23 May 2017

With estimates that car retailers in Europe now generate around three quarters of their profits from aftersales, it has become more critical that OEMs and their franchised networks listen to their customers and provide the goods and services that are required. Connected cars and dedicated smartphone apps offer an unprecedented opportunity to forge one-to-one relationships with car owners and provide customer-specific targeted information.

Many market analysts forecast that connected cars will achieve mass-market penetration over the coming years. Estimates indicate the overall number of vehicles with built-in internet connectivity will increase from roughly 10% of the overall market at present to 90% by the end of the decade.

Research published by Kantar WorldpanelComTech (2016) showed mobile penetration in Europe’s largest five countries has now reached over 90% and that almost three quarters of European consumers now own a smartphone. In this context, motorists in Europe are now ready for a digital revolution in aftersales communication.

A Cap Gemini study, Cars Online, (2015) surveying over 7,000 consumers in France, Germany and the UK (along with Brazil, China, India and the USA) revealed that interest in connected vehicles is high. Almost 50% of car owners stated they already use connectivity features or would like to do so with their next car.

Manufacturers continue to experiment with new digital methods of communication to reach car owners. For example, Mercedes-Benz launched its ‘Mercedes me’ online platform in 2014 which features an embedded communication module with an integrated SIM. BMW’s ConnectedDrive offers a wide range of services including a 24/7 call centre, smartphone-controlled remote control functions and automatic maintenance services.

Mainstream car brands are now following suit. In the UK, for example, Volkswagen has very recently launched an app which gives owners the opportunity to access their vehicle service records and track workshop bookings.

However, players in the industry must also respond to fundamental consumer expectations around security and data privacy. The aim of the new European Data Protection Regulation, announced by the European Commission in 2016, is to harmonise the current data protection laws in place across the EU member states. Countries are obliged to transpose it into their national law by May 2018.

There may well be particular challenges for the automotive industry with this new regulation as more often than not OEMs and retailers are separate legal entities where customer data and opt-ins are being collected by both parties.

With a much higher risk profile if regulations are not met in terms of increased fines and the need to report data breaches within 72 hours to the appropriate regulator and the individuals affected, there is much to be put in place by the automotive sector in terms of data protection within the next couple of years.

This is an extract from the European Aftersales Roadmap, an Auto Retail Network report published in association with MSXI investigating how the industry will evolve from selling and servicing of cars to integrated customer experiences. With 74% of people saying they will do repeat business with a company if the experience is easy, developing your future strategy for handling customer contacts is critical. For more information about the report, contact Paul Dyer, UK Operations Director (pdyer@msxi-euro.com)

Tags: aftersales, Cap Gemini, Car, connected, customer, Data, internet, MSX International, Paul Dyer, protection, regulations, relationship, sales