5G will transform vehicle value to benefit consumers, dealers and car makers

Boston — A new study, conducted by Strategy Analytics for Avanci, has identified transformative value propositions deriving from the introduction of 5G technology. This, says the company, is especially important now that nearly all cars sold in Europe, the U.S., and China come equipped with connectivity.

“5G connectivity will allow automakers to preserve or enhance the value of vehicles post-sale in a manner that will alter the calculation of residual vehicle values,” says Roger Lanctot, director of connected mobility at Strategy Analytics. “This, in turn, will influence the economics of leasing and the market value of both new and used cars.”

At the same time, 5G connectivity will directly assist and support the development of advanced driver assist systems capable of helping cars avoid collisions while facilitating self-driving vehicle operation. Over time, 5G connected cars will capture an increasing share of unit volume with an even faster capture of sales revenue.

Once all cars are equipped with 5G, the report says that auto makers will be able to tap into $40B (€35.49B) in annual warranty cost avoidance; consumers will see $32B (€28.39B) in annual lease/loan savings; and dealers will see a $24B (€21.30bn) annual enhancement in revenue at the point of sale. These savings are above and beyond the societal gains expected from reductions in collisions and emissions, which will also be in the billions of dollars globally.

“Until now, car connectivity was a take it or leave it value proposition for consumers,” says Roger Lanctot, director of connected mobility for Strategy Analytics. “5G will change all that.”

The full report is available for download here: “5G Connected Cars: A Transformative Value Proposition”

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