What OEMs Need to Know About Innovation
Consumer research shows that auto customers consistently cite innovation—generally and in specific areas—as a major consideration in their purchase decision. Here are some questions OEMs need to answer when it comes to satisfying the growing consumer demand for innovation:
Q: What makes an auto company stand out to today’s consumers?
A: Consumers value innovation in automobiles and want to buy cars from companies they perceive as bringing new technologies to market. Almost 60% of auto customers say innovation is a very or somewhat important consideration when choosing a new car.
Q: What are consumers’ top priorities in innovation?
A: Connectivity, safety, and fuel economy are most important to consumers, and they’re willing to pay for innovation in these areas. More than 50% of consumers believe active safety should be a top priority; 45% see technologies to improve fuel economy—including hybrid power, electric power, and gasoline-engine enhancements—as very important; and a majority rank connectivity features among the top five desired options.
Q: How important is the connected car to consumers now—and in the future?
A: The car and consumer electronics are converging—with far-reaching ramifications. Adding cellular connectivity and a Wi-Fi hub to a vehicle today costs less than $50 in incremental components per vehicle. When fully autonomous driving becomes a reality, the car will become a fully connected extension of the home or office.
Q: Which new technologies should OEMs and suppliers develop first?
A: Technologies related to active safety, connectivity, fuel efficiency, and emissions reduction should be at the top of the research agenda. OEMs will also need to expand their R&D capabilities in electronics and software—areas where the market for talent is tight. Tier one suppliers are also becoming increasingly important in bringing innovations to market. This is a potentially tricky issue for OEMs, as these suppliers will develop and own intellectual property they’ll use for their own marketplace differentiation.
BCG