Connected car production to grow rapidly in next 5 years

 

Connected car production is growing rapidly in both mature and emerging automobile markets, according to Gartner.

The analyst firm has forecaster the production of new automobiles equipped with data connectivity, either through a built-in communications module or by a tether to a mobile device, to reach 12.4 million in 2016 and increase to 61 million in 2020.

Gartner defines the connected car as an automobile that is capable of bidirectional wireless communication with an external network for the purpose of delivering digital content and services, transmitting telemetry data from the vehicle, enabling remote monitoring and control, or managing in-vehicle systems.

>See also: Why connected cars might kill the insurance market

“The connected vehicle is the foundation for fundamental opportunities and disruptions in the automotive industry and many other vertical industries,” said James Hines, research director at Gartner. “Connected vehicles will continue to generate new product and service innovations, create new companies, enable new value propositions and business models, and introduce the new era of smart mobility, in which the focus of the automotive industry shifts from individual car ownership to a more service-centric view of personal mobility.”

Connected car production by connectivity mode, worldwide (thousands)

  2015 2016 2017 2018 2019 2020
Embedded 2,174 4,914 11,097 21,394 33,928 42,949
Tethered 4,681 7,519 9,971 12,374 14,995 17,994
Total 6,855 12,433 21,068 33,768 48,923 60,943

 

Connected car technology will create opportunities for automakers to generate post-sale profits through sales of additional services and feature upgrades, as well as enhance brand loyalty through a more personalised customer experience.

It will also enable innovations in adjacent businesses, such as insurance, car rentals, car- and ride-sharing services, and electric vehicle charging.

Gartner predicts that future connected car applications will drive a 150% increase in demand for contextual information, such as image detection and geolocation, from 2016 to 2020.

>See also: The future of driverless cars and data security

“As cars become more automated, they are being equipped with an increasing array of sensing technologies, including cameras and radar systems,” Mr Hines. “Many automobiles will use image detection as the primary means to identify and classify objects in the vicinity of the vehicle so they can provide more sophisticated responses and even have autonomous control.”

To become more automated, and also cleaner, automobiles will require 5% more embedded processing functions, year over year, from 2016 through 2020, Gartner said.

Automated driving functions, such as adaptive cruise control, collision avoidance and lane departure warning systems, necessitate real-time camera and sensor data processing and pattern recognition.

Improving fuel efficiency and reducing emissions necessitate sophisticated engine and transmission control systems.

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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