Competing for the Connected Customer

McKinsey Advanced Industries (September 2015)

Competing for the Connected CustomerThe purpose of this report is to offer a perspective on the value that is going to be enabled by increasing in-car connectivity and automation. Based on extensive consumer and executive surveys across three geographies (Asia, Europe, and North America), McKinsey outlines the impact of connectivity and automation on the automotive industry, and discuss potential strategies for automotive industry incumbents and newcomers alike.

Globally, customer demand for car connectivity is increasing at a very high speed: over the past year, the share of customers willing to switch their car brand for better connectivity has almost doubled from 20 percent in 2014 to 37 percent in 2015. The willingness to pay a subscription fee for connected services went from 21 percent in 2014 to 32 percent in 2015. Chinese customers are particularly enthusiastic about connected cars – 60 percent of respondents are willing to switch their car brand for improved connectivity.

Against many expectations, personal data privacy does not seem to be a major roadblock to customer acceptance. Already today, a large majority of consumers very consciously share their personal data with their smartphone software manufacturer; only a quarter of customers categorically refuse to let OEMs use their driving data. That said, consumer privacy will remain a focal point of interest for consumers themselves as well as most likely for regulators. Thus, car manufacturers and suppliers should continue to take this issue very seriously and offer the appropriate safeguards.

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