Connected car sales weakened by coronavirus
New research has predicted that connected vehicle sales will fall 15% this year as a result of Covid-19, while investment in research and development in the technology will also fall.
ABI Research also found that the pandemic led to a global fall in new car sales of 19% in the first quarter of the year.
Maite Bezerra, smart mobility and automotive analyst at ABI Research, said: “In the short term, a few OEMs may temporarily postpone immediate projects that add additional value to customers to concentrate their efforts on actions to reduce costs of ownership and to make their supply chain resilient and agile. However, investments and adoption of connectivity packages should remain constant due to standard fitment, such as eCall.”
OEMs with less liquidity will have to rationalise investment and give preference to providers offering turnkey, low-cost solutions that fulfil basic regulatory requirements. On the other hand, larger OEMs with substantial investment in in-house solutions will be more willing to migrate to third party offerings and benefit from lower costs.
“With the decrease in new vehicle sales, which was already in decline before the Covid-19 outbreak, automakers will have to find strategies to decrease the churn rate of connected services and maximise revenue from registered vehicles. Meanwhile, service providers should increasingly invest in lower-cost turnkey solutions that meet the industry-standard requirements but allow some customisation on top and further upgrades,” Bezerra added.
