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