FOCUS 11
Furthermore, cars will soon send details of a fault electronically to the car manufacturer. It could reply, and sell an electronic ‘fi x’, book a repair appointment at the local dealer or send a mechanic to the home of the owner to carry out the necessary repairs. The opportunities for car manufacturers are potentially huge.
But of course, risks accompany these opportunities. Semi-autonomous car crashes pose large reputational risks for manufacturers and shift the legal liability, particularly as the wireless car will capture additional data to analyse the cause of the crash in detail. Furthermore wireless cars will run a cyber-security threat – from personal data being stolen to vehicle control being ceded to a third party.
Change on this scale, complexity and pace lends itself to the creation of signifi cant joint ventures and partnerships. Car manufacturers will need to work collaboratively with insurers, communications and technology companies to realise their ambitions and those of their customers.
For example, while manufacturers could potentially develop and own their M2M technology, a relevant precedent, and cautionary tale, is in-car satellite navigation systems. Car manufacturers initially developed their own products but lost out to companies such as TomTom, in part because the technology evolved so quickly and its price fell.
Similarly, emboldened by their new-pay-as-you-drive wealth of customer driver data, car makers could offer their own car insurance policies, but it is likely to be more practical to work with an existing insurer given the associated regulatory burden and insurance infrastructure needed. For example, Volkswagen and Allianz have partnered to do just this.
Cross-sector collaboration also helps to address the cost challenges of developing M2M technology. In-car telematic ‘black boxes’ are more likely to become fi nancially viable for large-scale use, as well as universally accepted, if benefi ts from their installation can be shared and funding comes from interested parties (e.g. automotive, technology, media, telecommunication and insurance sectors).
© 2013 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member fi rm of the KPMG network of independent member fi rms affi liated with KPMG International Cooperative, a Swiss entity. All rights reserved.
CROSS-SECTOR COLLABORATION ALSO HELPS TO ADDRESS THE COST
CHALLENGES OF DEVELOPING M2M TECHNOLOGY.
Financing M2M-led developments is a critical issue today. Most cars are likely to be connected over the next decade. The technology is already available, but the main factor slowing the pace of adoption is the diffi cultly of creating revenue- generating business models which appeal both to developers and drivers.
The most exciting aspect of M2M technology and the connected car is the potential itself. It is no more possible to predict the scale and impact of M2M on the automotive sector and the world’s drivers than it was for internet pioneers to predict how the internet would dictate the winners and losers of today’s global economy. But, regardless of the ultimate destination, the journey will be fascinating.
To fi nd out more, please contact:
John Leech Head of UK Automotive T: +44 (0)121 232 3035 E:
john.leech@kpmg.co.uk
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M2M
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