In this articleWhat is data?
In marketing and customer retention terms, it is information about your customer base: names, addresses, phone numbers, email addresses, how often they buy a car, whether they buy new or used and how frequently they have their car serviced.So who owns the data?
That is the question no one has yet resolved, and one that needs answering sooner rather than later.What does it all mean?
Another report, compiled by executive search firm Russell Reynolds Associates, argues that these technological advances will force auto industry leaders “to evolve into tomorrow’s mobility leaders”.The future is here
The Tesla Model S already communicates in real time with Tesla headquarters.
We live in the Information Age. Anyone with a passing association with marketing will be aware of the ‘D-word’: data. The battle for who owns the data generated by vehicles shapes as one of the most significant in the automotive industry.
Independent service providers and repairers have lobbied the federal government hard to legislate on the matter. The Australian Automotive Aftermarket Association (AAAA) pushed for a Federal Government inquiry into data sharing between manufacturers and independent repairers and aftermarket suppliers. Their concern is obviously that manufacturers will not share vital vehicle data, locking independents out of service/repair opportunities.
The Government put it back onto the industry, asking it to examine the issue of who owns the data generated by vehicles and who should have access to it.
Stakeholders, including the Federal Chamber of Automotive Industries (FCAI) and the AAAA, negotiated a Data Sharing Code of Conduct over 18 months, but when an agreement could not be reached the FCAI released its own voluntary code. This displeased the aftermarket association, which called for the government to impose a mandatory code.
In November 2012 the Commonwealth Consumer Affairs Advisory Council reported the following regarding vehicle data:
“Motor vehicle designs have become increasingly complex, driven by rapid technological change and innovation. As a result, automotive repairers have become increasingly reliant on technical information and diagnostic systems. Not all information relevant to automotive repair is shared in an unrestricted manner. Some stakeholders have suggested that this may limit the ability of independent repairers to compete with dealerships.
“The report has found that the need to access specialised repair information has the potential to become a barrier to entry in the market for repairs. While it is not currently preventing competition in this market, policy-makers should closely monitor the ease with which vehicle repairers can access such information and be prepared to act if necessary.”
AADA board member (and former chairman), Ian Field, says service and repair data is already available.
“That’s never hidden – that’s not what this discussion is about. We’re talking about data the vehicle collects on usage,” he said.
“Those who would use this discussion as a smokescreen to pretend that data is not available, they’re talking about privacy data, not technical service and repair information, which is readily available for those who are prepared to pay for it.”
As for other data regarding how a vehicle is used, Mr Field says there are issues of privacy to be considered, as well as considerations the auto industry has never before faced.
“There are privacy issues; there are issues about whether the factories should know where every car’s been. I don’t know how we answer those questions, quite honestly. This is the new world we live in, this 21st-century world, and we have not yet worked out what the rules should be.”
Parties are due to meet again in March or April to see if they can agree to a resolution. If manufacturers and Dealers continue to guard their data, the Australian Competition and Consumer Commission (ACCC) could potentially become involved to determine whether that behaviour is anti-competitive.
What is data?
In marketing and customer retention terms, it is information about your customer base: names, addresses, phone numbers, email addresses, how often they buy a car, whether they buy new or used and how frequently they have their car serviced.
Modern vehicles now generate information not just about the car and its various parts, but also how the vehicle is used. Data can tell you, for instance, that a family of four takes long road trips and they have had their car six years. Your sales team could use this information to try to sell them the latest people-mover, with back of seat screens and a few Pixar DVDs thrown in.
Automotive manufacturers have begun to reposition themselves as ‘mobility companies’, as cars become more and more connected to the internet.
The rise of the internet has allowed companies to access even more information about consumers: their hobbies, interests, family, where they go (via GPS) and more.
More central to this debate is the growing set of data generated by vehicles themselves. On-board diagnostic computers report on engine performance and parts wear, communicating this information to a central database.
On-board diagnostic ports (OBDs) were originally installed and designed to deliver data exclusively to Dealers and manufacturers, but independents worked out how to attach transmitters to OBD ports in order to send information to a central database.
To counter this, manufacturers could bypass OBDs and use wireless technology to deliver data directly to their own databases, cutting third parties out altogether. The car could tell the database when it needs a service, what parts need replacing, when wheels need alignment, tyres need rotating – pretty much everything to do with the operation and maintenance of the vehicle. This is what the AAAA fears and why it wanted the Government to legislate.
Studies show that the collection and use of data is the next big paradigm shift in how business of all kinds is conducted.
Capgemini Consultants found that:
- 64% of companies believe that big data is changing traditional business boundaries
- 58% expect to face increased competition from start-ups enabled by data, and
- 24% of companies report disruption from new competitors moving into their industry.
“Profiting from big data is at least as much about organisational integration, change and evolution as it is about the underlying technology,” the report said.
So who owns the data?
That is the question no one has yet resolved, and one that needs answering sooner rather than later.
The amount of data generated by vehicles is only going to rise with the development of autonomous, self-driving vehicles and technology that allows cars to ‘know’ where other traffic is on the road.
Self-driving cars are inevitable but, as with the adoption of any new technology, there will be bugs and issues that need to be ironed out. One of the major potential stumbling blocks is when one of these vehicles is involved in an accident.
Vehicle data might very well be able to tell us exactly what caused the accident, but who owns that data? Is it the car’s owner, the Dealer or the manufacturer? Who will be held responsible – the maker of the part that caused the accident or the vehicle manufacturer? Will drivers be absolved of any blame or will they have a responsibility to maintain some control over their vehicles? Vehicle data shapes as crucial evidence in lawsuits.
Then there is the question of leasing: who owns the data in that case?
A recent study by McKinsey & Co., titled “Competing for the connected customer – perspectives on the opportunities created by car connectivity and automation,” suggests drivers are currently unconcerned about data ownership.
“Already today, a large majority of consumers very consciously share their personal data with their smartphone software manufacturer; only a quarter of customers categorically refuse to let OEMs use their driving data,” the report stated.
“That said, consumer privacy will remain a focal point of interest for consumers themselves as well as most likely for regulators. Thus, car manufacturers and suppliers should continue to take this issue very seriously and offer the appropriate safeguards.”
What does it all mean?
Another report, compiled by executive search firm Russell Reynolds Associates, argues that these technological advances will force auto industry leaders “to evolve into tomorrow’s mobility leaders”.
“To build new skills and perspectives quickly, we recommend hiring from industries that already have undergone a significant disruption, such as the mobile phone industry,” the report said.
The future is here
The Tesla Model S already communicates in real time with Tesla headquarters. Its systems are wirelessly updated frequently and Teslas can also communicate with the company’s Supercharger network.
This issue is still in its infancy but, as you can see, it has enormous potential ramifications for Dealers. Stay tuned.