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Connected Car: BMW’s innovation strength nosedives

Market news |
By Christoph Hammerschmidt

The Volkswagen Groups, with its core brands VW, Audi and Porsche, remains the most innovative automotive group in the connected car sector this year, according to the Connected Car Innovation (CCI) 2022 industry study, which examines innovation trends and innovation performance in the automotive industry in the connected car sector. Mercedes-Benz comes in second place, just ahead of Tesla. The crash of a manufacturer that was actually one of the innovation drivers in the history of the CCI index is remarkable: BMW drops from third place last year to eleventh with just over 27 index points – the worst result since the first survey in 2015.

In the innovation comparison of automotive countries, however, Chinese automakers continue to catch up and achieve a record result, according to the study, which was prepared by the Center for Automotive Management (CAM), an independent scientific institute for empirical automotive research and consulting. The innovation strength of 28 global automaker groups in 2021 was determined based on a total of 336 innovations and services in the automotive future fields of connectivity, interfaces, autonomous driving, and connected services.

In the 2022 CCI Innovation Comparison, Volkswagen achieved an index score of 90 points (IP), Mercedes- Benz came in at 64 IP and Tesla at 54 IP. Ford (45 IP) and General Motors (41 IP) are also classified as “high performers.” General Motors has moved up six places since last year and is now ranked fifth.

The field of Medium Performers is led by SAIC in sixth place (previous year: seventh). Toyota is also among the up-and-comers of the year in seventh place (previous year: 15th). Hyundai and Great Wall in eighth and ninth place were among the top performers last year (fifth and fourth place respectively) and are now in the upper midfield. The Geely Group (incl. Volvo) improves to 10th place.

Innovation strength ranking for connected cars according to CAM study: VW holds top position, BMW falls back to place 11. (Vertical axis: Innovation strength; Source: CAM) 

 

BMW was only able to launch a small number of world firsts in 2021 and therefore only ranks in the chasing pack this year. In the 10-year analysis, however, BMW remains in third place. The French group Stellantis and the alliance partners Renault and Nissan achieve a weak result in connected car innovations both in the current year and in the long-term analysis.

In the innovation comparison of automotive countries, on the other hand, Chinese manufacturers continue to catch up: Whereas Chinese automakers accounted for only seven percent of global innovations in 2016, this figure rises to a record 25 percent in 2021. Germany loses five percentage points and is only just ahead with 30 percent of global innovation strength. American manufacturers are in third place with 24 percent, eight percentage points more than in the previous year. In the case of purely global innovations (excluding group innovations), the leading role of German OEMs is still relatively strong. Germany accounts for 43 percent of the innovation strength, although in the previous year the share was still 56 percent. In second place here, however – unlike last year – is the USA with 27 percent, ahead of China, which accounts for 22 percent of the world’s new products.

“German OEMs are still strong in the connected car. But in relative terms, competitors from other parts of the world are noticeably catching up,” commented study director Stefan Bratzel. “China’s manufacturers have been producing steadily more innovations for several years now, but the U.S. is also catching up again after a period of weakness.”

Connected services already play an important role for innovative automakers, for example in the fields of infotainment, autonomous services, e-commerce/e-maintenance, connected financial services and charging services. The analysis of the performance status of connected services in a comparison of the 28 automakers reveals the strong position of Volkswagen and Tesla. The Wolfsburg-based company demonstrates its innovative strength above all in the areas of e-commerce/e-maintenance (e.g. digital twin chassis in the Porsche Taycan) and charging (bidirectional charging in the VW ID.3). Tesla is also strong in Charging thanks to its Supercharger network, plus novel infotainment services in Gaming (in-vehicle arcade games). The established manufacturers around Mercedes-Benz, BMW and Ford, but also the Chinese newcomer Xiaopeng, can be described as fast followers in Connected Services.

Connected Services promise considerable revenue potential for automotive manufacturers in the coming years. These are not so much one-off revenues from vehicle sales or hardware features, but rather recurring software-based digital services for the entire connected or autonomous car fleet of automakers. Based on the connected services use cases presented in the study, revenue potentials of 900 to 1,100 euros per vehicle and year can be achieved in 2030. Measured in terms of the number of connected and automated vehicles of the OEMs and the use case-capable shares, this results in high global revenues as well as profits. The global connected services market volume is estimated at over 200 billion euros in 2030.

Says Stefan Bratzel: “The future promise of these data- and software-driven services is a particularly good return on investment. To reap these benefits, we need new vehicle architectures on the one hand and corresponding digital ecosystems on the other. However, in order to leverage these revenue potentials, automakers still need to significantly increase their competencies in these future fields.” According to the analyst, this also requires new collaborations with big data players such as Alphabet and Apple, as well as Chinese digital companies such as Tencent and Baidu, which in turn want to conquer parts of the connected services market.

www.auto-institut.de

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