Study: Connected Car to spur competition between OEMs and IT players

August 27, 2014 // By Christoph Hammerschmidt
The 'Connected Car' is one of the most hyped terms in the automotive industry. But is it real in terms of value creation and market impact? A study from consulting companies strategy& and PwC says yes - but is yet completely unclear who will be the winners.

Between 2015 and 2020, the total available market of networked mobility will almost quadruple - from €31.9 billion to €115 billion, says a market report jointly generated from PwC and strategy& (this is no typo - the consulting company formerly known as Booz & Company really chose this somewhat unusual name). The main drivers in this huge market are safety and autonomous driving. While the segment safety in 2015 will amount to a mere €12.2 billion, products related to safety in the connected car context will be worth €47.4 billion. Likewise, autonomous driving - or better, its preparing efforts and technologies - will represent a value of €7.5 billion in 2015 with growth expectations to €35.7 billion by 2020. Other strong contributing sectors are infotainment (€13.2 billion), comfort (€7.1 billion and vehicle management (€6.7 billion). And these are only the figures for the passenger car market; commercial vehicles were not subject of the study. This market analysis got granular on mobility management, vehicle management, infotainment, well-being, autonomous driving, safety as well as home integration, a field that is relatively new and refers to functions that connect the vehicle with the home and the office, thus creating holistic solutions.

The vehicle increasingly communicates with its environment, with fellow vehicles and with the driver's home, notes Richard Viereckl, who oversees strategy&'s international automotive segment. "This creates enormous growth potential to OEMs."

But not only for automotive OEMs. While the carmakers regard mobility as their home turf, the information technologies required to implement applications like autonomous driving or active driving safety in an increasingly complex traffic environment is dominated by a players in digital electronics and software. Thus, the IT will be the competitive battlefield of technology developments around the Connected Car. Stefan Bratzel from the Centre of Automotive Management expects an interesting development. "The automotive OEMs will continue to regard the Connected Car as their very own sphere of activity and strive