THE FUTURE OF

AUTOMOTIVE
Scenarios Driving The Digital
Transformation Of An Industry

1 THE FUTURE OF AUTOMOTIVE

 Introduction
Car travel has shaped cities and suburbs, employment patterns and
distribution of goods all over the world since its inception. ‘Smart
cars’ have further built upon this mobility and the convenience
of individual travel by offering improved road safety, remote
maintenance and real-time data for more efficient routing. With the
rise of the connected car comes new opportunities for manufacturers
and dealers, enabling companies to use advanced analytics and
machine learning to build more direct feedback loops and increase
value for customers–from design to marketing to service offerings.
This new vision for the automotive industry is driven by the rise of
IoT, particularly as society is increasingly conscious about factors like
security, ownership, environment and safety.

About This Report

The Future of Automotive is a report by innovation think tank PSFK in
partnership with global technology and service provider Microsoft that
presents various opportunities for driving business forward in a mobile-
first, cloud-first world. The future state of the automotive industry is
brought to life through five forward-looking scenarios to highlight how
social consumer attitudes, connectivity and automation are shaping
the potential of personal and flexible mobility. Insights learned can help
manufacturers, OEMs and dealers understand how cloud-based solutions
can transform their businesses in order to drive new levels of service
throughout the entire value chain.

2 THE FUTURE OF AUTOMOTIVE

 Welcome To The Era Of
The Connected Company
We are at the threshold of unprecedented value creation for industry and
society, driven by the accelerating pace of change enabled through digital
technology. Whether it is about bringing together patient records so they
can be shared quickly for better patient outcomes, or changing the focus
from disease management to wellness in healthcare, digital transformation
is changing how we work and live.
Called the Fourth Industrial Revolution, this significant disruption of
traditional industries is fueled by speed, the falling cost of technology and
how quickly companies are growing. There is broad agreement that the
economic opportunity from digital transformation could be as high as
$100 trillion across all industries over the next decade.
This impact is broader than economics alone. Take the automotive industry
as an example. Recent analysis from the World Economic Forum estimates
approximately $670 billion of industry value and nearly $3 trillion of
societal value at stake by 2025, with one million lives saved due to digital
transformation, and the mass adoption of autonomous vehicles.
From Uber to Tesla and Airbnb, high-profile startups have already disrupted
traditional industries. Every business and industry is considering what digital
transformation means for them, and how it helps them reimagine their
company and their industry. The question isn’t “if”; and the challenge
isn’t “when,” but “how?”
Embracing digital has had mixed results. Why? There’s no set path to digital
maturity and mastery. What is the magic recipe for success? When you look
at successful companies in different industries, two core themes emerge.
First, enormous organizational change requires strong leadership — a clear
vision tied to real business outcomes. Second, digital must be embraced
across the entire business. Start with small projects that can be measured
and learned from, but plan for all areas of the company.
The digital roadmap can be built from a few questions:
• How does the customer experience change from sales to service?
• How does the company empower people to work together,
do their best work, and get more done? How do operations get
optimized for efficiency?
• How does digital open possibilities to transform products, business and,
perhaps, the industry?
3 THE FUTURE OF AUTOMOTIVE
Look at the automotive industry. We will reimagine how we build cars.
We will reimagine how we buy cars. We will reimagine what it is to ‘own’
a car. We will democratize the automotive experience for billions of people
across the world, and we will do this with our emerging digital capabilities.
Traditional car manufacturers – not known for digital innovation – are
embracing the ideas of connected cars and autonomous vehicles.
Real social and economic impact will be realized.
From entertainment and connectivity to predictive maintenance and
customer support, the in-car experience is changing, as is our expectation
of road safety. Digital will transform every aspect of the automotive
industry from core operations (supply chain, manufacturing,
dealerships/retail, service) to the entire value chain (service, aftermarket,
financing, vehicle insurance).
Digital Transformation marks the inflection point where new technology
becomes the central nervous system of the business, connecting sales,
marketing, finance, HR, production, logistics and customer service, while
changing forever how companies operate and people interact. The cloud,
data analytics, artificial intelligence, augmented reality and other emerging
technologies are the tools that enable new, improved and, sometimes,
disruptive new business capabilities. It’s about combining those tools with
business insight and techniques such as design-led thinking to examine
a problem from a different perspective and envisage new opportunities.
Microsoft is partnering with automotive companies worldwide to provide
the digital platform to help you to rethink the possibilities for human mobility.
This report surfaces ‘what could be’ in the digital transformation of the
automotive arena.
Welcome to the era of the connected company. The connected people.
The connected world at large. Digitally enabled and transformed.
Anand Eswaran
Corporate Vice President,
Worldwide Services, Microsoft
 Connected Vehicles -
Understanding The Opportunity
Evolving Automotive Marketplace
Connected vehicles make up approximately
20% of new vehicle sales today, but this is
forecast to reach over 90% by 2020.
Microsoft Book of Dreams, 2015
By 2020, 75% of cars shipped globally will be built with the
necessary hardware to connect to the Internet and sales of
connected cars will equal $2.3 trillion.
Business Insider, February 2015
The expected growth of the value pool from car data and shared
mobility could add up to more than USD 1.5 trillion
by 2030, and the foreseeable proliferation of new features
and services will turn “car data” into a key theme on the agenda
of the auto industry.
McKinsey, March, 2016
With autonomous vehicles, productivity gains would
come to $507 billion annually in the US, where
Americans spend some 75 billion hours a year driving.
Morgan Stanley, January 2015
4 THE FUTURE OF AUTOMOTIVE
Changing Consumer Attitudes
Roughly one in three drivers (34%) are
interested in a full self-driving vehicle.
J.D. Power 2016 U.S. Tech Choice Study, March 2016
Today, despite stated privacy concerns,
71% of drivers consciously share their data
in exchange for tangible benefits.
McKinsey, March 2016
51% of respondents prefer safety and security
features in a connected car over other features.
68% of consumers want the ability to see vehicle
diagnosis and their car’s maintenance needs.
Wakefield Research/Spireon Study, February 2016
An IIHS field test found that 72% of people who tried
multiple crash-avoidance technologies said they would
want them in their personal vehicle.
Consumer Reports, February 2014
There is an untapped $5.4 trillion market for car-sharing
services like Zipcar and ride-hailing service like Uber that
are unrelated to conventional car ownership.
“Ford Hits The Gas on Self-Driving Cars,” Fortune, January 2016
 An Expert View
Of The Industry
“The digital and technological transformation
of business across industries — from healthcare,
to energy, to automotive — offers enormous
opportunity for those who choose to capitalize on it.”
Peggy Johnson, Executive Vice President,
Business Development, Microsoft
“We will reimagine how we build cars. We will
reimagine how we buy cars. We will reimagine what
it is to ‘own’ a car. We will democratize the automotive
experience for billions of people across the world, and
we will do this with our emerging digital capabilities.”
Anand Eswaran, Corporate Vice President,
Worldwide Services, Microsoft
“We are moving from an industry that, for 100 years,
has relied on vehicles that are stand-alone,
mechanically controlled and petroleum-fueled to
ones that will soon be interconnected, electronically
controlled, and fueled by a range of energy sources. I
believe the auto industry will change more in the next
five to 10 years than it has in the last 50, and this gives
us the opportunity to make cars more capable, more
sustainable and more exciting than ever before.”
Mary Barra, CEO, General Motors
“For me it is a core competence to have the most
intelligent car. We have some catching up to do in
the area of machine learning and artificial intelligence…
Our task is to preserve our business model without
surrendering it to an Internet player. Otherwise we will
end up as the Foxconn for a company like Apple,
delivering only the metal bodies for them.”
Klaus Froehlich, Head of R&D, BMW
“For the first time in history, car makers can now have
a direct and continuous engagement with their end
customers through the connected car and associated
apps. They can look at the broader mobility needs and
lifestyles of their customers, offering them an opportunity
to go beyond just selling a car, but adding a whole range
of value-added services to meaningfully deliver what’s
important to their customers’ needs.”
Rohit Bhargava, CTO,
WW Manufacturing & Resources Sector, Microsoft

“The industry is going through a digital transformation.

