From Connected Cars to Big Data

The concept of Connected Car generates a volume of data of such mag-nitude that manufacturers, with the help of big data, can create valuable propositions for tailored customer solutions.Two use cases illustrate the possible applications on the Chinese automobile market.

Modern vehicles are already communicating with one another and their surroundings even now. An estimate by Deutsche Telekom indicates that the amount of data transmitted monthly will rise in only a short time from four MB to �ve GB.1 Car-makers have steadily been integrating ever more extensive IT systems in vehicles for years, and the computing power of these systems today is many times greater than that of the PCs commonly found in stores. �e number of connected vehicles will reach 210 million by 2016.2 Vehicle manufacturers are planning to improve the operation and servicing of the vehicles through the use of state-of-the-art sensor technology and Internet connection and to create a new kind of driver experience.

China is a pioneer in mobilization – an ideal market

So it is safe to say that data volume will continue to rise in the future. �e incorporation of new services inside vehicles such as Internet connection, telematics, or the utilization of applications such as parking space searches will add completely new forms and sources of data. If the potential of these new services is to be exploited in the best way possible and steadily improved, it will be necessary to develop and implement analysis methods. �is type of analysis – known as big data – can help to process large quantities of data in structured form and generate a contribution that will decisively expand the range of o�ered services.

It would be di�cult to �nd a region of the world where this trend to steadily increasing mobilization is as omnipresent as it is in Asia. �e number of vehicles used, smartphones, and the general availability of data are especially immense in China. Moreover, the rapid pace of urbanization and modernization of the country is an important driver for the use of state-of-the-art tra�c guidance systems in the Chinese megacities like Beijing and Shanghai. Such systems open up completely new opportunities when communicating with connected cars. �is is why China is the ideal market for demonstrating how big data can help to drive forward the continuous connection of vehicles with their surroundings and what added value can be generated for the automotive industry. We have created two use cases in which we present the experience we have collected.

From Connected Cars to Big DataFocus on China

1 http://www.telekom.com/media/media-kits/179806.2 In 2011, the number of connected vehicles was 45 million. �e annual growth rate since then has averaged

36%. Source: Statista.

76 Detecon Management Report dmr • Special Automotive 2015

3 http://www.zeit.de/wirtschaft/2011-03/china-urbanisierung/seite-2.

Direct Parking

China’s cities are characterized by two factors: size and growth. By 2030, more than one billion people will be living in cities. �ere will be more than 220 cities with populations in excess of one million.3 �e combination of urban growth and the great demand for vehicles is the cause of a number of challenges in China. Air pollution, congestion, and lack of parking spaces have led to a state of near-collapse in the urban tra�c infrastructure. �e automobile is still regarded as a status symbol in China, so the number of vehicles in cities continues to grow. Opportunities to expand the network of streets in these densely populated cities, on the other hand, are severely limited. �e only way out of the dilemma is to increase e�ciency through the use of modern technologies that will alleviate the problems of urban tra�c.

�e application Direct Parking tackles some of the issues brie�y described above. Its purpose is the simpli�cation of parking in urban areas. A central navigation system oper-ated by Direct Parking accesses the navigation system in the vehicle and directs individual cars dynamically to the available parking spaces in the city. Moreover, the app reserves for a short time the targeted parking space in the parking structure or at digital parking meters connected with the city’s tra�c guidance system, and an integrated payment system reg-ulates the required parking charges. All the driver has to do is enter a �nal destination in the vehicle’s navigation system and enable the Direct Parking application in the vehicle. �e system makes use of the vast real-time tra�c data of the city as well as the application’s own data �ows. �is decentralizes to some extent the city’s tra�c guidance system so that it responds dynamically and is more e�cient in the assignment of parking spaces.

�is state-of-the-art system does more than coordinate parking space assignments; it is also capable of recognizing at an early stage the areas in the city where there is a high demand for parking spaces. From this starting point, dynamic routing goes on to direct users e�ciently around these areas. Moreover, predictive analytics determines the areas where the next parking spaces will become free. An important element here is the linking of large quantities of real-time data from the entire city area – Direct Parking application and tra�c guidance system – with the complete archive of historical tra�c data of the particular city as well as data from social media channels and information about upcoming large events. �is combination enables highly precise assumptions of how tra�c will develop in any area of the city at any time of day.


360° customer relationship management

China’s size as a contiguous single market is unique in the world. More than 1.3 billion consumers represent enormous economic potential – an El Dorado for the use of big data as a means to analyze large volumes of customer data. Big data’s ability to recognize patterns and structures in these data and not only to process such huge data quantities in real time makes it highly interesting for the analysis of customers and their behavior. �e growing number of vehicles that are equipped with telematics systems represents a gold mine of customer-speci�c data, collected by these vehicles, that has yet to be exploited.

