Automotive Report

Connected Automotive Economics: A New Approach for OEM Pricing Practices

Connected vehicles are here to stay. And now that the vehicle is a “connected device,” consumers demand services with the same kind of functionality and benefits their other devices offer.

However, some automotive OEMs still find it difficult to actually sell connected services: some suspect that demand is overestimated; others are concerned with lower-than-expected subscription renewal rates. There’s a mismatch – but why? Are consumers generally unwilling to pay for connected vehicle services? Or is the current offer simply not appealing?

Covisint recently commissioned a consumer research study with CGS Advisors, LLC, to answer these questions and more. This research study “Connected Automotive Economics: A New Approach for OEM Pricing Practices” explains why connected services are drastically changing the rules of the game for the automotive industry.

Find out why the report predicts that the industry must adopt pricing models aligned to the real economics of being connected. You’ll also learn how connected vehicle services are influenced by network effects and what this means for an OEM’s revenue and profit potential. In addition, you’ll discover how OEMs can avoid the risk of losing the longer-term customer relationship to third-parties like telecommunication or telematics service providers.

In short: if you’re interested in learning which economic model best serves Automotive OEMs, download this report.

This white paper is based on findings from a consumer research study conducted with new vehicle buyers in 2013. It was conducted by CGS Advisors with a random sample of consumers in the United States that acquired new vehicles within the past 24 months. Covisint, a leading provider of automotive connectivity solutions, sponsored the research study.

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Covisint - Study Sponsor

Covisint provides the leading cloud engagement platform for creating and enabling new mission-critical external business processes. Our solutions enable organizations to connect, engage, and collaborate with the critical external audiences that define their success — including customers, business partners and suppliers.

Covisint’s cloud engagement platform offers OEMs a robust, secure and proven platform for driving additional revenue and customer loyalty through connected vehicle initiatives. With Covisint, OEM CIOs, CMOs and LOB leaders can deliver a unified and global connected vehicle platform – based on their own business strategies, not their TSP’s limitations – and one, integrated experience across the ownership lifecycle.

CGS Advisors, LLC

CGS Advisors, LLC is a boutique advisory services firm specializing in assisting enterprise leaders prepare for industry disruption. We assist clients through our three core practices: Strategy Services, Innovation Services, and Connected Services. Each useful on its own, it is the intersection of our practice areas where we most excel, allowing us to help our clients realize strategic value by harnessing enterprise innovation in the emerging connected economy.

CGS Advisors is:

  • a small firm focused on solving meaningful problems;
  • made up of experienced, transformational advisors;
  • able to convert complex issues into simple visions & solutions;
  • specialists in imagining the path, and running the first mile.

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