Automotive data could be worth $33bn by 2025, says Frost & Sullivan
Data from connected cars could be worth $100 per vehicle, says analyst report
Automotive data could be worth almost $100 per car, representing a potential market for OEMs of $33 billion by 2025 according to Frost & Sullivan.
The analyst company's new report, Automotive Data Monetization Pricing and Business Models, highlights the potential to monetize $100 per car is the automotive sector can create an overarching digital strategy to harness the potential of the data.
Frost & Sullivan highlights that there are over 200 data points which exist today that can typically provide more than 140 use cases. The total revenue opportunity for an original equipment manufacturer (OEM) in the automotive data monetization market is expected to remain on a very strong growth trajectory over the next seven years, growing from $2 Billion in 2017 to $33 Billion in 2025.
"Contextual and vehicle usage data will evolve as the new data currency for value creation amongst B2B/B2C entities involved in the automotive ecosystem as smart mobility, connected cars and autonomous vehicles become the most viable use cases," said Niranjan Manohar, Intelligent Mobility Program Manager.
The analyst company said that data monetization across the automotive ecosystem starts with an overarching digital strategy. For instance, to build a recurring service revenue stream or prescribe measurable objectives, digital innovation is mandatory. However, the automotive industry has to master software capabilities and introduce new monetization models to remain profitable. The total number of connected vehicles, activation rate, and consent rate are some of the key factors that help determine the automotive data monetization market across various data types.
OEMs focused on connected cars, autonomous driving, and mobility must also realize the disruption from non-automotive companies like Uber, Didi Chuxing, Google, and Apple, Frost & Sullivan said. OEMs and Tier 1 suppliers need to reshape their business around IoT and big data analytics, with a focused approach to security across both horizontal and vertical business layers.
The research reveals the major growth opportunities, including OEMs' partnerships with technology companies to share data (only with the customers' consent) with recommended third-party service providers, such as insurance companies and smart parking service providers; and Tier 1 companies investing in startups that are focusing on data-driven platforms, artificial intelligence, and machine learning to leverage Internet of Things applications.
"OEMs are expected to consolidate the car data ecosystem between 2020 and 2025, eventually becoming potential technology integrators and, correspondingly, data gatekeepers," said Manohar.