Connected Business Technology Your partnerships will determine the success of your connected vehicle services – here’s why November 5th, 2024 How can OEMs benefit from partnerships with connected vehicle service developers? There is a growing realization among automakers that collaborating closely with digital service developers and providers is not something to avoid. In fact, it is critical to their success. Let us look at the key aspects of these partnerships, including what OEMs can gain, avoid, and become better prepared for, because of them. Why OEMs are changing their views on connected vehicle service development The idea that OEMs should develop and operate their connected vehicle services completely by themselves used to be ubiquitous. In recent years, however, automakers have become more open to collaborating with digital service specialists from other companies and organizations in order to deal with the complexity of digital transformation. There is a growing understanding that partnering with these service specialists will facilitate – not obstruct – the OEM’s overall business model. Legacy manufacturers in particular are used to controlling all their hardware themselves, and essentially selling their finished product once. Even as connected vehicles are expected to deliver significant annual incremental value already by 2030 (according to McKinsey), many OEMs are not prepared for what that will demand of their organizations. By entering into digital service partnerships, OEMs can continue to focus on what they do best, and buy the complementary expertise, services, and products they require. OEMs need their connected vehicle services to remain fully functional for years, often well over a decade. The importance of reliability, longevity, and creativity in this context cannot be overstated. So, how do partnerships help provide that for the OEMs? Four key reasons for partnering with a connected vehicle service developer Specialized skills By partnering with a connected vehicle service developer, the OEM brings in specialized skills, innovative ability, and additional experience. The OEM simply cannot have all this expertise in-house, nor can it be expected to do all the necessary innovation by itself. Connected vehicle service expertise takes a long time to develop. Refining your specialized skills requires experience and years of tried and tested innovation. That is how you become a capable, trusted business partner. Service innovation There is a common misconception that innovation starts with money, such as a sizable venture capital fund. Real innovation comes when OEMs work through their partnerships, especially over the long term. There is a trust level there, and likely a good track record as well, where OEMs and their partners shoulder the entrepreneurial burden together. By sharing the service innovation responsibility, the OEM can also allocate its resources more efficiently. Broader digital services and products can largely be innovated by partners, whereas the OEM can focus on brand-specific features that set it apart from its competitors. Risk sharing Partnering with a connected vehicle service developer doesn’t just increase the innovative potential: it also helps lower the risks involved. Working together will usually solve the issues that inevitably come with the innovative process. There is also a major difference between learning how to do something, and learning how to do it really well. Moreover, partnerships allow OEMs to keep better pace with the rapid digital evolution of connected vehicles. Not all OEMs do, but their partners can, ensuring that both parties can be at the technological forefront. Global reach Many OEMs seek to build and maintain digital platforms that cover the globe. But building and operating these platforms – and their connected vehicle services – requires having significant knowledge and a solid digital infrastructure in place. Should an automaker really concern itself with the digital services being rendered in a particular market? A service developer and partner can do that much more efficiently on the backend, including managing the vast array of partners in the ecosystem: telecom, content, mapping, call center and hosting providers, for example. OEMs and end customers alike just want their connected vehicle services to work; partnerships can provide you with that coverage and reliability. How partnerships help OEMs transition towards software-defined vehicles Traditional automotive business models are changing in fundamental ways. There is still hesitancy among some OEMs, but no one is denying the reality that the automotive industry has entered a paradigm shift. A shift that forces OEMs to evaluate their products and services, in the transition towards software-defined vehicles. OEM partners such as WirelessCar certainly need to scrutinize their work as well. However, our 25 years in the connected vehicle space means that we are already evaluating ourselves constantly. What constitutes a connected vehicle service, product or solution to us? How do they help OEMs and their end users? How do we leverage our experience in order to remain at the very forefront of innovation? Innovation that, a lot of the time, is not about flashy features. It’s about being knowledgeable on all the necessary integration points, machine learning, cyber security legislation, data privacy and protection, and other key factors that will determine the success of connected vehicle services. The transition towards software-defined vehicles is less of a future event and more of an ongoing reality, as connected vehicle services already need to work seamlessly today, at this moment. Running and maintaining it all is quite an operation, but at WirelessCar, we are already doing that for our customers. All these day-to-day operations tend to make us very detail-oriented, but it is to the benefit of our customers. By making it work today, we facilitate the development of software-defined vehicles. We also ensure that the OEMs don’t have to create or operate the necessary digital services by themselves. What WirelessCar is doing to facilitate digital service partnerships, and what that means for you WirelessCar sits between a lot of small and medium sized service providers and startups on the one hand, and tech giants such as Google and Amazon Web Services on the other. That is a good place to be as a connected vehicle service developer and provider. It means that we have the scale, breadth, market presence, and experience to help OEMs in all areas concerning connected vehicle services. In order to keep meeting our customers' needs as they evolve, we are continuously building our organization to support product development/management, cyber security, regulatory requirements, and global partner development. That also means looking at what substitutes and alternatives are out there. Are they better and/or cheaper? Do they have broader coverage? It is a continuous loop that we maintain and foster. Currently, WirelessCar has offices in Sweden, Germany, China and the United States. We will soon open a new office in Japan, which will bring us closer to our Japanese partners and customers. Having a physical presence in Japan is important from a cultural and language perspective, and gives us a better understanding of the needs and developments in that market. Gaining more knowledge regionally will benefit the entire organization, and our partners and customers worldwide, by learning about and adapting to local needs. It also makes us more proficient in supporting our customers in their global aspirations. We currently operate in more than a hundred countries, and continue to expand into more and more markets. Interested in knowing what a partnership with WirelessCar could mean for your business? You are welcome to contact us via the addresses below. For more on this topic, make sure to also read our WirelessCar Insights Blog article about OEM make/buy strategy. George Ayres Founder and Managing Director, AutoMobility Advisors Contact Greg Geiselhart VP Sales & Marketing Contact