Automotive companies are becoming digital businesses
and creating new smart mobility services. Think of the
car of the future as your living room on wheels …
or your office on wheels.”
Sanjay Ravi,
Worldwide Managing Director of Manufacturing, Microsoft

5 THE FUTURE OF AUTOMOTIVE

 Trends Driving
The Automotive Industry
Synced Experiences
Wearable, mobile and biometric identifiers are being used to identify
individual drivers, prompting an automated set of custom actions
and settings that help personalize the ownership experience, while
ensuring all driver data remains private and secure.
Personal Assistant
Vehicles are combining an understanding of individual behaviors
alongside a wider variety of contextual information to serve up
preemptive and personal reminders, recommendations and actions.
Mobile personal assistants are becoming more prevalent across devices.
Biometric Adjustments
Sensor-packed vehicles are capable of monitoring a wide
range of driver conditions, from alertness levels and general
wellness to emotional state, and respond with a number of preset
actions. Whether changing the lighting, adjusting the temperature
or providing haptic feedback, these systems are designed to create
a safe and comfortable driving experience.
Self-Aware Analysis
Connected vehicles are being built with the ability to monitor and
diagnose their operations and performance, recognizing potential
maintenance or safety issues before they become bigger problems,
and taking the necessary actions to ensure they’re resolved.
Orchestrated Automation
Cloud-enabled vehicles are becoming a key component of the
broader connected ecosystem, from homes and offices to retail and
core city infrastructure, increasing the opportunities for automated
actions to be integrated into the everyday. These responses are kept
secure through encrypted communications and operational processes,
mitigating threats and optimizing security for customer data that is
pre-programmed into the system or transferred between environments.
6 THE FUTURE OF AUTOMOTIVE
Contextual Responsiveness
Sensor-equipped vehicles are gathering and analyzing
information from their immediate surroundings–road conditions,
other vehicles, etc.–alongside real-time information like weather
and traffic data to make incremental adjustments to their
performance and navigation, or take direct actions as needed,
ensuring optimal efficiency and protection.
Conversational Intelligence
Developers are incorporating AI-driven interfaces into operating
systems, allowing drivers to engage with and control a number of
operations through conversational commands. These hands-free
interactions open the door to a wider variety of seamless, in-
vehicle experiences from productivity to entertainment.
Augmented Dashboards
Heads-up displays and projected information are creating
hands-free ways for drivers to interface with multiple information
streams while on the go. By changing the ways in which drivers
access and interact with pertinent information, these technologies
ensure greater safety and added convenience.
Mobile Hub
Consumer-centric apps are connecting car owners to a broader
community of drivers, to their vehicles and to experts for always-
available communication for every stage of the consumer lifeline.
These connectivity tools enable more seamless communication
between the owner and their vehicle, as well as drivers to
dealers and drivers to social networks, creating a smarter and
frictionless journey.
 The Future Of Automotive:
4 Industry Disruptors
Connected Driving Experiences
Connected and autonomous cars are empowering car owners
inside and outside of their vehicles and enabling car companies
to better serve their customer through the entire lifecycle of car
ownership. With the integration of connectivity, machine learning
and assisted driving capabilities, car manufacturers are able to
build smarter products and deliver engaging and personalized
experiences that keep pace with customers’ busy lifestyles.
New Models Of Access And Ownership
Connected business networks is the next evolution of personal
travel as societal decisions become more heavily influenced by
factors like security, ownership, environment and safety. With
the proliferation of on-demand vehicles and car sharing, auto
companies are further building upon the concept of mobility
and access with pay-as-you-go insurance and fleet management
services. As more people turn to car-sharing and ride-sharing as
alternatives to personal car ownership, global manufacturers are
embracing this unconventional owner-driver model.
7 THE FUTURE OF AUTOMOTIVE
Enhanced Dealer-Customer Relationships
Connected car technology has opened up channels for direct
communication between car owners, service providers and
sales teams. As a result, the customer experience journey now
operates across multiple digital hotspots, including customers’
ability to virtually test-drive vehicles, service consultants
scheduling over-the-air updates and car dealers personalizing
after-sales loyalty programs. With these evolving customer
relationships, manufacturers are reimagining their marketing
and customer care strategies to deliver more personalized and
relevant sales and offers.
Seamless, Secure Communication
With Smart Ecosystems
In the future, the car will become a node in a bigger network,
a smart ecosystem made up of smart homes, infrastructure
and cities. Secure vehicle-to-vehicle, vehicle-to-pedestrian
and vehicle-to-infrastructure communication made possible by
connectivity and the Internet of Things are enabling greater
automation and road safety. As more vehicles and devices
become interconnected, manufacturers and city-planners are
leveraging cloud-generated data to pave the way for safer
journeys and more efficient roads.
 5 Connected Scenarios For
The Automotive Industry
Exploring The
Potential Of
In-Vehicle Productivity
Today’s always-on consumers
expect a seamless level
of connectivity to follow
them throughout their
days. Emerging solutions
such as intuitive interfaces,
AI systems, cloud-based
communications and greater
contextual awareness are
now bringing vehicles
online and opening the door
to an entirely new set of
driver experiences.
9 and proactive car service
8 THE FUTURE OF AUTOMOTIVE
Powering The
Vehicle With Connected
Service Operations
The integration of smart
vehicles onto the roads today
creates efficiencies for all car
owners, allowing drivers to
experience greater comfort,
improved usage and more
personalized rides over time.
In harnessing data aggregated
across mobile platforms, car
manufacturers and dealers
are able to securely monitor
automation in real time and
provide detailed maintenance.
Customers receive responsive
that is non-intrusive, respects
customer privacy and data,
and improves safety
and performance.
13
The Rise Of
Flexible Mobility
Services
Due to high costs and
logistical issues, single
vehicle ownership doesn’t
make sense for many urban
residents. In the absence
of a connected vehicle and
support ecosystem, sharing
a car throughout the week
has been too complicated
for many to consider. Mobile
services, sensor-enabled
vehicles and access to
mobility infrastructure
now help split the time
and costs of ownership,
while ensuring multiple
owners enjoy a uniquely
personal experience.
18
The Future
Of Automated
Safety And Security
With a new suite of hands-
free and automated driving
capabilities in the vehicle,
connected cars are paving the
way for safer roads for drivers,
passengers and pedestrians.
Through telemetry and real-
time feedback, vehicles are
able to anticipate unsafe
weather conditions, detect
pedestrians via wearables,
and communicate with nearby
infrastructure to help predict
and prevent incidents.
22
The
Connected
Dealership
Individuals who are looking
to test new models and in-
vehicle mobility solutions rely
on knowledgeable customer
service representatives to
guide them through the
decision-making process. The
emergence of new, connected
technologies and experiences
now enable dealers to offer
interactive, virtual and social
support to customers both
before and after a sale,
creating more confidence and
fostering better relationships.
27
 Exploring The Potential
Of In-Vehicle Productivity
The rise of mobile and digital tools have changed the way people
communicate, access information and manage their lives. Today’s
always-on consumers expect a seamless level of connectivity to
follow them throughout their days.
Emerging solutions such as intuitive interfaces, AI systems, cloud-
based communications and greater contextual awareness are now
bringing vehicles online and opening the door to an entirely new
set of driver experiences. To keep pace with customer demand and
lead the market in innovation, manufacturers and OEMs must look to
develop and integrate these technologies and cloud-based solutions
into their product roadmaps. Dealers need to consider how best to
bring the benefits of these experiences to life for their customers.
Trends Driving This:
Highlighting The Opportunity
“Imagine a world where your car is intelligent enough
to deliver productivity services, virtual assistance,
predictive maintenance and autonomous driving all
on a pay-as-you-drive basis. Enter the Connected Car
powered by the Microsoft Intelligent Cloud.”
Kevin Dallas, Corporate Vice President,
IoT Business Development, Microsoft
“Microsoft Azure will help us deliver a more innovative
and intelligent future for our connected technologies.
This is also a bold first step toward innovations that
will realize future new mobility.”
Celso Guiotoko, Corporate Vice President, Nissan

