Economic Times: August, 2015
New Delhi: Internet-enabled cars now present a $30-billion market for a bunch of sectors in India. By 2020, that market is poised to grow nearly six times.
IT services firms: $55 billion
Indian IT companies such as Infosys, TCS, Wipro and HCL are working with major global carmakers, auto parts suppliers, insurers and content providers to integrate technology and find solutions for the connected car. "It's a very big bet for us," says Sudip Singh, global head, engineering service, Infosys. "We are making significant investments and recruited around 500 in the recent past."
Infosys has customised a telecom solution it developed called Application Platform for connected cars. This is how it works: as a customer gets into the car, the dashboard interfaces with the mobile phone to access apps.
Infosys has also partnered a tech startup to monitor driving behaviour using a Telematics Dongle as an aftermarket solution to auto insurers. The company is also working on an R&D joint venture with Microsoft and Japanese carmaker Toyota to deliver driver safety solutions. The aim is to keep the driver focused on the road without sacrificing any benefit offered by on-board information systems. On the cards are advanced driver assist systems such as drowsiness detectors, fatigue detectors, back seat entertainment etc. "This would be the next wave of value to the consumer," says Singh.
Rival Tata Consultancy Services (TCS) has begun integrating navigation systems, smartphones and external devices such as memory sticks to help consumers gauge the health of the vehicle and offer customised solutions, even as it retains control over safety and security. Regu Ayyaswamy, global head, engineering and industrial services, TCS, says the IT content in cars has increased tremendously — almost 10 times the old-generation cars'. TCS is also working on next-gen infotainment systems for carmakers such as BMW and Mercedez.
Wipro is specifically working on an infotainment system. The system aims to give the driver an interface as good as his phone for entertainment. Through analytics, it will also alert the driver to potholes, traffic and over-speeding. HCL, for its part, is working on a service that will predict consumer driving habits which can help insurers decide on premiums.
Auto parts firms: $30 billion
The lure of the connected car is pushing automotive engineering companies to hone skills in web technology, chip design, and embedded systems, starting with smartphone integration.
According to officials of German engineering company Bosch, automated driving will be ushered in by the booming market for driver assistance. In 2016, sales of driver-assisted cars are expected to exceed one billion euros. Last year, Bosch set a record by selling more than 50 million surround sensors for driver assistance systems. The number of radar and video sensors sold doubled in 2014 - a feat poised to repeat in 2015.
A pilot for automated driving on freeways has been targeted by the year 2020. Dirk Hoheisel, a member of the Bosch management board, says with this system, his company will make the transition from partly to highly automated driving. "Drivers will become passengers. That will mean greater comfort, and above all greater safety."
According to forecasts by Bosch accident researchers, increasing automation can significantly reduce accident figures even further - by up to one-third in Germany alone.
Telecom firms: $30 billion
The ability to surf the web on the go is just one aspect of automobile connectivity. A far significant advancement lies in the communication between cars, between cars and other devices, as well as services delivered over the internet, sometimes referred to as the socalled "car-to-x" communication. Today, only a small fraction of cars are web-enabled. But in less than a decade, that number will grow significantly.
Telecom providers are prepared to cash in on this opportunity by improving their network infrastructure. For example, Vodafone is working with Accenture, Huawei and Porsche to integrate machine-to-machine (M2M) technology to power internet applications. The Porsche Panamera is being equipped with telematics systems for vehicle management, safety, and security and even tracking mileage, speed, and other factors for usage-based auto insurance. The car is synchronised with a smartphone so that users can monitor automotive diagnostics, mileage, streaming music, playing audio books, navigation aids and security improvements to their vehicles.
Vodafone recently bought Cobra Automotive Technologies, which will help improve car security, telecommunications and vehicle tracking.
Insurance firms: $15 billion
Insurance companies spend nearly 65% of the money from premiums on clearing claims and after deducting agent commissions, and other overhead expenses are left with a 5-10% profit. The connected car will change that. Examining driving behaviour can transform the way insurers make underwriting and pricing decisions, help them respond faster after accidents and collect forensic data for investigating claims.
"With this technology insurance companies have a proven measurement and this can reflect in pricing over a period of time," says Segar Sampathkumar, general manager, New India Assurance.
Usage-based insurance (UBI) will be a key driver to cars becoming internet-enabled. Safe driving habits are likely to have an even bigger role in driving UBI, or "pay as you drive" as it's often called in Europe. Progressive Insurance in the US has collected over 10 billion miles of driving data with Snapshot, its Pay As You Drive program after introducing its first wireless device.
Also, sensors in cars will provide data about the location and usage patterns of the vehicle and therefore a more accurate fix on the risks of theft and accidents.
Chipmakers: $40 billion
Chipmakers are at the forefront of the innovation push towards creating connected cars. Microprocessors or chips of companies such as Freescale, NXP, Renesas Electronics, Texas Instruments, Nvidia, Infineon Technologies are the lynchpins of a variety of services such as improving fuel efficiency, safety, security, infotainment or the climate in cars.
Basic micro-processors are used in cars to carry out tasks such as operating windows and determining the fuel mix. The more complex ones continuously scan the roads for hazards by processing information from onboard cameras and satellite systems to make the drive safe.
Early this year, Dutch chipmaker NXP acquired American Freescale and the combined entity, Freescale NXP, is now the largest supplier of chips to the auto industry. The current focus areas for Freescale include technologies to enable Internet of Things and Advanced Driver Assistance Systems (ADAS). "ADAS is the first step to a driverless car. To achieve that, cars have to mimic the human brain. That's possible with automobile radar and vision systems working together," says Sanjay Gupta, director for R&D, Freescale Semiconductor. A radar continuously informs about traffic around it. The car's vision comes from onboard cameras.
Nvidia recently launched DrivePX, an autopilot computer which takes data from 12 cameras around the car to sense and interpret what is going around the car. Not surprisingly, for future cars, selecting the right silicon chip will be as critical to performance as selecting the right quality of steel.
That's the global story. The India story could play out differently. "Globally we are at the beginning of a connected car revolution. In India, it's about a decade away," says Gupta. The dim scene is because of infrastructure bottlenecks — such as the lack of digital maps and GPS systems in cars.