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Study: Consumers want intelligent, connected hybrid cars

Posted: 15 Aug 2008 ?? ?Print Version ?Bookmark and Share

Keywords:telematics? automotive industry? hybrid car? navigation system?

The IBM Automotive 2020 Study, based on a global collaboration with 125 automotive industry leaders, found an industry grappling with significant change driven by increasingly sophisticated consumers.

As consumers seek out a comprehensive mobility experience, industry experts predict that flexible transportation services will replace the purchase of personal vehicles for multiple uses, and intelligent vehicles will cater to consumer demands for greater information, safety, and environmental responsibility.

Consumers continue to become better informed and more demanding and they will drive transformation in the current purchasing model for vehicles. The study found that consumers will expect to purchase or lease a vehicle that comes with flexible access to a diverse "garage" of vehicles. In the current model, consumers are often restricted by finances and buy a compromise vehicle, or they buy a car with features that don't get used.

In the new model, consumers will drive a primary vehicle that best meets their daily needs, and have the option to change to a different model, as needed. For example, someone may drive a small, fuel-efficient vehicle during the week, but have access to a sport utility vehicle for a weekend ski trip or a luxury sedan to attend a wedding.

"Basic transportation will no longer be enough for increasingly empowered consumers. They want an automotive experience that matches their lifestyles and lets them move seamlessly from life inside the vehicle to their world outside," said Sanjay Rishi, VP and global automotive industry leader for IBM.

The IBM Automotive 2020 Global Study is based on interviews with 125 executives in 15 countries from automotive OEMs, suppliers, and other thought leaders. Eighty-five percent of the top automotive companies worldwide ! including all of the top 10 ! participated. The study, entitled "Automotive 2020: Clarity Beyond the Chaos," was developed by the IBM Institute for Business Value to determine the needs of and anticipate industry response to the changing automotive ecosystem.

Intelligent, connected cars
Consumers are demanding more information and entertainment from their vehicles, as well as increased safety, economy, and environmental responsibility. This is spurring the manufacturing of "intelligent" vehicles!cars and trucks that use electronics to provide greater assistance with navigation, and provide more information about the vehicle, its environment and connectivity. Technologies that will have a growing presence in vehicles by 2020 include telematics, including remote vehicle prognostics and active safety (capabilities that sense and respond to driving behaviors and road conditions); a wide array of entertainment choices such as data downloads and streaming media; and power train innovations.

Consumers will benefit from connectivity between their vehicles and other vehicles as well as road infrastructure. Information captured from breaking patterns ! for example, from vehicles approaching a recent accident ! will be transmitted to other vehicles. Alternate routing options delivered dynamically will help consumers avoid congestion and delays, and active safety features will enable crash avoidance.

Demand for hybrids
Alternative power will see continued innovation that extends far beyond 2020, with hybridization and battery technology leading the drive toward environmentally sustainable transportation.

Micro, mild and full hybridization are currently undergoing extensive development today, and study participants believe that by 2020 all new vehicles will have some level of hybridization.

The study also found that hydrogen fuel-cell vehicles will remain a viable alternative, but projections put only a small fraction of vehicle production migrating to this technology by 2020, due to cost-prohibitive processes and new infrastructures. Bio-fuels will also see their share of investments, and non-food-based bio-fuels will grow.

Automotive imperatives
Based on the Automotive 2020 study and related research, IBM has defined five imperatives that are likely to distinguish the outperformers in the automotive world of 2020:

Advance mobility!Auto companies must embrace new mobility models, such as new ownership and usage models and integration of other modes of transportation.

Transform retail!Auto companies and dealers will need to find new ways to connect with sophisticated consumers and develop a new value proposition for dealerships.

Simplify complexity!As vehicles become more connected and intelligent, their electronics and embedded software become more complex. IBM recommends that OEMs establish common processes, and standards so to enable innovations from traditional and non-traditional suppliers to be rapidly integrated.

Partner extensively!To address the increasing cost of innovation, companies need to widen their enterprise innovation networks and extend the partnering concept to go beyond the current suppliers. Close relationships with companies in other industries, especially electronics, energy, and utilities, will become a necessity.

Execute globally!OEMs and suppliers should create balanced, flexible operations aligned with local economies while having a positive social impact wherever business is done.

"In the face of such significant and chaotic change, finding clarity will require the automotive industry to take sweeping and rapid action. Two of the greatest areas of opportunity are meeting consumer demands for environmental accountability and using technology to transform the way the industry develops products and goes to market," said Rishi.

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