• Synced Experiences
• Personal Assistant
• Orchestrated Automation
• Augmented Dashboard
“It won’t be long before your car is connected to the
Internet, to other cars, to public infrastructure, to your
mobile phone, and to your home computer. Your car
will become a companion and an assistant to your
digital life and we’re working with automakers to make
mobility a seamless part of your life.”
Rohit Bhargava, CTO,
WW Manufacturing & Resources Sector, Microsoft

In-vehicle infotainment systems will produce

revenues exceeding $600 million within four years.
148 million consumers will make contactless
payments this year.
Juniper Research, January 2016

9
9 THE FUTURE OF AUTOMOTIVE
 Exploring The Potential
Of In-Vehicle Productivity
Scenario One: A More Productive Commute Home

Let’s imagine what the future automotive experience might look like for
a working mother of two, trying to balance the stress of work with a busy
family life and long daily commute. To illustrate this we turn to Nancy,
42, who at work and at home is constantly on the move. Her 90-minute
commute to and from the office each day is her opportunity to catch
up on emails and important to-dos. She looks forward to this time and
appreciates the ability to get things done without missing a beat.

Nancy walks out of her office on a conference call with a client 1

and members of her team. As she approaches the vehicle, the
doors unlock and the ignition switches on.

As Nancy gets into the driver’s seat, the conference call 2

seamlessly switches from her phone to a hands-free option 3 Nancy is later to leave the office than usual. Recognizing that she
within the vehicle, allowing her to continue the conversation as typically orders food for the family when she’s running late, the
she heads for home. Cortana personal assistant presents a list of take-out options for her
to order and pick up en route.

4 After finishing the call, she decides on a healthy fast casual

concept and uses voice-command to dial. After placing her order,
a confirmation number and order total flashes on the corner of the
windshield, followed by an updated estimate of travel time to the
restaurant given current conditions.

With her time, Nancy asks Cortana to pull up her work email, which
5 allows her to hear and respond to messages in her inbox. An email
from a client lets Nancy know that he’ll be flying into Seattle next
week and would like to schedule a face-to-face meet at her office.
Nancy calls up her calendar and asks the system to find availability in
her schedule based on her client’s suggested times. The system finds
a two-hour block on Tuesday, sending an invite to Nancy’s client and
key members of her team.

10 THE FUTURE OF AUTOMOTIVE

 As Nancy pulls into the pick-up 6
zone outside the restaurant, an
alert pops up on the windshield
showing her order as paid with a $
connected in-vehicle payments
system, and an estimated wait time
of 5 minutes to have her order
brought out to the car.

7 After receiving her food and leaving the

restaurant Nancy tells Cortana to send a ping
to a conversational interface in Nancy’s home,
letting her family know that she’s picked up
dinner and is approximately 15 minutes away.
A connected set of lights turn on in the dining
room, reminding her kids to set the table.

8 As she approaches her home, the garage door

automatically opens, allowing her to easily park
and enjoy her evening with her family.

11 THE FUTURE OF AUTOMOTIVE

 Exploring The Potential
Of In-Vehicle Productivity
What This Means For The Automotive Sector
Manufacturers | OEMS
• Deliver intelligent, engaging and personalized experiences that
align with customers’ on-demand and always-on lifestyles
• Consider what interfaces will be best suited to a safe and
productive in-vehicle experience
• Consider the security systems required to enable customers
to safely and easily share their data with other people,
vehicles, stores etc.
• Leverage real-time customer insights to increase agility in
responding to new business needs
Dealers
• Develop dynamic training tools that keep sales staff up-to-date
on the latest in-vehicle experiences
• Design demos that enable drivers to experience the benefits of
hands-free productivity
12
Microsoft Spotlight
Innovation In Action
Car manufacturer BMW partnered with Microsoft to bring personal
travel assistance into the vehicle with its digital mobility service,
BMW Connected. More than an app, the platform is able to alert
people of the driver’s arrival time, tell them when to leave for an
appointment, check traffic and find available parking spots. Powered
by Open Mobility Cloud using Microsoft Azure, BMW Connected
ingests large amounts of data from various sources, and can
seamlessly add destinations from a driver’s contacts, messages or
apps to process in real-time, creating an experience from learned
habits. This new suite of digital services and automated driving and
assistance acts as a foundation for BMW to build out future services.
bit.ly/1U2qObz
Powering Transformation
Intelligent Personal Assistance via Microsoft Office 365
Productivity Suite enables drivers to access email, Skype, or
calendar when parked or on the road with autonomous vehicles.
Data Processing and Machine Learning via Cortana Intelligence
help manufacturers and dealers to manage all of their on-premise
and cloud data (from websites, apps and devices) to get closer to
their customers, understanding their behaviors and predicting their
needs through interactions with natural user interfaces.
Preconfigured Solutions via Cortana Analytics power
recommendations and forecasting for a hands-free, productive
and frictionless ride.
THE FUTURE OF AUTOMOTIVE
 Powering The Vehicle With
Connected Service Operations
The integration of smart vehicles onto the roads today creates
efficiencies for all car owners, allowing drivers to experience greater
comfort, improved usage and more personalized rides overtime.
In harnessing data aggregated across mobile platforms, car
manufacturers and dealers are able to securely monitor automation
in real-time and provide detailed maintenance. Customers receive
responsive and pro-active car service that is non-intrusive, respects
customer privacy and data, and improves safety and performance.
Cloud-connectivity enables OEMs to offer unprecedented levels of
customer service over the lifetime of vehicle ownership, allowing
important software updates to be sent to the car remotely, or minor
maintenance issues to be handled before they become larger
problems. Remote diagnostics can prompt direct over-the-air updates,
troubleshoot potential issues from any location, and enable quick
scheduling of service appointments, allowing owners to step back
from the day-to-day management of their vehicles.
Trends Driving This:
• Personal Assistant • Orchestrated Automation
• Self-Aware Analysis
13
Highlighting The Opportunity
“Every company will need to be a digital company
shifting from delivering standalone products
to products-as-a-service powered by a new
generation of Intelligent Cloud services.
Industries like automotive, manufacturing,
connected home and public sector are leading
this digital transformation.”
Kevin Dallas, Corporate Vice President,
IoT Business Development, Microsoft
68% of consumers want the ability to see vehicle
diagnosis and their car’s maintenance needs.
Consumers and the Connected Car, Spireon,
February 2016
The connected-car market is growing at a five-year
compound annual growth rate of 45%—10 times
as fast as the overall car market. It is expected
that 75% of the estimated 92 million cars shipped
globally in 2020 will be built with internet-
connection hardware.
Business Insider, February 2015
93% of Chinese customers are willing to share
their location data with the manufacturer of
their car, along with 72% of Americans and
65% of Germans.
McKinsey & Co, March 2016
THE FUTURE OF AUTOMOTIVE
 Powering The Vehicle With 2 Adrian sends a prompted voice memo through the car company’s app to
let the respective drivers know there is a problem being investigated and
Connected Service Operations they will receive a follow-up if it cannot be resolved remotely. The app
leverages the company’s Office Graph to find content associated with
the problem and suggests he share a relevant video tutorial with warning
Scenario Two: Over-The-Air Updates And Remote Diagnostics signs to be aware of and action steps to take if related problems arise.
Add New Levels Of Preventative Maintenance

