Ian Kendall –Feb 9, 2017 · 2/9/2017 · Unless we change … adapt, react and innovate!...
Transcript of Ian Kendall –Feb 9, 2017 · 2/9/2017 · Unless we change … adapt, react and innovate!...
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Ian Kendall – Feb 9, 2017
Connected Car Miscellany
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Connected Car Miscellany Ian KendallIan Kendall
Forces pushing on the incumbent automakers
15-Feb-17
Electric powertrain
Autonomousdriving
Ride hailing/sharing
Ubiquitousconnectivity
Disruptive Factors
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Source: Monetizing Car Data, McKinsey & Co, Sept 2016
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Connected Car Miscellany Ian KendallIan Kendall
So, what is the “connected car” ??
315-Feb-17
Mobile wireless communications
Location / position Sensors/actuators
Installed in a car Supported by a data/call centerLinking other devices inc. other cars
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Connected Car Miscellany Ian KendallIan Kendall
Telematics = Connected Car?
415-Feb-17
Has “Connected car” reset the hype curve?
Telematics followed the Hype curve from mid 90s (GPS and GSM converged together)
By 2010s we had reached some sensible/stable commercialization …GM OnStar lives on, Stolen Vehicle Tracking etc
c. 2004 Realization that the revenues promised were unrealistic Today? If so ,why?
What is different?
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Connected Car Miscellany Ian KendallIan Kendall
“We’re a car maker” …
• We make great, stylish cars• They have great engines • They are fun to drive• They have great features• We test them thoroughly• We sell a lot of them • We make good profits• We improve our products every year
And …• We’ve been doing it for 100 years Striving to build better and sell more cars
15-Feb-17 5
The situation today
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Connected Car Miscellany Ian KendallIan Kendall
“We’re a car maker” …
• The hardware is commoditized• Engines replaced by simpler electric drives• People don’t drive themselves any more• Everything I want is on my phone• 3 years to market is too long• Our customers are getting older• Margins are increasingly squeezed• Customers expect upgrades every month
Unfortunately …• We’ve got 10 years left Unless we change … adapt, react and innovate!
15-Feb-17 6
The future
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Connected Car Miscellany Ian KendallIan Kendall
Traditional sources of revenue for Auto OEM
15-Feb-17
• New car sales• Pre-owned cars • Leasing • Insurance• Financial services • Spare parts• Accessories• Branded goods
• Dealer networks: Servicing Maintenance Repairs (warranty is a COST for the OEM!)
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… 66%
… 7%
… 5%
… 4%
… 2%
… 0%
… 9%
… 3%
… 4%
For example 2015 Annual Report
2015, 1st half only … gross revenue $3.63 billion Valuation estimate: $60-70 billion vs market cap $73 billion!
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Connected Car Miscellany Ian KendallIan Kendall
Possible sources of revenue
15-Feb-17
• New car sales• Pre-owned cars• Leasing• Insurance• Financial services• Spare parts • Accessories• Branded goods• Servicing• Maintenance • Repairs (warranty is a COST!)
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• Fuel• Advertising• Rental• Ride sharing• Car sharing• Trip planning / optimization• Selling software functions• Upgrades• Profit share of referrals (retail,
food)• Media content• Licensing• Health/wellbeing
• Parking• Last mile transportation• Experiences• Transportation tailored to need
(vehicle type)• Car washing / detailing• Towing and rescue• Driving skills• Selling data• Package pickup/delivery• Personalization/customization
+ Many more …
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Connected Car Miscellany Ian KendallIan Kendall
The space in which we play: “Smart Infrastructure”
915-Feb-17
Smart City
The IoT
Mesh / low powercommunications
Smartphones
Car as a “thing”
Smart Home
Fleet infrastructure
“Big” data
Connected car
Automation
Fleet data
ServicesPayments
Wide-area, high bandwidth communications
Urbanization(city migration)
Device security
Secured car access point(s)
Online data security
Personal authentication
Fraud protection
Filld-for-Bentley
Audi Traffic Light Information
Individual devices
Hardware
Interoperability
Embedded OS
MBBThe cloud
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Connected Car Miscellany Ian KendallIan Kendall
Making the business case is difficult
1015-Feb-17
• It costs a lot to set up and run the infrastructure for connected car.
• Each service, feature or data package in itself will not generate much revenue
• But take a lot together, and we could infer a positive result is possible.
• However, we cannot implement all at once, but we have to start somewhere Starting with one is hard to justify Service b
Service a
Data package z
Service c
Data package x
Data package y
Service d
Service e
Service f
Data package w
Service g
Service h
Feature 1
Feature 2
Feature 3
InitialInvestment
Running costs
Positive result(if we do a
bundle)
$0 line
Overall commitment
Negative result(if we do just
one)
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Connected Car Miscellany Ian KendallIan Kendall
Organizational challenges
• Connected car has to at least combine the talents of : Electrical/Electronics Engineering IT Aftersales Product Management Research / Pre-development
• Silos!
1115-Feb-17
Car brandCEO
Production
Quality
Procurement
Sales and Marketing
Product Management
Aftersales
HR Engineering
Powertrain
Whole Vehicle
Body and Exterior
Trim and Interior
Electrical and Electronics
Research / Pre-dev’mt
Finance
IT
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Connected Car Miscellany Ian Kendall
Like a jigsaw
15-Feb-17
Normally, when you do a jigsaw you have the box to help guide you to the picture you are building … its satisfying, but easy!
This problem is like a who bunch of pieces where you can’t see the full picture.
But if we find two pieces that fit together, that’s a start
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… but which two pieces?
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Connected Car Miscellany Ian KendallIan Kendall
Pointers …
1315-Feb-17
• Use helpful tool/methods: Design led thinking
o Open up the problem space: “How might we ….?”o If really stuck: “What can we do in the next two weeks which might give us more information?”
Behavior based designo Write User Stories: “As a …, I can …, so that ….”
• Start small• Try things out• Have the right mindset Focus on what we CAN do, rather than why we CAN’T!
• Be prepared to work around what’s there Find a way to sidestep existing systems or processes which are blocking progress
• Find willing partners, and work with them as equals
The hardest thing is figuring out what the problems are with sufficient clarity to be able to see a solution.
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Connected Car Miscellany Ian KendallIan Kendall
Recent successes @ ERL
1415-Feb-17
• Audi TLI: first commercial V2I service Time to Red (now)
o Initially Las Vegas, but many other cities to come
Traffic flow data acquisition at intersections Speed recommendation for green (to come) Red light violation warning/prevention (wip) Dynamic traffic flow optimization (wip)
Piloted driving
• Filld-for-Bentley: first “luxury” connected service “Imagine never having to fill your Bentley again” Car position, fuel level and remote open of gas flap 10 car live customer trial during Q3 2016
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Connected Car Miscellany Ian KendallIan Kendall
Thank you!
1515-Feb-17
Ian KendallVolkswagen of America – Electronics Research Lab
Belmont, [email protected]