Auto Manufacturers Need to Better ‘Connect’ with Consumers
We needed a new car. The sport utility vehicle my wife had been driving for about nine years was pushing 200,000 miles. It needed a new “this” and a new “that,” and had basically become a bucket of bolts.
We traded it in for $1,000 (lucky to get that) late last year and purchased a new 2019 vehicle. Eight years is an eternity when it comes to the technology of an automobile, especially these days, so my wife was impressed with all the new bells and whistles on the base model of the new car. But the problem is the people at the dealership where we purchased the vehicle didn’t elaborate enough on some of those bells and whistles and what they can do.
For instance, my wife needed help syncing her phone to the car’s infotainment system. She wasn’t even instructed on how to do that. Overall, she just didn’t feel like the salespeople did a good job of selling her on the vehicle’s capabilities.
Fast-forward to a few weeks ago when I read a news report about how the global auto industry plunged deeper into recession in 2019, with sales declining 4 percent. There are many reasons for this, including the fact that there are just too many cars on the road.
But a few days later, I came across a study from Kantar, a data insights company, reporting about how the gadgets on connected cars — vehicles equipped with features that allow them to connect with other devices inside the vehicle or to networks and services outside the car — are being underutilized because their owners have a low awareness and understanding of the technological features available to them.
Pardon the pun, but I couldn’t help but wonder if there’s a “connection” between the news report about declining car sales and Kantar’s findings.
Kantar’s research on the topic dates back to 2017, when it conducted a study of 8,500 connected car owners across Europe, North America and China to explore the impact of technology on people’s buying decisions, attitudes and usage. Get this: Kantar found that 47 percent of connected car owners didn’t even know they had a connected car and 25 percent of car owners weren’t actively using their cars’ connected features.
Late last year, Kantar revisited the topic and surveyed 4,500 car owners from nine countries, including the United States. Kantar found that “although progress has been made in many aspects of connected-car awareness, owners are still unsure about the benefits they can access.”
Kantar concluded that car manufacturers are still not effectively communicating the benefits of connected care technology and how to use it. That’s what you call leaving money on the table.
“China is the exception,” Kantar stated in the report. “Drivers there use the connected car features available much more frequently and are more willing to pay for them, which generates stronger return on investments for the manufacturers.”
In the 2017 study, Kantar concluded that connectivity on its own was low on the list of purchase considerations, but it was up to manufacturers to show its value by linking it to real-world benefits. One of those benefits — and it’s a big one — is increased safety. For instance, by using voice-command assistants available on connected cars, drivers don’t have to pick up their phones to make calls or send texts.
Another benefit is convenience: A connected car’s navigation system may have a traffic monitoring feature that can alert drivers of construction projects causing traffic jams.
But connectivity is still not related closely enough to a clear benefit for car buyers to regard it highly in their purchasing decisions, Kantar reported in the updated study. While the willingness to buy connected cars is growing in most markets, only a little more than 50 percent of Americans are willing to buy a car with connected features. Kantar said “a real opportunity” exists in the U.S. to sell more connected cars but “promotion and education are required to convince car buyers about the value of connected features.”
Three years ago, Kantar traced consumers’ lack of awareness of connected features to not being educated about them and having them demonstrated at dealerships. However, it found that dealers are doing a better job of explaining them today.
“On average, the level of awareness of connected capability increased in the U.S. by around 10 to 15 percentage points in just two years,” Kantar found. “On average, two out of three drivers are now aware their cars are connected.”
Kantar learned that once drivers understood the benefits of a certain connectivity, it became an essential part of their driving routine. “And because they don’t want to ‘re-learn’ different systems in other brands, it kept them loyal to the manufacturer they were familiar with,” Kantar noted. “And, more than that, it’s an incremental revenue opportunity as [drivers] were happy to keep paying if the service was subscription-based.”
There has been an unmistakable disconnect between auto manufacturers and their dealers in educating consumers about the benefits of connected cars. The good news is that divide is narrowing. But as connected cars become even more high-tech, their gadgets will become even more complex for consumers.
The best practice takeaway for manufacturers in this instance is as clear as a car horn is loud.