Adrian, 37, works as a customer service representative for an OEM

where he taps into a secure cloud environment to monitor and
oversee the information and activity of all the connected vehicles in
his area. His responsibility is to help owners manage their vehicles
and schedule maintenance with local dealers to ensure each vehicle
is kept in ideal working condition. Adrian’s day includes reviewing
real-time status updates, managing unplanned issues as they arise,
and contacting car owners and lessees via their local dealerships with
custom offers based on their driving habits and history.
3 Adrian follows up with a notification from earlier in the week. Sam,
a 19-year-old student, has opted into a driver behavior monitoring
program to qualify for an insurance promotion. Adrian needs to
push a security update to Sam’s vehicle to enable this feature.

4 Adrian uses the company’s customer service app to contact Sam,

letting him know about a remote update that will activate additional
car sensors, which will track how well Sam drives. He tells Sam
that after three months of collecting data that will be privately
and securely stored in a trusted cloud system owned by Adrian’s
company, he can share the information with Sam’s insurance provider
to receive a reduced premium.

5 Sam confirms the update and Adrian sends over a brief customer service
feedback form, which Sam responds to from his car dashboard using a
few finger gestures. The feedback is shared to an online database that
flows into the company’s data pool, allowing its machine learning system
to fine tune new business offers
for students in the future.

At the start of the work day, Adrian arrives to his office at the OEM and 1
logins into the service dashboard on his tablet using his voice-activated
password to check for any important vehicle notifications and incoming
customer alerts. A red warning lets him know that two check-engine
lights have been activated in customer vehicles.

14 THE FUTURE OF AUTOMOTIVE

 During his time between appointments, Adrian monitors the automated 6
braking system of 50 cars in the fleet with his dashboard application. The
OEM’s machine learning system has detected anomalies in this set of
vehicles. He explores variables such as the speed at which drivers push
them and how weather conditions impact how hard and when they are
employed. He plans to use this safeguarded data to determine if there is
a systemic problem with the braking system, which would require further
analysis of all vehicles equipped with the same system.

While working on this project, Adrian receives an urgent alert from 7

Jasmine, a car lessee, whose critical warning light turned on after
arriving at her office. Adrian notifies a mechanic who is able to run
remote diagnostics and realizes it’s a bad oxygen sensor. With the
help of Bing Knowledge Graph, the mechanic is able to look up the
reference for fixing the sensor associated with the model of Jasmine’s
car and recommend a replacement. Adrian enters the information into
the app, which works with Jasmine’s personal assistant to schedule
the maintenance visit.

Adrian cross-references the driver’s calendar from his infotainment 8

system and suggests a time in the next hour to have a courtesy car
sent out to her from a local dealership.

A notification lets Jasmine know a new car is waiting outside of

her office and a virtual key is sent through the app to access the
9
vehicle. When she walks outside, the car is parked in her typical
spot and has been personalized with the appropriate settings to feel
like her own vehicle.

15 THE FUTURE OF AUTOMOTIVE

 Powering The Vehicle With
Connected Service Operations
What This Means For The Automotive Sector
Manufacturers | OEMS
• Leverage customer feedback to deliver improved comfort and
longevity of products
• Design smarter products and effective telematics services through
access to real-time customer insights
• Access data from autonomous ecosystems to increase lean production,
and decrease defects and maintenance operation costs
• Consider trends to develop more flexible, productive and effective
technical service guidance for teams
Dealers
• Empower suppliers and manufacturing teams to make cost
effective decisions with the customer in mind
• Access shared network of parts and systems in real-time to provide
remote technical service, and avoid recalls and malfunction
• Develop improved customer support through vehicles with
direct communication to mechanics and service repair technicians
when issues arise
• Leverage new business channels to provide faster access to
travel-related support, including future and immediate support for
collision repair, accident circumnavigation, troubleshooting,
parking and more
16
Microsoft Spotlight
Innovation In Action
Toyota has strategically partnered with Microsoft to provide
connected vehicle experiences aimed at understanding and
supporting drivers without overwhelming them by technology.
Toyota Connected, powered by Microsoft’s Azure cloud platform,
will employ telematics, advanced data analytics and network security
systems on the backend. Toyota will analyze collected data to develop
new products for customers, manufacturers and dealers, including
new capabilities to provide real-time updates to moving vehicles.
In studying such on-road patterns, Toyota aims to deliver more
humanized, intuitive and safe driving experiences.
bit.ly/1W4ByfC
Powering Transformation
Manufacturing enhanced by Cortana Intelligence helps to create
a smarter factory with predictive and proactive maintenance, addressing
problems before they arise. Service teams can capture and analyze data
across their fleets to set up a maintenance schedule, eliminating operational
downtime and costs, while delivering an improved customer experience.
Insights via Microsoft Power BI enable technical support teams to
detect issues, track usage and diagnose crashes on mobile and
web apps, allowing them to continually improve direct communication
channels between customers.
Service via Dynamics CRM provides service technicians with complete
customer insight, real-time guidance, rich media knowledge and
cross-team collaboration - all through any mobile device. Capture and
publish content from subject matter experts, social channels and service
interactions. With service intelligence, anticipate opportunities and gain
insights into customer behavior and agent productivity.
Connected Cars via Azure IoT Suite stream telemetry data to the
Cortana Intelligence Suite to detect anomalies in real time, helping to
predict and prevent incidents.
THE FUTURE OF AUTOMOTIVE
 Spotlight:
Microsoft X IAV
The Road To The Connected, Autonomous Vehicle

