services adoption
Results
The survey requested people to identify the services they received now versus those they would be
willing to pay for in the future.
Figure 4: UK Automotive Services
Interpretation
A high proportion of consumers currently receive no services and a slightly higher proportion are currently
not prepared to pay for services in the future.
The fact that a high proportion of consumers are not currently receiving connected car services reects
the potential for growth. As a greater proportion would not be willing to pay for services it could well
reect the low level of awareness of the benets that connected car services might be able to offer.
High value services: greater value seems to be attributed to those services where the number of
responses to would be willing to pay is higher than service currently received. For example pay-
as-you-drive insurance.
Low value services: lower value seems to be attributed to those services where the number of responses
to would be willing to pay is lower than service currently received. For example navigation services
and automatic emergency calling.
Analysis
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Received now
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Automotive Services Consumer Research
Valued services
The survey results show that while a signicant number of consumers receive services such as navigation
and automatic emergency calling now, fewer would be prepared to pay for them in the future. This
implies that they are not currently valued highly, or simply that the jump from what is now perceived
as free to what would be charged in the future is too great.
In contrast, while fewer consumers received services such as pay-as-you-drive insurance, automatic
road-toll payment and automatic remote parking payment, a greater number expressed a willingness
to pay for them in the future. This implies that these services are more highly valued. This could be due
to the high hassle factor of such services.
Trusted organisations
Results
The survey requested people to identify the services they received now versus those they would be
willing to pay for in the future.
Figure 5: UK Consumer Trust
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Most trusted to provide
automotive services
Most trusted to manage
personal information
Trusted to provide
location based advertising
11
Automotive Services Consumer Research
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Interpretation
The greatest number of responses was received from consumers who felt they trusted no organisation
to provide automotive services and this increased when questioned about the management of personal
information and location based advertising.
the greatest number of respondents indicated they trusted no one to provide services
automotive brands (original equipment manufacturers (OEMs)) and high street retailers are most
trusted to provide services
retailers are most trusted to provide location based advertising
government agencies were not attributed the same trust to provide services as retailers and
automotive manufacturers. They were trusted more with regards to the management of personal
information.
As the world becomes increasingly connected the volume of organisations requesting access to our
personal information will increase signicantly. Securely maintaining personal data is rightly seen as
important. Consumers were asked to indicate which organisations they would trust to provide services,
offer location-based advertising and also to manage personal information. The results were:
automotive manufacturers were more trusted to provide in-car services than other organisations
retailers were similarly trusted but also found to be trusted more to provide location based
advertising
government agencies were more trusted to manage personal information than private sector
organisations.
Trust levels affect engagement with and use of services, so the trust that consumers place in brands
is clearly important. Brand trust is a currency easily lost and has therefore been rising in importance
over the last decade. It is therefore signicant that certain organisations are more highly trusted than
others as this market develops.
12 cgi.com
Automotive Services Consumer Research
Driver experience
Car Manufacturer Representation
Figure 6: Manufacturer of car driven by consumer respondents
Frequency of use and driver experience
The stress and inconvenience decreases with increased car use
Pleasure increases with increased car use - when it becomes part of the daily routine.
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Respondents by car manufacturer
Car brands represented in survey
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Driver experience
Driver experience and frequency of use
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An inconvenience
A stressful experience
An opportunity to unwind
Pleasurable
Part of my routine
1 to 2 days 3 to 4 days 5 to 6 days Everyday
13 cgi.com
Automotive Services Consumer Research
Frequency of use and personal space
Consumer perception of their cars as an extension of their personal space is associated with
increased car use
There is a consistent proportion of people (about 10%) who do not consider that their car is an
extension of their personal space - regardless of how much they use their cars.
Frequency of use and ownership
Increased car use corresponds with increased car ownership
Car sharing corresponds with low car usage
Use of a family members car falls as car use increases.
0
50
100
150
200
250
300
Is your car a part of your personal space?
Car usage
N
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Not part of my personal
space
Part of my personal
space
1 to 2 days 3 to 4 days 5 to 6 days Everyday
0
50
100
150
200
250
300
350
Car use and ownership
Car ownership and frequency of use
N
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Car share group member
Family member
Employer
Driver registered owner
1 to 2 days 3 to 4 days 5 to 6 days Everyday
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Automotive Services Consumer Research
Frequency of use and work related travel
The greatest response was provided by consumers who never used their car for work. The
number of responses provided by this group fell with increased car use
All other drivers used their car for work in some way and greater numbers of responses
corresponded with increased car use.
Work related travel summary
48% of respondents never use their cars for work
58% of respondents used their cars for work regularly, commuting or occasionally.
0
20
40
60
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100
120
140
Car used for work?
Car used for work?
N
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Never
All the time
Regularly
Occasionally
Communting
1 to 2 days 3 to 4 days 5 to 6 days Everyday
Never
Occasionally
Regularly
Commuting
All the time
42.4%
8.2%
19.3%
23.0%
7.2%
Do you use your car as part of your job?
