In-car subscriptions are here to stay

Did you know that car subscriptions is becoming the one of the quickest growing areas of the automotive industry?

 

We are all familiar with long, short term and flexible vehicle rentals to accommodate your personal needs. In addition to  business leases, that have long been a desirable corporate perk for years.


‘Subscribing’ like this has increased over the years in the automotive industry with many new names entering the market to take advantage of the demand.


With everything from the road tax to servicing, breakdown cover and insurance bundled in – all you need to do is drive it away – you can see why this is an appealing way to have access to a vehicle. Subject to the contract you have, you can chose to either end the contact or swap the car for another.

 

This kind of pay as you go car ownership is predicted to account for around 10% of new car registrations in Europe and US by 2025.
In much the same way, many people have ditched owning DVDs and CDs in favour of paying for a service and then just streaming content you want, this a well-known set up.

Another comparison would be streaming games.
Xbox, PlayStation, Nintendo are just some of big players that offer consoles and devices with ecosystems, allowing you to access electronic copies of games, so you don’t have to have physical copies taking up shelf space.

So imagine, you are busy enjoying your new game that you have just purchased, but you find out that to unlock a section, feature, ability (or mod, for you nerds out there) – you have to pay more money. An in-game purchase.
The bane of any gamer’s life.
Suppose you applied the same premise for your new car, that you have already paid for, and now have to pay another cost to use the seat warmers?
Outrage.
In fact, that is the exact heated sentiment that was felt when BMW announced earlier this year, that it was going to introduce a £15 per month subscription charge for using the front heated seats.

This won’t be a flash in the pan idea. In-car subscriptions are predicted to be around for the foreseeable future.
General Motors expect its in-car subscription services to generate $25 billion by the end of the decade, an amount that will put it in the same league as Netflix and Spotify. Stellantis, the parent company of Jeep, Dodge, and Chrysler, expects to generate $22.5 billion from selling software and subscriptions alone by 2030. Ford have partnered with Google, leveraging Google Cloud to digitally transform “customer experiences by deploying innovative and personalised services”.

 

With the increase in connectivity and intricate digitalisation of cars, car owners can expect a more customised experience, immediate upgrades (or downgrades) and better integration with existing technologies, such as mobile phones and other devices.

Software upgrades will mitigate dropping unit sales and provide sustainable revenue to the automotive supply chain.
New solutions and services will be able to be rapidly deployed Over-The-Air (OTA), decreasing the time from development to launch of new services. This increases the sales velocity typical of the automotive sector, to become like the SaaS self-serve customer acquisition journey. 

However, it’s not all good news, the increase in connectivity and digitalisation creates a larger surface available for cyber attack. Employee error, malicious attackers, home and even professional “modders” are probable threats, and the severity of a successful attack could range from minor to catastrophic.

Cyber resilience must be built into the entire vehicle lifecycle, including software and updates. Regulations and standards such as UN Regulation No. 155 and the ISO 21434 are just the tip of the iceberg. It’s not yet clear what sanctions may be levied on those that fail to provide adequate measures to prevent, detect and respond to breaches.

Typical desktop cyber security solutions may not be suitable for automotive, as most assume attackers have no physical access to devices, an amiable end user and shorter hardware lifecycle.

Those within the automotive supply chain should look towards collaboration with cyber security specialists to create and tailor existing solutions to fit the long life requirements of vehicles, whilst enabling innovation.

 

CyberHive are part of the UK Research and Innovation’s Digital Security by Design (DSbD) ecosystem and are working with leaders in the automotive industry to secure connected services, and foster innovation that will generate and grow revenue, reduce costs and improve customer satisfaction.

 

CyberHive’s Trusted Cloud Platform contains modules such as Connect, a low latency, highly secure connectivity solution developed specifically for embedded technologies backed with post-quantum algorithms to protect long life devices.

 

Contact us today for more info on how CyberHive could support your business operations. 
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