Big Data is transforming the Auto Industry

Big Data in Auto Industry

The next few years are going to see an explosion in the rate at which detailed data is collected about the moment-by-moment operation of nearly all new cars. This data will be stored and collated in centralized databases that make Big Data analyses possible. McKinsey published a report in 2014 that estimated that the global market for connectivity components and services for cars was $38 billion that year. The report went on to project that the data-driven connected car industry would grow to $215 billion.

Big Data Will Transform Fleet Management

Fleet management will enjoy the greatest benefit from this Big Data analysis. Auto makers will now be able to determine which settings and features drivers actually use. This will help them improve their marketing. It will also identify the features that drivers really care about; this will focus the auto makers’ on-going R&D efforts.

Further, automakers can easily monitor their cars, identify potential problems, and issue maintenance calls. This will help maintain their fleets in peak performance. They will be able to identify drivers who are abusing their cars; they can issue advisories based on that information. All of these efforts are geared to minimizing the maintenance costs and maximizing the performance of their fleets.

Big Data Is Transforming At least Five Other Auto Practices

City Planning — City planners and engineers can use this same data to improve their plans for roadways and traffic flows.

Onboard Navigation — Navigation systems can use real time driving data to discover and display the fastest routes based on current traffic patterns.

Insurance Rates — Insurance companies can access the Big Data collected from connected cars to monitor each driver’s performance and, potentially, use this information to adjust rates and to determine what really happened in accidents.

Auto Dealer Marketing Campaigns — Dealers can use this Big Data to assist in planning their marketing campaigns. For example, Bullseye Prospecting is a product that helps dealers and their marketing agencies automate their marketing campaigns by leveraging third party and internal data on consumer behavior, incentives, and vehicle equity/valuation. This prospecting tool can cut the $600-$800 average per-car cost of sale by about 30%. It also helps dealers by sending a detailed, personalized message to their best customers at precisely the right time to prompt sales and services.

Used Car Valuations and Inventory Management — The 2016 Black Book survey indicated that nearly two-thirds of dealers are using 30%-50% more data since 2014 to establish vehicle valuations. This data also helps them set regional pricing, determine the appropriate supply of cars, and assess each vehicle’s history to manage their inventories. Some 69% of these dealers say the data is giving them better insights on pricing and profitability. 58% say Big Data is providing better insight into managing their inventory procurement. The majority of dealers believe they can avoid a market catastrophe similar to the one in 2008 because the data allows them to make more accurate decisions.