How Consumer Tech Will Influence Car Buying
"I predict that people have been taught now by the smartphone industry, and other consumer electronics industries that, if they want new features, they're going to need to change faster," says Kurt Hoppe, General Motors' global head of Innovation.
It may be hard to believe that General Motors launched what is considered the first Connected Car platform, OnStar, 21 years ago. And as the auto giant and its rivals have shown recently, they’re not leaving the future up to tech companies to push the concept forward into the mainstream.
For much of the past two decades since then, the wider automotive world has been gradually advancing the Connected Car concept in the mainstream, along with autonomous vehicles, shared mobility, as the next phases of transportation and technology that includes the broader changes coming from the Smart Home and Smart Cities.
To put the Connected Car into perspective, Gartner has estimated that, by the year 2020, there will be 250 million connected cars. At that point, Connected Cars are expected to make up 75 percent of total car shipments worldwide in 2020, compared with just 13 percent in 2015, Gartner research said last year.
In a conversation at The LBMA’s Retail Loco and then with GeoMarketing last month Kurt Hoppe, General Motors’ global head of innovation, discussed GM’s own continued progress on the Connected Car as well as the rise of its shared mobility unit, Maven.
In addition, Hoppe talked to us about the role of voice activation in the connected car. With the race for dominance of the Smart Home and Connected Intelligence/Knowledge Graph currently being waged by Amazon’s Alexa, Google Assistant, Apple’s Siri, Microsoft’s Cortana, and Samsung’s Bixby, Hoppe emphasized that GM was not in the business of picking a winner when it comes to extending voice activated assistants to the Connected Car.
“Our belief is that consumers should have their choice and be able to use their favorite virtual assistant,” Hoppe said. “Today, we support the assistants within Android and Apple CarPlay. There’s a hard button in the vehicle that you can press and then submit your utterance.”
That said, GM is focused on crafting an advantage for voice activation within its cars, Hoppe added.
“There’s a road map coming for various kinds of support,” Hoppe said. “Today, we’re able to leverage whatever is already on the device. We have a very high quality microphone that’s designed to pick up and understand the right voice even at highway speeds.”
On The Role Of AI In Cars:
In terms of how we’re bringing marketing message to the end consumer, we’ve got an application both in the so-called “head unit”, which is in the dash, as well as in a mobile app called AtYourService. It’s able to create offers and coupons based on your location.
We announced a relationship at the end of last year with IBM Watson, which uses AI and can understand a consumer’s location patterns. Assuming that you, as the consumer, have opted in to that service, it can notice you go to Dunkin’ Donuts on Monday mornings, or that you go to your favorite restaurant on Thursday nights. It can then present the right kind of offers that are relevant to you.
If you’re a merchant in retail, fuel, hospitality, food or other, you should come and talk to us about our marketplace. It’s essentially a B2B opportunity where we can work behind the scenes to co-create services and products with merchants that want to promote their services to the millions of vehicles we serve.
On the scale of the Connected Car:
Between the different GM brands, Cadillac, Chevy, GMC, and Buick, GM in the U.S. has somewhere between 16-18 percent market share.
We sell about 3 million vehicles a year – and almost all of our retail vehicles in the U.S. and Canada come with OnStar and 4G LTE connectivity. Globally we have more than 6 million 4G LTE connected vehicles on the road. Our competitors are only now starting to make their vehicles connected.
At today’s quality levels, an average car lasts 11.5 years, but that’s not usually with the original owner. The original owner usually only keeps a vehicle for six and a half years, before they feel: “I need something new.”
I predict that people have been taught now by the smartphone industry, and other consumer electronics industries that, if they want new features, they’re going to need to change faster. So, I actually think the 6.5 years of ownership is going to contract, and people are going to perhaps do leasing models more. Maybe you only want to commit to a vehicle for two or three years and then let someone else buy it, thinking “I want the newest, latest, greatest tech.”
That tech factor is a key factor when you’re buying a car now, and it spans demographics. Of course, it skews a bit younger, but 60 percent of people going into dealerships today who are wanting to buy a car care more about the tech and the audio/visual experience than the engine size or some of the more traditional performance elements. So, it is fundamental for us to continue to move fast and innovate, but also to have the ability to upgrade vehicles post purchase by leveraging the 4G LTE connectivity.
Using Tech To Promote Safer Vehicles:
It is our core focus to give our customers choice, but we want to do so in a safe and convenient manner. Whether it’s Android Auto or Apple CarPlay support, or in-dash apps, we have implemented a driver distraction framework that follows the most stringent global distraction regulations.
Our amazing vehicle teams are adding more and more safety systems.to our vehicles so they can detect if a pedestrian or another obstruction runs in front of a vehicle. It takes humans 500 milliseconds to react and slam on the brakes, but if you’ve got a combination of cameras or high frequency sensors, or radars, the car can react and brake in only 100 milliseconds – 5 times faster.
On the role of voice activation:
Voice is something we’ve supported for a while.
