3/25/2014 | 1 MINUTE READ

Most U.S., European Carmakers to Offer Connected Services by 2016

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At least 60% of passenger vehicle producers in Europe and the U.S. will develop "big data" strategies that create connected-car services for their customers within the next two years, consultants Frost & Sullivan forecast in a new report.

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At least 60% of passenger vehicle producers in Europe and the U.S. will develop "big data" strategies that create connected-car services for their customers within the next two years, consultants Frost & Sullivan forecast in a new report.

Strategic Analysis of the Impact of Big Data on the European and North American Automotive Industry predicts the two markets will have a combined 35 million connected vehicles in service by 2020. Such vehicles will submit data about themselves and their surroundings that can be aggregated to offer car-by-car insight into nearby traffic patterns, weather conditions, parking slot reservations, electric vehicle charging facilities, vehicle performance and impending maintenance requirements.

The research notes that carmakers could use such capabilities to strengthen the relationships with their customers. It also cautions that the rise of Internet-based service providers could wrest control of the underlying data away from manufacturers that don't act quickly.

The study estimates the amount of useful data emanating annually from connected cars worldwide will jump from 10 MB in 2016 to 5 GB by 2018. The combined flow of such data among vehicles and the infrastructure will surge 100-fold by 2026 to 100 zettabytes, creating a global big-data market whose worth will skyrocket to $123 billion by then from less than $4 billion in 2010.

Leveraging big data will produce annual savings of $700-$800 per vehicle in the form of lower warranty costs, recall expenses, aftersale revenue, smart parking, lower insurance premiums and less traffic congestion, according to the report.

The research notes that carmakers could use such capabilities to strengthen the relationships with their customers. It also warns that the rise of Internet-based service providers could wrest control of the underlying data away from manufacturers that don't act quickly.

Frost & Sullivan says the most successful car companies will be those that find partners to help them harness the predictive power of a big-data framework. Doing so, it says, could reduce warranty costs by 1%-3% and enable wireless software updates for their vehicles.