Mobility engineering company IAV collaborated with technology provider
Microsoft at CES 2016 to demonstrate new productivity features for
highly automated vehicles. The partnership between the service provider
and technology company is aimed at bringing software solutions to the
mobility industry, including worldwide OEMS. Together, IAV and Microsoft
are exploring the ways cloud connected vehicle systems, automated
driving capabilities, real-time data analytics and artificially intelligent
assistants can combine to increase road safety and driver productivity.
To imagine the advantages of connectivity and automation for traffic
safety, IAV and Microsoft created a scenario in which a pedestrian
with a wearable device automatically sends predictive alerts to an
approaching vehicle. Leveraging autonomous driving features, the
vehicle is able to detect people, even those hidden from view, and
adjust to avoid an accident. Powering these solutions are the Microsoft
Azure IoT Suite and Microsoft’s Band, designed to gather and transfer
vast amounts of data in autonomous driving sensors, including traffic
lights and dynamic mapping systems.
“We see Microsoft as providers of IT infrastructure for car makers. From
Microsoft’s cloud connectivity services, we are creating flexible and
powerful experiences. This is something in the automotive world we
have absolutely high requirements for. If we are looking to security
in terms of data, this is something we see from Microsoft to be an
incredibly powerful product.”
Karsten Schulze, SVP for Active Safety and Driver Assistance, IAV
instance, can take advantage of these new opportunities to maximize
time spent in the car to accomplish tasks, increasing out-of-vehicle
personal or family time.
“Being able to communicate with the cloud to enable more
functionality, and higher safety in the vehicle is at the core of the
Cortana integration. Billions of people use Windows today and
Cortana is a well-established tool that is available on a large number
of platforms worldwide. We see this as a step toward a general
productivity tool. It makes more sense to have Cortana available as
you’re driving, or as you’re sitting at the wheel while your automated
vehicle is driving.”
John Cooper, Business Development Director of Connected and
Automated Driving, IAV
Currently, IAV and Microsoft are exploring and discussing other
significant ways that they can progress in bringing greater advantages
to the car when it’s working in highly autonomous mode. “The key
point is the high reliability in which Microsoft tools provide,” said IAV’s
Business Development Director John Cooper. “We look for the highest
reliability [in our partnerships].”

These same technologies also power next-generation productivity

features inside the automated vehicle. With billions of people using
Windows today, IAV adopted Microsoft’s Cortana software as an avenue
for delivering greater mobility to drivers. A driver or passenger can sync
their personal data with the vehicle through a cloud connected device,
and access productivity apps like Skype for Business or Calendar from
the car’s dashboard. Drivers stuck in traffic or on long distance trips, for

17 THE FUTURE OF AUTOMOTIVE

 The Rise Of Flexible
Mobility Services
Due to high costs and logistical issues, single vehicle ownership
doesn’t make sense for many urban residents. In the absence of a
connected vehicle and support ecosystem, sharing a car throughout
the week has been too complicated for many to consider. Mobile
services, sensor-enabled vehicles and access to a secure cloud
infrastructure now help split the time and costs of ownership, while
ensuring multiple owners enjoy a uniquely personal experience.
Trends Driving This:
• Personal Assistant • Mobile Hub
• Orchestrated Automation
18
Highlighting The Opportunity
“By 2020, 10% of today’s vehicle owners in mature markets
will give up vehicle ownership for on-demand access.”
Thilo Koslowski, Vice President and Founder,
Gartner’s Automotive Practices
“There’s going to be a mass of data that becomes available
once you’ve got this computing power and once you’ve got
this connection. Consumers need to trust that that data is
going to be handled in a responsible way.”
Don Butler, Executive Director of Connected Vehicle and Services, Ford
The average American household spends more than
$8,500 every year to own and operate a vehicle, and often,
say for commuting purposes, those cars are being used
by just one person.
AAA, April 2015
By combining ride sharing with car sharing, MIT research
has shown that it would be possible to take every passenger
to his or her destination at the time they need to be there,
with 80% fewer cars.
McKinsey, August 2015
In 2021, the North American urban population is expected to
reach 50 million: 31 million people will be licensed drivers, of
whom 6 million will be registered users of a car-sharing service.
All of the patrons of car-sharing services will generate
global revenues of €4.7 billion in 2021, with the bulk of
revenues—€3.2 billion—coming from light users who need
a car only for occasional trips.
BCG Perspectives, February 2016
THE FUTURE OF AUTOMOTIVE
 2
The Rise Of Flexible Since Dan has chosen the pay-
as-you-go option, he also uses
an on-demand insurance service,
Mobility Services which allows him to purchase an
hourly, daily or weekly insurance
plan. He taps the daily button,
Scenario Three: Urban Residents Share Access, adding a small charge to his
Time And Cost Of Localized Car Fleet automatic monthly payment. The
others have signed up for a low
cost annual insurance as part of
Dan, 24, Layla, 43, and Mei, 29, are residents in Brooklyn who take the subscription, and are charged
advantage of a car-sharing service to supplement the public transit and based on driver behavior.
biking they use to go about their daily routines. By joining a network run
by a car manufacturer, they get access to a mixed fleet of vehicles from
EVs to SUVs. Available as both a subscription and pay-as-you-go model,
the service gives them an alternative to owning a vehicle with more
options based on their budget, location and needs.
3 On Saturday morning, Layla asks her
home’s personal assistant to provide
her with a status update of the vehicle
Now they have the freedom to run errands and take trips out of the city she has reserved. The system tells her
while only paying based on the mileage and amount of time they use the car is fully charged and parked at
the vehicle. As the weekend approaches, they each have plans to use the public charging station one block
from her house.
a car. Dan is going surfing with friends near Fire Island, Layla is doing a
large grocery run, and Mei is helping to move her cousin into her new
apartment in Flushing.

On Friday, each person pulls up the car-sharing 1

app to check the availability of vehicles to plan
their trips. Layla finds an electric vehicle available
for her grocery trip, Mei reserves a van that’s big
enough for hauling furniture and Dan looks for an
SUV to transport a group of friends out of the city.

4 At checkout, Layla receives a

reminder on her phone that the car
is scheduled to be picked up by
another member in half an hour. She
is also notified that her ETA home
based on current traffic conditions is
40 minutes. She sends a prompted
message through the app that
she will be dropping the car off 15
minutes late, which is approved.

19 THE FUTURE OF AUTOMOTIVE

 Across town, Mei uses her digital key to
unlock the van she has booked. The vehicle
immediately recognizes her as the driver,
adjusting the seat and mirror height. Her
favorite apps on the infotainment system pop
up, automatically transferring her preferences
for music and news to the vehicle.
5 7 After hours of packing and
unpacking, Mei is exhausted.
She sets the car to autonomous
cruise control, helping her
maintain a safe distance between
her vehicle and the other cars
on the road as she drives
home after a long day.

8 As each of the drivers returns

their respective vehicle, an alert
is automatically sent to the car
manufacturer providing a status
update on the usage, condition and
performance of every vehicle.

A windshield overlay pulls up turn-by-turn directions to her cousin’s 6 9 Based on the data reported,
apartment and a smaller map with real-time traffic data is visible in the Dan, Layla and Mei each receive
center console. As she nears her destination, the dashboard shows her all a personalized notification on
of the closest available parking spots. Mei uses voice commands to filter their phones, detailing the total
for the loading zones on her cousin’s street since they will be packing up mileage, time and costs
the van with furniture and boxes. associated with each of their trips.