360° customer relationship management (360° CRM) is a concept for the utilization of these customer data in the automotive industry. In its most basic terms, the objective is to become more familiar with drivers and to understand them better so that tailored ser-vices packages can be o�ered. Seeing the world through the eyes of the customers creates a clear competitive advantage. In past years, a period in which the automotive market was able to post exorbitant growth rates, there was obviously no need for comprehensive, structured, and innovative CRM; this observation has been veri�ed by discussions with our local clients. �e most recent �gures indicate, however, that it will no longer be pos-sible to realize high growth rates in the two-digit range in the coming years because the Chinese automotive market is displaying signs of saturation. Attention is focusing increas-ingly on structural management of customer relationships, especially in China.

Generally speaking, Chinese customers are very quick to switch and do not show any great brand loyalty when making their buying decisions. Now it is necessary to implement systems and actions in this market environment that will generate and maintain customer loyalty. Innovative service packages, China-speci�c product adaptations, and personalized marketing in combination with the vehicle will play a major role in the generation of customer loyalty.

�e objective of 360° CRM is the creation of a fully comprehensive picture of customer expectations. Automobile manufacturers can respond to expectations even before they have been expressed by the customers themselves. Customer care will be transformed from a reactive to a proactive service. Securing e�cient performance of such proactive commu-nication requires the utilization of state-of-the-art technology. �e quality of the digital customer relationship will become a key competitive factor. �e primary question in the future will not be how to obtain customer data, but how to use them.

360° CRM builds on existing CRM systems and makes use of the data that have been generated in them. Its special feature is in the intelligent use of these data generated by connected cars. �e data pertain not only to the current and previous condition of the vehicle, but include as well the probability of the occurrence of events in the future. Pre-dictive analytics in particular – if the appropriate sensor technology has been installed in the vehicle – can determine the probabilities of damage or the necessity of unscheduled repair work well in advance and, as of a certain threshold value, enable car-makers to respond and to notify customers. �e link between the data from the sensors and the


various driver pro�les created for the drivers of the speci�c vehicles goes one step farther. Based on the driver pro�le and the driver’s way of handling the vehicle, even more precise determinations of what unscheduled work will be required become possible. �e capabil-ity of vehicle manufacturers to make such assumptions opens the door to the enhancement of service quality by using an unscheduled maintenance window to notify drivers of the occurrence of a defect. In the eyes of the customers, a repair job turns into proactive maintenance!

�e driver pro�les lead to additional innovative use cases. �e great majority of the col-lected pro�les transmitted to the car-makers can be analyzed and cataloged with the help of big data so that drivers can be classi�ed directly in terms of the driving style they exhibit and not only on the basis of their demographic classi�cation and �nancial opportunities. Manufacturers can respond to individual driving styles and, via the connected car, provide customized vehicle settings to customers that the vehicle downloads and implements autonomously. A customized driving experience is presented to customers – without their having to make special trips to the service centers and to adjust the mechanical settings on the vehicle. �e newly acquired customer data are also utilized in the speci�cations of future model lines and their adaptation to analyzed customer groups. If the customer data collected from 360° CRM are coupled with feedback for other channels such as search engines, direct customer feedback, and social media channels, there will be a more sharply drawn pro�le of the customer structure and customer desires in China. �ese are essential data for automobile manufacturers so that China-speci�c product adaptations can be determined and incorporated into new models. �is is yet another situation in which the combination of digital input channels and big data during analysis plays a decisive role.

Technical possibilities like these create new paths for vehicle marketing and for interaction with the customers in general. �ey go hand in hand with new challenges for the manu-facturers as well, however. �e integration of the big data and CRM systems that meet the requirements described here brie�y is a highly complex undertaking. Even more, these systems must be designed to be high performance so that friction-free interaction with customers is assured. �e success of 360° CRM is proportional to the apparent ease and invisibility with which customers are addressed. Furthermore, companies must adapt their marketing actions to take the new opportunities into account. Vehicle marketing must be rethought in certain dimensions.

Florian Müller is working as a Managing Consultant in Peking and Munic. His focus is on conception and implementing of innovative projects close to IT for international clients. Marcel Plaschke is a Senior Consultant in Peking and Munic. He advices clients of the automotive industry in strategy and marketing of new and innovative mobility services, from concept to launch. Philipp Pytel is a Consulting, working in Peking and Munic. He advices clients on the topics of ICT Innova-tion and new business models.


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From Connected Cars to Big Data