Innovation by automotive manufacturers

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By Pierce Owen, Analyst, Machina Research

As Samsung’s acquisition of Harman last month demonstrated, the automotive and connected car ecosystems are in a period of constant evolution. This was not always the case and is not something with which the OEMs are entirely comfortable. However, one aspect of these ecosystems will not be changing anytime soon: The OEMs are at their center and hold the key to maximizing their potential.

That is why it is important to pay attention to what technologies they are investing in, who is doing the most and who is doing it best.

Of course, the OEMs who do the most and do it best are those willing to collaborate with the new entrants such as Samsung, Apple, Google, etc. as well as the leading MNOs including AT&T, Deutsche Telekom, Verizon and Vodafone. This is because consumers want the same apps and content across all contexts and platforms, and OEMs cannot deliver that by themselves. The balancing act comes in leveraging partnerships with these companies while still deepening the relationships with their customers.

In Machina Research’s latest rankings, we have judged that Mercedes, BMW and GM perform this balancing act best and offer the most in terms of the number of connected functions and features. These three have legacies of innovation and continue to explore ground-breaking technologies such as those in the areas of V2X and C2I (Car-to-Infrastructure) communications, which will enable truly autonomous driving.

Although not featured in our top ten in the rankings, Tesla established itself as an innovative brand the moment it entered the market. While Teslas may not offer as many connected car functions as a top-of-the-line Mercedes-Benz, they often offer connected features in ways that have not been seen before and drive far more mobile traffic than the average connected car.

Beyond the obvious increased battery ranges and electric vehicle performance, Tesla has led the way with over-the-air software updates improving features such as diagnostics, Internet radio and other entertainment, navigation and mapping, and Autopilot self-driving.

All the aforementioned OEMs have developed fully functional connected diagnostics features. This shows that the best connected vehicle systems and most innovative OEMs have put an emphasis on developing relationships with their customers by getting their cars repaired at their dealerships.

Having rolled out these features, the OEMs need to keep up the balancing acts between smartphone integration vs. embedded features and collaboration vs. ownership while continuing to innovate. This means anticipating, discovering and fulfilling customers’ needs before they are known. Offer features and benefits that have not been seen before.

This is vague advice, but it is simply the nature of innovation. Companies take risks to set themselves apart from the competition.

For further information on how Machina Research views and judges the OEM’s connected vehicle systems, read our new report, which grades and ranks the top eighteen OEMs on the features of their connected vehicle systems including, remote controls, driving behaviour, security, maintenance and diagnostics, infotainment and navigation, connectivity, eCommerce, smartphone integration, mobility as a service and volume and consistency. The report does not review performance but rather evaluates sophistication. The top ten are listed below:

Figure 1: Ranking of automotive OEMs by connected car functionality
[Source: Machina Research, 2016]
Ranking-of-automotive-OEMs-by-connected-car-functionality

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