I’ve been a big proponent of voice for many years, working to bring conversational voice interfaces to the living room and other devices. In the vehicle, being able to verbally call people through an integration with your phone and address book is something that exists today. Being able to navigate your entertainment system, look up your favorite radio station, music, podcast or audio books, is continuing to improve.
GM’s opinion is that the consumer should choose what voice system they want. You shouldn’t have to learn a new system if you buy a new brand of a car – the customer has already learned how to work with Siri, or with Alexa, or with Cortana or with the Google Assistant, or Samsung’s Bixby.
The customer already has a favorite assistant, so the industry should let them continue to use that, both from their home and in their car. My mother who’s living in Toronto and older, she’s got Alexa on her Echo, she has Netflix, and she has a smartphone. She’s a “Connected Consumer”. But trying to tell her she needs to learn a new language to operate her new car, that doesn’t seem fair. She should be able to bring her chosen assistant with her. That’s our line of thinking.
On balancing privacy with relevance:
There are amazing opportunities around data. If there’s a good value exchange, we do see consumers saying, “Yes, please take my data, I’ll openly let you know when I do hard braking, when I drive after midnight, when I speed over 80 miles an hour – I will let you have that information, if you give me some value in return.
We have a program we launched last year on new vehicles. It’s called Smart Driver and for GM vehicles that opt in, anonymized data is captured and we give advice and a daily score to the driver saying, “Oh you drove fast, you drove slow, you swerved, and you did this, so here are some relevant tips to be a safer driver.”
Then after a few months we can say, “Oh we noticed that you are a smarter driver now, and you’ve got a score of 85. Based on that, we think you can actually get $100 or $200 discount on your car insurance. Will you give us permission to share your personally identifiable information with an insurance company or an insurance marketplace so you can get a discount?”
Consumers are willing to share their data if they get some value in return.
Just to circle back quickly to the security side, again it’s not my focus area, but there are dedicated teams at GM working on cybersecurity. Vehicles are a specialized device compared to a smartphone or a set-top box or a smart TV. Those other consumer electronics devices can’t drive at 85 miles an hour and accidentally cause injury or harm or death.
Because of that, GM has architected the automotive sub-systems to be separated, so your infotainment system or your audio/visual entertainment system, is completely separate from your braking system, for example, so even if a developer has the API to change radio channels, it’s not connected to the brakes at all, so they can’t touch the brakes.
On The Impact Of On-Demand:
It’s definitely a smaller space right now, a more niche space. But it’s part of the future that we’re aware of, so we are investing there.
GM has four pillars, and one of them is urban mobility also called “sharing.” We know the population is moving to cities and it’s trending toward experiences you see in New York, Tokyo, and London, where people may not want to have the pain and cost of having a vehicle that they only use on weekends. Maybe they just need to jump in an Uber or a Lyft to quickly get across town to a restaurant or an appointment; or maybe they prefer to take public transit to work.
So, we’ve got our Maven brand, which is our brand for sharing. There are three flavors of Maven right now.
Maven City, which is car sharing, and it is in 17 cities now. It’s kind of like Zipcar or Car2Go. You just download the Maven app, which helps you reserve your car, unlock your car, and even start your car – you don’t need a key or anything. You then pick your car up at a station and you drop it off at another station. So, that’s live today and growing – doing really, really well.
Second is Maven Home which is being tested in some major urban centers like New York. You get a small pool of Maven vehicles for your high rise, so let’s say 200 condos in this building have five or however many vehicles to share and they sign up with the app and check out cars with it.
Third, is the delivery idea. We have something called Maven Gig, which is for the “gig worker,” and those vehicles can be rented by the week or by the month, and you can go make money with that vehicle by driving for ride-sharing companies or food or package delivery services.
So, if you want to go drive Lyft or deliver Instacart, you can use Maven Gig for that.
So, we’re definitely supporting sharing, and we’re also experimenting with other things too.
In New York, our Cadillac team a year ago, launched a test called “Book by Cadillac”, which is a vehicle subscription service. You pay $1,500 a month, so that’s for a certain clientele, and now you get a Cadillac subscription.
You can pull up the app or you can call up 1-800-Bookbycadillac, and they will drop a nice new vehicle off for you. If you wanted a white Escalade SUV, or a black Cadillac convertible, they give it to you, and then you’re allowed to exchange it 18 times a year, whenever you want.
For example, you could even say “I’m going to JFK to drop my car off, since I’m going for a month vacation in San Francisco.” You pick up your favorite vacation Cadillac when you arrive, and everything is included: insurance, maintenance, data, everything’s all built in.
We’re experimenting and refining that too. It’s been successful and we’re expanding it. There are a few of our competitors in the last month or two that are trying this as well now, so that’s a complement to our innovation.
So, that’s where we are today: GM recognizes vehicle ownership is changing, and we’re looking at multiple ways we can support that change, by leveraging our 4G LTE Connected Cars, our advanced driver assistance systems, new EV options, and car-sharing. It’s about delighting our customers while eliminating crashes, emissions and congestion.