20
 The Rise Of Flexible
Mobility Services
What This Means For The Automotive Sector
Manufacturers | OEMS
• Consider new business models with flexible mobility service offerings
• Provide access to vehicles on an as-needed basis to gain insights
into potential customers
• Engage and deliver adaptive content specific to connected
consumer experiences
Dealers
• Use analytics related to trips including distance, driver behavior and
vehicle condition to create value and personalized offerings
• Leverage insights from context around consumers and their needs to
provide relevant products, services, and offers
• Deliver intelligent, engaging and personalized experiences that align
with customers’ on-demand and always-on lifestyles
• Leverage captured data and act on insights to provide value offerings
at every stage of the customer experience
21
Microsoft Spotlight
Innovation In Action
Automobile Manufacturer Nissan partnered with Microsoft to create
new ways for drivers to interact with their vehicles through in-vehicle
mobility solutions. All Nissan LEAF models and Infiniti models in
Europe with the Connect Telematics System (CTS) are powered by
Microsoft’s Azure Cloud Platforms to connect each vehicle to its
owner, as well as to infrastructure around it. The remote connection
allows customers to access maps, range prediction and charging
station availability, while also performing a variety of mobile functions
from outside the car. Drivers can manage hands-free messaging and
send over-the-air updates, enhancing driver safety.
bit.ly/1YFYFuV
Powering Transformation
Azure App Services, IoT Suite, and Cortana Intelligence helps
developers dynamically build a customer-facing app and scale
performance as app users grow exponentially. With a robust app to
monitor and service potential millions of customers, dealers are able
to develop communication portals, enhance mobility services and
strengthen digital security.
Data Platform and Machine Learning through Cortana Intelligence
help manufacturers and dealers manage all of their on-premise and
cloud data to get closer to their customers, understanding their
behaviors and predicting their needs through interactions with natural
user interfaces.
Cognitive Services via Cortana Intelligence power recommendations
and forecasting enabling OEMs to develop hands-free, productive and
frictionless ride.
THE FUTURE OF AUTOMOTIVE
 The Future Of Automated
Safety And Security
Highlighting The Opportunity
With a new suite of hands-free and automated driving capabilities in the
vehicle, connected cars are creating safer roads for drivers, passengers
and pedestrians. Through telemetry and real-time feedback, vehicles
are able to anticipate unsafe weather conditions, detect pedestrians
via wearables, and communicate with nearby infrastructure to help
predict and prevent incidents. With safety at the forefront of the car
owning experience, this connected infrastructure is giving drivers
confidence that their vehicle will act as a warning system and take over
if necessary, always ensuring a safe and relaxing journey.
Trends Driving This:
• Biometric Adjustments • Conversational Intelligence
• Contextual Responsiveness • Augmented Dashboards
22
“We believe some of the technologies currently being used in
aerospace and medicine could help improve road safety and
enhance the driving experience. These research projects are
investigating how we could exploit this for the benefit of our
customers and other road users.”
Wolfgang Epple, Research and Technology Director, Jaguar
“Motor vehicle crashes cost the U.S. $910 billion, or $4,000
per vehicle each year. Advanced driver assistance systems
available today could reduce this cost by around 30 percent
and reduce fatalities by one-third.”
Xavier Mosquet, Senior Partner & Managing Director, Boston
Consulting Group
90% of crashes are caused by human error.
The Insurance Institute for Highway Safety (IIHS) has seen
a 7% reduction in crashes for vehicles with a basic forward-
collision warning system, and a 14 to 15% reduction for those
with automatic braking.
Consumer Reports, February 2014
51% of consumers want safety and security features in a
connected car over other features
Consumers and the Connected Car, Spireon, February 2016
ADAS could prevent 28% of all crashes in the United States
if new-car buyers invested in the most common currently
available ADAS features. The technologies could prevent
approximately 9,900 fatalities and save about $251 billion
each year.
BCG, September 2015
THE FUTURE OF AUTOMOTIVE
 The Future Of Automated
Safety And Security
Scenario Four: The Family Vacation Powered
By Assisted Driving

The Park family is taking a road trip to explore

Colorado outside of their home in Denver. Louis, 38,
and Sue, 40, planned to take a long weekend trip
with their kids, Mindy, 4, and Daryl, 7. Researching
the weather ahead of time, they anticipate
encountering some bad weather during the first
day of travel. Though they are looking forward to an
adventure, it’s important to both parents that their
vehicle comes with assisted driving features for an
added layer of safety and security.

While the family piles into the car, Louis uploads the notes and
itinerary for the trip into the vehicle’s infotainment system. Based on
real-time weather information and road conditions being reported
by other connected vehicles on the road, the safest route is beamed
onto the vehicle’s dashboard.
1 2 After traveling for a few hours along the highway the kids start to
get restless and begin bickering with each other in the backseat.
3 Louis is starting to get distracted from all of the commotion, and Sue
decides the whole family could use a little break. She uses
a quick voice command to ask the GPS for a list of nearby family-
friendly tourist landmarks.

4 After choosing a nature reserve, the GPS routes the Park family onto
a scenic roadway called Rimrock Drive. As they pass by landmarks, the
in-vehicle assistant provides highlights of what they’re seeing outside
the window. Louis activates self-driving mode and takes his hands off
of the wheel so he is able to relax and take in the scene with the rest of
the family without having to worry about oncoming traffic.

23 THE FUTURE OF AUTOMOTIVE

 The views are beautiful, but the road begins to become quite 5
windy. The assistant ends its narration and the dashboard lights
up with 360-degree views of the upcoming curves so Louis can
see a detailed picture of what’s directly ahead of him, along with
recommended driving speeds.

As Louis starts to take a sharp turn around a blind curve, 6

a vibration on the pedal indicates that there is another vehicle
approaching from the other direction. Since both vehicles
broadcast their position, speed and brake status within 500
feet of one another, the other driver also receives an alert to be
aware of oncoming traffic. They maintain a safe speed as they
pass one another.

8 Once they park with a view of a beautiful overlook, the family enlists the
car to help to capture the moment. They pose outside of the vehicle,
and a wide-angle camera above the windshield takes a series of ten
photos. The pictures automatically upload to the family’s shared digital
travel album so that Grandma can follow along.

9 Later that evening after a long day of travel and sightseeing, the vehicle
detects raindrops falling outside of the car. Inside, sensors embedded
within the steering wheel detect Louis’ heart rate and breathing has
slowed, a sign of fading attention. It sends Louis a warning by illuminating
the driver’s side with a flashing light, and suggesting nearby hotels with
vacancies where he and the family can stop for the night.