15 cgi.com
Automotive Services Consumer Research
Service station use
To determine whether connected car services were more or less likely to impact the use of roadside
facilities, consumers were asked about their car use in relation to service stations. Opinions on the
impact of advanced notication of services, ordering prior to arrival and location based advertising were
sought. The results indicate that such services would change driver behaviour but not signicantly. It
may also be the case that services and offers currently available are not compelling enough to change
behaviour signicantly.
To establish consumer attitudes to the impact that connected car technology might have on car use
and retail sales a number of questions were posed to establish current use of service stations and
whether advanced information might affect that use. The type of advanced information considered
was location based advertising and advanced order as might relate to dining.
Most consumers stop at service stations as a matter of necessity or simply to have a break.
0
50
100
150
200
250
300
350
450
400
How would you describe your current use of service stations?
Current service station use
N
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Stop out of
necessity
Stop for a break Rarely stop Dont stop
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Automotive Services Consumer Research
The majority of responses indicated that advanced information would not affect their use of
service stations.
Responders were more positive about the impact that services might have on their use of
service stations.
0
100
200
300
400
500
600
700
800
Would advanced information affect your use of service stations?
Impact of advanced information on service station use
N
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b
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p
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Less More No difference
Advanced offer information
Ability to place advanced orders
0
100
200
300
400
600
500
What services would make you more likely to stop at a service station?
Service availability and increased service station use
N
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Banking
services
Washing/
showering
facilities
Post
offce
Medical
facilities
Personal
grooming
Temporary
offces
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Automotive Services Consumer Research
Our survey shows that although it is still early days in this market place, there are signs that consumers
are beginning to think about the possibilities and may be open to new services and offers, perhaps
via service bundling and location-based messaging.
It is also clear that trust will be an important criteria for consumers when they begin to make purchasing
decisions. The market appears wide open for unrelated organisations to step in and offer new services
if they are targeted, relevant and hassle-free.
Our impression is that this is a market just beginning to be created and that there is signicant rst
mover advantage to be gained if innovative offers can be made. The technology to support the required
business models is readily available. Concern needs to be given to business cases, ROI and speed to
market, but with advances in machine-to-machine and micro-payments it is clear that the consumer
is open to the possibilities offered by in-car infotainment and other services. Could you download a
new DVD for the kids at a service station rather than buying a hard copy to roll about on the oor of
your car? Can you improve your insurance premiums with an in-car monitoring device sending back
data on how you drive? Perhaps you could only install air-conditioning on the 10 days a year when
you need it? Or towards the end of your journey you might receive a money off voucher as you come
into range of a supermarket? The possibilities are endless!
Why CGI
Over 70,000 professionals in more than 40 countries
6th largest IT services provider in the world
Signicant presence in all major IT markets across the Americas, Europe and Asia Pacic
Full IT services capabilities and a large portfolio of IP-based solutions
Decades of combined experience and expertise across a broad range of industries and
technologies.
Summary
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Automotive Services Consumer Research
Authors
Ashley Morris is a seasoned industry analyst who has undertaken
numerous industry reports over recent years. His most recent work
includes research to identify approaches to improving industrial
efciency and the drivers leading to closer integration of process and
information ows. He has multi sector experience which includes defence,
manufacturing, transportation, health and education. Ashley has spoken it
a number of international conferences.
ashley.morris@cgi.com | 07968 296825
Adam Savill is an industry specialist in strategic sourcing, organisational
design and business process re-engineering. He has written several
white papers including: The People Factor - Preparing Organisations for
New Technology, Taking Control of Testing, The Increasing Signicance
of IT Asset Management, and Join the Revolutionaries Changing Role
of the CIO. Adam has spoken at a number of conferences including
GITEX.
adam.savill@cgi.com | 0759 5966 070
cgi-group.co.uk 19
Automotive Services Consumer Research
cgi.com
With over 70,000 professionals in 40 countries, CGI fosters local accountability
for client success while bringing global delivery capabilities to clients front
doors. Founded in 1976, CGI applies a disciplined delivery approach that has
achieved an industry-leading track record of on-time, on-budget projects. Our
high-quality business consulting, systems integration and outsourcing services
help clients leverage current investments while adopting new technology
and business strategies that achieve top and bottom line results. As a
demonstration of our commitment, our average client satisfaction score for the
past 10 years has measured consistently higher than 9 out of 10.
2013 CGI GROUP INC.
All rights reserved. This document is protected by international copyright law and may not be reprinted,
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means without the prior written consent of CGI.
The project referenced in this brochure was delivered by Logica, which CGI acquired in August 2012.
Whilst reasonable care has been taken by CGI to ensure the information contained herein is
reasonably accurate, CGI shall not, under any circumstances be liable for any loss or damage (direct
or consequential) suffered by any party as a result of the contents of this publication or the reliance of
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