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Let’s rethink value creation in the Automotive Sector: How telematics, data and a modern strategy will re-shape the industry’s future

Leonardo Alves
Person by electric car

In a mature industry such as automotive, which consistently looks to differentiate and drive new value at every turn, not every change needs to be disruptive. In fact, it doesn’t even need to change the way that automotive businesses exist, operate and generate revenue. We have a tendency to focus on the latest innovations, such as generative AI, Web 3.0, and the Metaverse and forget that value creation is also possible in less disruptive ways.  

But this source of value creation will not be found within the confines of the existing industry. We are talking about exploring the boundaries of what is possible with the impossible. It’s only here - at the edge of the possible and impossible - that new value creation can be found.

In the past, hardware and manufacturing prowess were the sources of differentiation and value creation. We are thinking beyond this standard border. We believe that future battles in automotive will be fought around software, customer value, and data intelligence. Enter, telematics.

So what are vehicle telematics and how does it work?

Definitions are important, especially when dealing with complex subjects. Let’s break down what we mean by telematics. In simple terms, it is the integration of telecoms and informatics to gather, store, and transmit (vehicle) data. Telematics consist of various components, such as sensors and onboard diagnostic devices, which capture and can wirelessly transmit real-time data to a central server for analysis and interpretation. 

diagram explain what telematics is

For automakers: telematics is a secret weapon in product development

For automakers, the pandemic highlighted the importance of efficient supply chain management, particularly when dealing with complex products such as cars, in a rapidly evolving and ever-evolving competitive landscape.

Telematics data gives manufacturers real-time visibility into their supply chain. By analysing data points, automakers can identify bottlenecks, optimise logistics and streamline their operations. All of this results in a lower cost base and the possibility of greater margins.

On the other side of the coin, telematics can be a secret weapon in product development. Established automakers can analyse real-world data to develop a deeper understanding of how their vehicles are being used and see new usage trends and customer preferences. This becomes the creative fuel to enable manufacturers to design and engineer products that neatly meet customers’ evolving needs and desires. Telematics provides a goldmine of data insights to create this tight feedback loop between users and manufacturers.

25% the increase in customer satisfaction amongst companies using telematics due to accurate ETA and improved customer communication.

Source: Ctrack


For service providers: telematics reduces premiums and drives costs down

The huge potential that telematics offers service providers must not be under-estimated. Preventative maintenance and new usage-based products are where service providers will make the biggest impact.

Lease or mobility providers and fleet managers can continuously monitor vehicle data and proactively manage the maintenance of their assets. This minimises downtime and maximises vehicle availability. This saves time but also avoids costly repairs and unexpected surprises. 

It also unlocks value by analysing the aggregated and anonymised driver’s data. With these insights, an insurer or a leasing company can provide a personalised, usage-based product. Telematics might even nudge drivers to adopt safer driving behaviours and even reduce the driver’s insurance premium whilst increasing the asset’s lifetime value.

50% the fuel economy achieved by company car drivers using telematics systems.

Source: Energy saving trust


For users: telematics drive fuel efficiency and better car maintenance 

Telematics doesn’t only benefit the sellers, but it also helps the buyers. 

The same predictive maintenance mentioned above is highly desirable for a car owner. Today, customers are welcoming using data in their lives. Telematics can help people to increase fuel efficiency, driving range or reduce maintenance needs. If done correctly, these usage-based insights - which reduce inconvenience for vehicle owners -  can be a source of customer loyalty. They usher in a new era of customer experience by strengthening brand reputation and providing a previously ‘untapped’ source of brand differentiation. 

 30% discount on insurance premiums for vehicles equipped with telematics.

Source: RAC Insurance


Kin + Carta has delivered, providing a more than a solid foundation for the ongoing digital transformation of our business while supporting us as we establish Lexus as a global luxury lifestyle brand.
Christophe Muelemans, Communications Manager, Lexus Europe

Game-changing: a data-enabled and intelligent future is ahead

Capable of unlocking tremendous value, telematics will enhance vehicle performance, revolutionise user experience and change the game for the industry.
The possibilities are endless when you have the right data at your fingertips. We’re excited to welcome a future that’s driven by insights and innovation and where new value creation is possible.  

Whilst we never encourage the adoption of new tech for the tech’s sake, it’s clear that telematics has wide and exciting potential. They can benefit different users, from customers to employees, whilst appealing to business leaders looking to increase productivity and reduce operational costs.

What separates success from failure is knowing when and how to best use the technology. This is where strategy comes in. Selecting the right partner in your journey is critical, one that can support you on technology but also understand and cares about your commercial success. A partner ready to explore where the existing market is, what your competitors are doing, and where the boundaries of the existing market are. We are helping our clients to create value at the very edge of the market, expanding into new areas where they will be able to lead the way and innovate, in this brand-new era of value creation. 
 

 

How we help you meet those challenges

Kin + Carta offers holistic thinking that combines strategy, product, design, technology and data to ensure the success of our clients. Our teams can work alongside your teams to modernise legacy systems and establish internal capabilities and improved ways of working.

  • Creating a data foundation: We help our clients put data at the heart of their business. No matter the level of data maturity, our teams can support you in reaching your goals.
     
  • Intelligent experiences: We are famous for creating incredible customer experiences, building real-world solutions, and award-winning digital products. We can help you to unlock potential - bringing together content and commerce on a platform for growth.

  • Creating products that matter: Our team can deliver your data-driven product development initiatives that have a real impact on your business. Our transformative work with TfL using technology to test train brakes without the need to stop the service allowed TfL to reduce costs whilst keeping the service running. With Ford, we added value by using telematics to help Ford Fleet Solutions customers communicate directly with their Fleet Manager to minimise downtime and provide the assurance fleet professionals needed. 

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