When they arrive at the nature reserve, the vehicle actively senses 7
the presence of pedestrians in the parking lot by communicating
with any wearable or mobile device they are using, ready to take
over should an accident be imminent. As he parks, the car detects
a group of teenagers who are about to run into his blind spot and
quickly takes over in autonomous driving mode to stop him from
veering too close.
24
 The Future Of Automated
Safety And Security
What This Means For The Automotive Sector
Manufacturers | OEMS
• Consider what interfaces will be best suited to a safe and
productive in-vehicle experience
• Leverage information sharing and market data to design
smarter systems that react to safety or performance accidents
• Capture real-time data to inform automated driving assistance
for factors such as environment, weather, traffic and parking
• Consider the security systems required to enable customers to safely
and easily share their data with other people, vehicles, stores, etc.
Dealers
• Use cloud-based systems and intelligent devices to deliver
personalized consumer experiences from anywhere
• Address new customer behaviors in future designs to increase market
relevance based on customer feedback, usage and insights
25
Microsoft Spotlight
Innovation In Action
Engineering company IAV partnered with Microsoft to demonstrate
highly automated driving capabilities enabled by vehicle-to-vehicle,
vehicle-to-infrastructure and vehicle-to-pedestrian communication.
The V2X connectivity powered by the Microsoft Azure Cloud and
Windows 10 leverages a vehicle’s surrounding data to anticipate and
prevent potential accidents. In this collaboration, connected vehicles
are able to transfer information from their environments to inform
communication, mitigate hazards and enhance safety.
bit.ly/1qwNzgd
Powering Transformation
Data Analytics and Machine Learning via Cortana Intelligence
allows manufacturers to leverage and processes cloud data to
inform new automated driving services, enhancing driver and
passenger safety.
Cognitive Services via Cortana Intelligence allows car dealers
to access cloud-based analytics to predict driver trends and
behaviors, helping to inform new systems for safety and security
based on market data.
Stream Analytics via Azure IoT Suite processes real-time data
from millions of IoT devices, enabling sensors, remote devices
and systems to connect to one another and create a new
network for communication.
Cognitive Services via Cortana Intelligence provide the
building blocks for vision and speech capabilities, language
understanding and knowledge services that can be integrated
into applications and systems for mobile devices and vehicles.
THE FUTURE OF AUTOMOTIVE
 Spotlight:
Microsoft X Volvo
Digitizing The Next Generation Car Buying
Experience And Beyond
As a way to offer potential car buyers an entirely new way to shop
for vehicles, Volvo Car Group partnered with Microsoft to leverage its
HoloLens technology to create a first-of-its-kind mixed reality showroom
experience. This forward-looking approach blends digitalization with the
physical touch of the real world to give shoppers unprecedented levels
of customization and control. Customers interact with life-size holograms
of a Volvo vehicle to explore features or change color overlays with a
simple ‘air tap’ gesture, allowing them to personalize their virtual car in
the context of the real-world environment.
“We have used HoloLens technology to explore the capability of
our products in a new way. We’ve also been able to outline what
our future retail and customer experience could look like.”
Klas Bendrik, SVP and Group CIO, Volvo Car Group
As the partnership evolves, Volvo will look to leverage Microsoft’s
cloud-based services, machine learning and data capabilities to drive
customer value in an entirely new way. According to SVP and Group
CIO, Klas Bendrik, driving the partnership forward are consumer trends
and expectations around the autonomous vehicle, electrification, fully-
integrated connectivity and the sharing economy.
According to Bendrik, the impact of digitization on Volvo, and the
automotive industry, can be categorized in three key ways:
the connected product and customer, end-user productivity and
productivity in the manufacturing value chain. As Volvo races toward
developing autonomous vehicles and delivering future-looking service
experiences, its relationship with Microsoft has expanded to forward-
looking strategies that touch all three domains.
26
“The main focus of our partnership is to jointly explore new opportunities
that will be relevant both for our customer and for our products in the future
of the industry. In the connected world, it becomes of high interest to see
how sensors, machine learning and various types of cloud solutions are
actually relevant for the customer. It makes sense not only for the sake of
technology, but for the sake of experience and what it can do for people.”
Klas Bendrik, SVP and Group CIO, Volvo Car Group
As the software industry and automotive industry bring different expectations
and backgrounds into one conversation, “you get very fruitful and interesting
opportunities for innovation, services and types of capabilities that haven’t
been thought of,” said Bendrik. Continuing to innovate remains high on
Volvo’s list, with an aim to use technology to bring new functions to its global
operations and make its employees much more productive, connecting
factories, market companies and R&D teams in hubs around the world.
“Navigating the digital landscape can be daunting.
But if you have trusted and collaborative partners
to help you forge your path, it can create incredible
opportunities. Ultimately, it’s about giving
businesses the tools and confidence they need to
turn disruption from a threat into an opportunity.”
Peggy Johnson, Executive Vice President,
Business Development, Microsoft
THE FUTURE OF AUTOMOTIVE
 The Connected
Dealership
Highlighting The Opportunity
The process of researching the make, model and add-on features before
buying a car can feel daunting and burdensome for potential car buyers.
Today, many users are choosing to lease cars and renew their vehicle at
the end, or explore options based on upgrades and performance.
Individuals who are looking to test new models and in-vehicle mobility
solutions rely on knowledgeable customer service representatives to
guide them through the decision-making process. The emergence of new,
connected technologies and experiences now enable dealers to offer
interactive, virtual and social support to customers both before and after
a sale, creating more confidence and fostering better relationships.
Trends Driving This:
• Personal Assistant • Mobile Hub
• Conversational Intelligence
27
“Imagine using mixed reality to choose the type of car you
want–to explore the colors, rims, or get a better understanding
of the features, services and options available.”
Björn Annwall, Senior Vice President, Marketing Sales and Service,
Volvo Car Group
Driver Assistance Systems will generate over
$60 billion in 2020.
Connected car hardware and software will bring in
$152 billion in 2020.
Business Insider, February 2015
It’s a large growing market full of infotainment, apps designed
for cars, digital diagnostics, monitoring services for new drivers
and enhanced navigation systems among other services, which
is estimated to grow to nearly $270 billion by 2020.
BCG, September 2015
THE FUTURE OF AUTOMOTIVE
 The Connected
Dealership
Scenario Five: Connected Dealership Customer Experience

Ellen, 34, is nearing the end of the two-year lease on her SUV. Ellen has
owned a vehicle in the past, but now prefers shorter-term commitments
because she likes to stay up on new features and integrations as they
become available. She also actively seeks to avoid the up-front costs
that come with buying a car. As she considers renewal options, Ellen is in
contact with her car dealer, Ivan, 37, who informs her about a variety of
digital car research apps and services that empower consumers like Ellen
with knowledge and tailored advice to help them make the right decision.

3 Ellen shares feedback in a quick voice memo, agreeing to features like

active haptic feedback and automated lane changes on freeways. From
this information, Ivan is able to streamline a few leasing packages and
deliver a new set of premiums for Ellen to browse.

Three months before her lease ends, Ellen receives a notification from 1 4 Ivan sends Ellen a link to an in-app community platform in case she
wants to chat with a community of like-minded drivers for an unbiased
Ivan through her car’s mobility app, alerting her of the status of her
opinion about the newer models and integrations he has suggested.
contract. He suggests top options for new makes and models based on
After chatting with another car lessee as well as a car owner, she picks
historical data collected across mobile and in-vehicle systems throughout
two models and schedules a virtual test drive for the next morning.
the duration of her two-year lease that tracks her driving habits.

