GM Goes All In on Connected Vehicles
The automaker is betting it can improve the driver and passenger experience through integrated mobile services.
The past few years have been a tough time for GM. The automaker took a large hit in profits after recalling about 30 million cars and trucks last year. The most serious recalls were related to a defective ignition switch in 2.6 million cars that has been tied to 100 deaths. And even though GM sold a record number of cars worldwide, its financial earnings dropped 28 percent in Q4 last year.
While its current situation is less-than-ideal, GM is planning for a connected future. Connected cars represent an opportunity for the car maker to improve the safety and experience of owning its cars. By 2020, about one in five vehicles on the road worldwide will have some form of wireless network connection, amounting to more than 250 million connected vehicles, estimates Gartner.
“The connected car is already a reality, and in-vehicle wireless connectivity is rapidly expanding from luxury models and premium brands, to high-volume midmarket models,” says James F. Hines, research director at Gartner, in a statement. “The increased consumption and creation of digital content within the vehicle will drive the need for more sophisticated infotainment systems…new concepts of mobility and vehicle usage will lead to new business models and expansion of alternatives to car ownership.”
Last year, GM began offering 4G LTE-equipped vehicles starting with the 2015 Chevrolet Malibu, which it followed with more than 30 other Chevrolet, Buick, GMC, and Cadillac models. The majority of the company’s cars offer connectivity features, and by the end of 2015, GM expects to offer about 40 models with Wi-Fi connectivity.
When customers are comparing car features, “we’ve found that in-vehicle technology is up to three times more important than traditional measures such as fuel economy and horse power,” says David Mingle, executive director of global connected customer experience program execution at GM. “Customers want to be able to bring their digital life into their vehicle and vice versa.”
Even before Wi-Fi-enabled cars became popular, GM was already connecting owners to their cars through a mobile app, Mingle adds. For example, the OnStar RemoteLink Mobile App lets drivers unlock their car, start it remotely, set navigation routes, request directions, and track vehicle diagnostics like the fuel level and tire pressure. The company also added other app features such as the ability to manage Wi-Fi hotspot settings.
In this year’s first quarter, the RemoteLink Mobile App handled more than 30 million user interactions, compared to 20 million interactions in all of 2013. “In the first 90 days of this year, we’ve seen the app being used far more than it was in 2013, which points to very rapid growth in mobile,” Mingle says.
As part of the move toward connected cars, GM is extending its mobile-focused capabilities with a new service. Earlier this year, OnStar unveiled AtYourService, a concierge service that connects drivers with retailers while driving.
Through partnerships with Priceline.com, Dunkin’ Donuts, and other retailers, owners use AtYourService to connect with an advisor who will help them find and book hotel rooms, locate restaurants offering discounts, and other actions. When a driver requests directions to a point of interest that has a deal or connection to one of its partners, the advisor can send the offer from that merchant. For example, drivers can get digital coupons sent to them for nearby stores and restaurants and information about available parking spots through a partnership with Parkopedia.
At this time, the coupon offerings and hotel recommendations are not personalized for each driver, but the service will eventually include customized features as it adds more partners and gets more user data. “We don’t have advanced KPIs yet like data that links [AtYourService] to loyalty, retention, and behavior,” Mingle says. “But as usage goes up, we’ll be monitoring the activities people use it for and linking it to CRM data to identify opportunities for better engagement and driving loyalty.”
Additionally, GM is using predictive analytics combined with a car’s Wi-Fi connection to provide advanced diagnostics for its cars. Electronic components that send out signals when they’re about to fail can alert owners to get the part fixed before it becomes a problem. Car owners who sign up for the service through OnStar can have their vehicle automatically check the condition of its engine, transmission, antilock brakes and more and email the results to the owner. “We can notify a customer that in about 30 days their battery may need to be replaced and allow the customer to schedule the service before the failure occurs,” Mingle says.
Advance notifications of necessary repairs and upgrades could potentially reduce the time and money spent on automotive repairs. Automakers for example, can get a more accurate estimate of which parts they need to have in stock for repairs, and car owners can have minor issues fixed before they escalate.
Connecting with dealers
As GM introduces new technology and services to its cars, it is helping dealers stay up to date on the advances with increased training and resources. That includes Connected Customer Specialists who visit dealerships in their region and educate new customers on how to use their vehicle’s technology. In the past three years GM has more than doubled its team of Connected Customer Specialists and is up to 55 specialists in the U.S. and seven in Canada. Dealership employees are also participating in the training, with more than 25,000 sales and service dealership employees in the process of completing training.
As for the demographic that is most interested in connected cars and Wi-Fi features, Millennial car buyers are showing a slightly higher interest, but other age groups aren’t far behind, Mingle says. “More people are becoming aware of the benefits [of a connected car] and as the technology matures and more types of features and apps become available, we expect adoption will continue to grow.”
Looking ahead, the company is exploring partnerships with Apple’s CarPlay and Google’s Android Auto systems, which integrate phone features into a car’s onboard display. It is also watching emerging technology trends closely, looking for other ways to improve the driver experience. While GM doesn’t have an immediate plan for integrating with the Apple Watch, for example, that doesn’t mean it couldn’t in the future, Mingle notes.
“In everything we do, we have to make sure we’re putting the customer in the middle,” he says. “And if people choose to communicate with their car through a device like a smartwatch, we have to be prepared for that.”