How do you create new revenue channels using the same products that have been in existence, in one form or another, for well over a century? This is a question many Automotive OEMs are asking today. And with mobile devices enabling consumer connectivity – there are many options to explore.

 

One of the ways is through a program called “Car-sharing” where many different business models have emerged.  These models include (but are not limited to):

 

  • Full OEM created in-house Car-sharing solutions – car2go by Daimler
  • Joint ventures with existing Car-sharing providers – driveNow! by BMW & SIXT
  • Disruptive peer-to-peer car renting programs – RelayRides by GM
  • Location based mobility solutions in urban areas – GM’s Maven

 

Cashing in on Increasing Demand

 

Believe it or not – Car-sharing is not something new. The idea has actually been around for quite some time. The first time Car-sharing was referenced in writing was in 1948 when a housing cooperative in Zurich developed such a concept – but it was not formalized yet. In 1960’s, Car-sharing began to take shape and some of the structural components for such a program were established. Modern day Car-Sharing providers Zipcar and Flexcar began operations in Washington DC in the early 2000’s.  

 

What is new about Car-Sharing is the increasing demand. Car-sharing has blossomed into an idea that allows many consumers from around the world to participate in such programs with simple access and scheduling through mobile devices. And data shows that these types of programs are here to stay. Car-sharing demand is greatest in urban areas of both developing and developed countries around the world. Worldwide Car-sharing activity is up to more than 86,000 vehicles with 2.5 billion minutes of drive time booked per year, and over $690 million in revenue. (Source: BCG Research)

 

The Car-Sharing market is anticipated to continue accelerating, and is likely to reach nearly 35 million participants by 2021. The size of the urban population and the number of licensed drivers will ultimately determine the growth of car-sharing services in Europe, North America, and Asia-Pacific. 

 

Are OEM’s Prepared for Car-Sharing Programs?

 

Will OEM’s need to adjust production volumes to accommodate Car-sharing programs? Yes – it’s possible that more vehicles, not less, will be needed to support these types of programs. In fact, consumers participating in Car-sharing programs most often use them as an additional source of transportation and not a replacement for car ownership.  More than 75% using Car-sharing options still own at least one car. (Source: Mobility of the future: Opportunities for automotive OEMs, McKinsey & Company). 

 

Car-sharing models change urban driving possibilities, driver behavior and offer alternative business models for OEMs and other new types of businesses. They create new ways to generate revenue and attract buyers looking for convenient transportation. Couple this with the emergence of Autonomous vehicles (driverless cars), and you start to visualize this true “game changer” in the Automotive Industry. Business leaders at OEMs can prepare for this period of accelerating change by creating the required ammunition now to reap great rewards in the near future. 

 

 

The Top 8 Features Needed for Car-Sharing Programs

 

Car-sharing programs need to be flexible enough to be deployed on any car platform and need to be offered as a service (in the cloud). This will allow the program to be both economical and easy to use. Listed below are the top 8 features that should be included in any Car-sharing program:

 

  1. Subscription Management System – Helps to manage subscriber information, reservations and fleet status, provide registration notification, billing, payments, promotions, penalties and accommodate multiple payment models, rate plans and more. 
  2. Cyber Security – Offers protection against cyber-attacks on Telematics units and Infotainment systems such as direct telematics unit attacks, communication channel attacks and a vehicle’s internal network attacks.
  3. Asset Management System – Supports asset scheduling, allocation and tracking. Also possesses geo-fencing capabilities and can set-up/send alerts/notifications depending on the context.
  4. Vehicle Monitoring – Monitor vehicle functions, vehicle status notifications, receipt of maintenance alerts and driving behavior.
  5. Remote Vehicle Access – Ability to allow locking, unlocking and starting the vehicle remotely.
  6. Insightful Analytics - Actionable and insightful analytics that allows an OEM or service provider to align their business models, strategies and inventories based on the actual demand and context.
  7. Personalization – Allows the provider to offer personalized media and content using the user profile, preferences, vehicle settings, history and more.
  8. Connected Services through Subscriptions – Integrates easily with external platforms so that  additional services such as analytics, maps & navigation, parking, weather, fuel price monitoring and more on a subscription basis are possible.

 

Solutions that constitute these vital components will help OEMs to deliver consistent user experiences, showcase innovative thought leadership, open up new revenue streams, and reduce the cost of operations while having the ability to monitor and control vehicles effectively. In turn, the consumer will benefit through improved efficiency of time, increased driver safety and by having a more expansive choice for transportation as their needs change.

 

Read more on how HARMAN is assisting Auto OEMs create agile, secure and user friendly Car-sharing systems through its Car-as-a-Service solution offered over the HARMAN Ignite platform.