Ivan matches this information against behavioral patterns identified in 2

her demographic to further develop his recommendations. Seeing that
Ellen is a driver who likes to multi-task, frequently rides with friends
and makes calls from the road, Ivan presents a number of customized
upgrade options for autopilot and safety functionality.
28 THE FUTURE OF AUTOMOTIVE
 8 Ivan sends times through the app for her to test drive the new,
automated car she has selected. Ellen agrees to 12 PM the following
day and walks outside to find the vehicle parked in front of her house.
She unlocks it using her virtual key and slides into the driver’s seat.
Preprogrammed from her previous lease, the steering wheel and
headrest adjusts to her height and the stereo pairs with her phone
to continue where she left off in a podcast.

9 24-hours later, an alert for a voice memo from Ivan beams onto the
dashboard. He asks her if she’d like to keep the car and she signs off
and schedules a time for her old vehicle to be picked up by a customer
service rep. Ivan shares an augmented owner’s manual, which
downloads across her devices so she can always reference basic
‘set-up’ and informational tutorials.

Ivan asks Ellen to participate in a quick customer service feedback

10 survey, which will help to guide after-sales alerts, customized offers
and more personalized customer care.

At 10 AM the following day, Ellen opens up a customer-facing app to 5

find that she has been sent a VR demo using Microsoft’s HoloLens
technology. She is matched with an expert based on an algorithmic
pairing of her interests and their knowledge base. She sits in her living
room chair, commanding her connected living room to stream the
images shared within the app as a 3D display.

Virtually, she explores every in-car feature and its price with the expert 6
available via voice chat to answer all of her questions. She uses hand
gestures to select the in-car experiences she enjoys, as well as to
delete the ones she isn’t interested in having. She approves a heads-up
active window display capable of highlighting upcoming turns in vibrant
images, and active health monitoring that can track her vital stats
through steering wheel sensors.

At the end of the demo, the expert sends Ellen a quick follow-up review
of the different add-ons and extras requested for her new vehicle, as 7
well as a handful of options identified as relevant for people with similar
driving habits. Ellen agrees to two more add-ons that grant her access
to the mobile office and mobility management for more fuel-efficient
driving after looking over a breakdown of payment for each. The expert
pings Ivan with this information.

29 THE FUTURE OF AUTOMOTIVE

 The Connected
Dealership
What This Means For The Automotive Sector
Manufacturers | OEMS
• Address new customer behaviors in future designs to increase market
relevance based on customer feedback, usage and insights
• Leverage real-time customer insights to increase agility, and reduce
time and cost in responding to new business needs
• Consider customer input into product and service development to
build a stronger manufacturing pipeline
• Access informational portals across digital engagements to increase
value, revenue and profits on new products
Dealers
• Leverage mobile knowledge to see how products are used for sales,
marketing and staffing insights
• Develop dynamic training tools that keep sales staff up-to-date on the
latest in-vehicle experiences
• Create customized offers and sales opportunities based on usage and
market insights to deliver delight throughout the shopper experience
30
Microsoft Spotlight
Innovation In Action
Volvo Cars teamed up with Microsoft to deliver a high-tech
experience for car buying from information seeking to
customization. The car manufacturer became the first automotive
company to work with Microsoft HoloLens and deliver 3D,
holographic experiences for customers to test out Volvo cars
and features as an interactive experience. Leveraging Microsoft
HoloLens technology, drivers can explore the various vehicles,
features and customizable add-ons, as well as move, shape and
pin them in the context of the real world environment.
bit.ly/20br9gx
Powering Transformation
Machine Learning via Cortana Intelligence enables manufacturers
to capture customer data in order to predict issues and design better
mobility solutions.
Predictive and Perceptual Intelligence via Cortana Intelligence helps
dealers better infer customer needs and behavior, gain insights and
create more meaningful customer experiences at a reduced cost.
SQL Database via Cortana Intelligence helps developers dynamically
build a customer-facing app and scale performance as app users grow
exponentially. With a robust app to monitor and service potential millions
of customers, dealers are able to develop communication portals,
enhance mobility services and strengthen digital security.
Conversation Platform and Bot Framework gives customers the ability
to access human intelligent sales assistants on the web and through
chat systems including Skype, Facebook, WeChat and more.
Dynamics CRM powers customer sales and relationship management,
helping companies deliver exceptional customer experiences and
creating long-term relationships based on knowledge and trust. The
platform helps businesses develop leads, nurture contacts, track sales,
and keep customers happy.
THE FUTURE OF AUTOMOTIVE
 Top 5 Technologies
Shaping Automotive
The concept of automation and intelligent assistance have
captured consumers imagination for almost a decade, and Vehicular Communication Systems are
looking at five scenarios driving mobility in the near-future, it is networking vehicles together and facilitating a new range
evident the bridge between concept and reality has dissipated. of interactions between vehicle and infrastructure, and
This connected landscape, a new paradigm for automotive, cloud and individual, significantly easing road accidents
suggests a transformation for businesses who make and and traffic congestions.
sell products to service full mobility needs. The five leading
technologies identified below are driving new service and sales
opportunities for manufacturers, OEMS and dealers throughout
the entire value chain, though their implications will expand far
beyond that of transportation, shaping the future in which we Machine Learning is enhancing the overall
in-vehicle driver experience by enabling intelligent
build and navigate our cities.
interactions between car, driver and environment, offering
smart assistance and creating a more personalized ride
with user-specific recommendations.

Advanced Driver Assistance Systems

enabled by sensor technologies are automating and
enhancing the driver experience by creating new
safeguards that will alert the driver to potential problems,
increasing car and road safety.

In-Vehicle Assistance powered by automated

systems is engendering more seamless and productive
experiences, helping drivers to be more effective in their
lives at home and at work.
Cloud Connectivity has opened up portals for data
collection, analytics and compute power at a global scale,
creating new types of applications that leverage individual
customer and market information to deliver new services
and imagine new business models.

31 THE FUTURE OF AUTOMOTIVE

 About PSFK About Microsoft

PSFK is the world’s leading provider of innovation insights. Microsoft (Nasdaq “MSFT” @microsoft) is the leading
Since 2004, we have offered the tools, content and advice to platform and productivity company for the mobile-first,
inspire creative professionals to make better products, cloud-first world, and its mission is to empower every person
services and experiences. and every organization on the planet to achieve more.

Our daily business intelligence portal and newsletters help J.D. Meier
members find and track new ideas that they can use in their work. Director, Business Programs,
Our reports provide insights into trends driving creative business Microsoft Consulting Services
and our audiences access thought leadership from pioneers at our
Sanjay Ravi
events. PSFK Labs, our consulting service, provide corporations
Worldwide Managing Director of Manufacturing
with trends-led strategy, concepting, content and delivery.
Rohit Bhargava
Piers Fawkes
Director, Tech Strategy
President & Founder
piers@psfk.com Chris Harries
Director, Business Development
Scott Lachut
President of Research & Strategy Steve Sweetman
scott@psfk.com Director, Office of the CTO

Project Lead Aimee Riordan

Simone Spilka Communications Manager,
Corporate Communications
Design PSFK LABS
Lance Green 42 Bond Street, 6th Floor,
Sarah Lee New York, NY 10012 USA
psfk.com | labs.psfk.com | @psfk

All rights reserved.

No parts of this publication may
be reproduced without the written
permission of PSFK Labs.

Version 1 | Published 2016

32 THE FUTURE OF AUTOMOTIVE