The automotive industry is undergoing a transformation with the integration of connectivity, leading to a growing consumer interest in in-car digital subscriptions. These subscriptions offer various benefits such as predictive maintenance, safety enhancements, and features related to autonomous driving. However, there exists a rising concern among consumers regarding data security within the industry.
Research Findings on Consumer Attitudes
A study commissioned by Cubic3, a software-defined vehicle (SDV) services firm, surveyed 8,000 participants across the United States, United Kingdom, Germany, and Japan, alongside 60 executives from global original equipment manufacturers (OEMs). The dual surveys aimed to draw comparisons between consumer and automotive executive perspectives on SDVs. Conducted by Sapio Research, the OEM surveys took place from October to December 2024, while consumer insights were gathered from September to October 2024.
Market Insights and Consumer Willingness to Pay
The research categorized digital services into three groups to evaluate consumer willingness to pay for each type. It highlighted a shift in consumer readiness, especially among younger drivers who are more accustomed to digital connectivity. The study predicts that the SDV market may generate over $650 billion in value by 2030.
While automakers estimate that consumers would be willing to pay approximately £8 monthly for these services, respondents indicated a lower willingness of £5.82. Notably, those in the U.S., where car usage is generally higher, displayed greater readiness to pay compared to UK respondents, who reported a willingness of merely £4.89.
Types of Services Consumers are Interested In
- 51% of global consumers are willing to pay for vehicle-based services like autonomous driving.
- 40% globally (42% in the UK) are open to connected services such as streaming video and music.
- 39% (40% in the UK) would consider paying for data services, including predictive maintenance.
Over 25% of global consumers and around 20% in the UK have already subscribed to digital services for their vehicles. Among consumers aged 18-24, this figure almost doubles, with 44% reporting they have paid for such services. Only 20% of consumers worldwide stated they would not consider any monthly subscriptions.
Concerns Over Data Security
Despite the enthusiasm for digital services, there are significant concerns about data security. Consumers expressed apprehension regarding potential hacking threats, with 48% globally and 46% in the UK worried about the vulnerability of their vehicles. OEMs are aware of these issues, closely monitoring potential hacking targets like interfaces, digital sims, infotainment systems, and telematics. An overwhelming 86% of OEM executives consider the cybersecurity of their digital services to be a priority.
Future Opportunities for OEMs
The report suggests that to capitalize on the digital services market, automotive manufacturers must create recurring revenue streams. They see substantial potential in predictive maintenance, safety features, and autonomous driving as key revenue sources. Additionally, over-the-air updates present an opportunity to enhance consumer satisfaction and safety.
David Kelly, chief corporate officer at Cubic3, noted the changing perception of car ownership, stating that consumers increasingly view purchasing a car as an ongoing commitment rather than a one-time transaction. He emphasized the importance of educating consumers about the value of digital services, particularly encouraging to see younger, tech-savvy drivers embracing these options.