Software-over-the-air (SOTA)

Top features from a consumer perspective and willingness to pay

The pressure to transform is rapidly growing in the automotive industry, and establishing new business models, especially in the software sector, is becoming increasingly important. Digital services in the car are also gaining in importance.

The US manufacturer Tesla recognized this early on and is driving the competition with ever-new business models. Meanwhile, German car manufacturers, still in the middle of the transformation phase, have only hesitantly entered the digital services market. Since our “Software-over-the-air (SOTA) – saving costs and improving customer experience” publication in 2019, many OEMs have expanded their offerings in terms of upgradable features over the air.

Our study examined:

What is the general consumer attitude toward digital services and SOTA?
Which digital service categories and individual digital features are important to the consumer?
What is the willingness to pay, and do consumers have a preferred pricing model?
What are the most important recommendations for action for car manufacturers?

The study surveyed over 600 respondents in China, Germany and the US about their expectations and preferences for digital services and willingness to pay for each service category. The respondents were 35 years old on average and owned a car.

Key Take-Aways

General interest in SOTA is very high; Safety & Security features are the most important

Worldwide, 93 percent of the consumers surveyed stated that they were interested in using and acquiring digital services through new software updates for their cars. China represents the largest but also the most demanding market in terms of digital services. The most important feature categories from a consumer perspective across these markets are Safety & Security (91 %), Navigation & Infotainment (84 %), followed by Comfort & Convenience (71 %), and Entertainment (66 %).

Top 3 digital services worldwide

The top three features worldwide within the featured categories are real-time traffic information, vehicle theft, and warning and locking system features.

German willingness to pay is the lowest

In comparison, consumers in Germany have the lowest purchase intention regarding digital services. On average, they are willing to spend €214 a year on digital services. Consumers in China have the highest, with consumers willing to spend €353 per year on average for digital services.

Package purchase and free trial period expected

Globally, consumers need to be flexible regarding how and when they purchase digital features. OEMs should align their product portfolio to create attractive feature bundles (e.g., a safety/security package) but still leave consumers the option to purchase features on an individual basis (e.g., a digital vehicle key). 90 percent of the participants surveyed stated they would use a trial phase before buying a product.

An infographic and the complete study with all detailed results and our recommendations for action are available for download here. Enjoy reading!