Connecting cars to the internet is a strong trend. Oliver Wyman expects a penetration rate of 50 percent of all new vehicles by 2016; in Japan, North America and Western Europe this rate will rise to almost 100 percent within 15 to 20 years. At the same time, new generations will succeed earlier ones: Proprietary systems with focused singular services will give way to convergent and increasingly open systems. The rationale is no longer to bring the internet into the car but the car into the internet.
In its current study Oliver Wyman identified seven service-based business segments which in the medium term will conquer the vehicles and promise to become a billion-euro business for the service providers. These business fields are safety and remote service; fleet management, mobility, navigation, infotainment, insurance, and payment systems. Particularly strong growth is expected for remote diagnosis and technical services; examples for applications include automatic maintenance information and remote workshop connectivity, for instance for remote troubleshooting and software updates. In addition, the European e-Call system for automatic emergency calls will become mandatory for all new vehicles from 2015 onwards. In Europe alone, Oliver Wyman experts estimate the demand to about 16 million units annually.
Fleet management systems are already in operation. Oliver Wyman author Juergen Reiner expects them to be further rolled out systematically into the volume market into standard platforms. These systems will become cheaper with each vehicle generation. Reiner estimates a CAGR of 20 percent per annum, adding up to 5.6 million units by 2016. Customers expectations to be "always on" even in the care and to have intermodal functionality at his disposal also is creating high growth potential.
In contrast, the market for mobile payment systems is regarded as being in its infancy which will develop dynamics only gradually. In this segment, it is essential that service providers first will emphasize action to gain and increase acceptance from users as well