Car connectivity can help automakers retain aftermarket and service revenues

Automakers should move quickly to benefit from the sales and service opportunities provided by connected cars.

That is the main conclusion of an analysis by consultants Oliver Wyman.

The study notes that by 2016, there will likely be about 216 million connected cars on the world's roads, up from 45 million last year. That provides a direct opportunity to provide individual and competitive service offerings to customers, Oliver Wyman said.

"If automakers go all out now and consistently use the advantages of car connectivity, they will be able to leave the independents in after-sales far behind for now," the consultants said.

The aftermarket is important because automakers and dealers derive between 30 pc and 50 pc of their earnings from service and spare parts.

Oliver Wyman said the coming of eCall, a Europewide automatic emergency calling system scheduled for implementation in 2015,  will provide a boost to car connectivity. In a press release, Oliver Wyman partner Sven Wandres called eCall "a very good instrument for customer retention in the automotive sector."

The analysis said customer acceptance of connected on-board diagnostics and remote-repair systems is high and the consultants said surveys show customers are willing to pay for such services.

But automakers need to move quickly to put the necessary technology into their cars and provide a "competitive basic functionality," they said.

"The manufacturers have clear advantages when they move quickly," said Oliver Wyman partner Matthias Bentenrieder. "Because of their new-car business, they are in pole position. They have the customer, the vehicle data and the networking and can, therefore, for the time being keep free workshops in check."