Automotive Blog

Delivery of digital services to order


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Elon Musk recently said that a set of new capabilities that Tesla plans to introduce will mean that “any Tesla you drive in the world automatically adjusts to you." By doing this, Tesla have made clear that their customisation of car to driver is now effectively an ongoing service, not a one off product choice. Premium carmakers have long sold a good proportion of their cars built to customer order, with the individual order that is bespoke and made up of a customised choice of colour, interior, powertrain options, including choices for on-board technology. These bespoke customer orders are, by necessity, fulfilled either via new customer orders for future production, or amendment to existing unbuilt stock orders. But digital content offers the promise of a relatively low cost ongoing customisation to the customer experience and use of the car itself, along with any associated services that new functionalities can bring.

There are several implications for management of the customer experience. Firstly, how easily are some capabilities digitally enabled? One manufacturer already offers electronic content within driver and passenger seats that is only switched on when the appropriate fee has been paid for the car via purchase or lease. It is possible that the stocking costs could be reduced, if the car is customisable after build via digital permissions, but it may also mean that the product cost drives the offering over the long term towards more standardisation of vehicle content.

Second, it raises questions for the manufacturer and associated commercial partners, in managing the customisation of the circulating parc once in use. Is the manufacturer able to restrict the addition of, or switching on, of digital content that is not supplied from a manufacturer authorised provider? For example, will some content be deemed as safe for third party amendment, such as entertainment and music, whilst others more related to vehicle driving functionality will be ring-fenced as a manufacturer liability issue? What happens to right to repair when the car is on the road and the repair is digital, over air and at a distance?

What will insurers make of personalised and customised content, particularly if changed after initial customer handover? To what extent will insurance be able to cater for product that is customised, or rather tailored, post-factory and post-PDI (pre-delivery inspection)? Could in–life digital upgrades of some features reduce insurance, such as vehicle tracking, enhanced braking and vehicle to vehicle communication, whilst other features could actually result in higher premiums, such as distracting in-car functionality or digital engine upgrades?

And what happens to digital content, capabilities and associated services when the car is sold to a second owner? At present, when a Tesla is sold, the supercharger access comes free of charge as it was bought with the car. Will a car be ‘wiped’ as a phone or tablet can be when handed over from one customer to the next? Franchised networks and daily rental companies already struggle with the complete removal of customer information when a car is handed from one driver or owner to the next. All parties are likely to have to be more careful in managing data, and separating out sensitive owner data from features and information related to the car itself.

One manufacturer is considering the convergence of build to order with digital services customisation as a move from segmented product and supply, personalised as a one off event, towards ‘relevant now’ customisation of product and service. The thinking within this OEM is that every customer has changeable needs, depending on context, time, location, and needs arising at that moment. Mobility services, leasing, and digital content customisation all potentially combine to allow manufacturers and their network partners to offer a flexible, responsive, and tailored customer experience. However, like any service, not being able to respond immediately to that demand will become a lost opportunity at best, and potentially damaging to both customer and brand value. And stepping back and looking at today’s legacy of carmaker channels for customer support, making that a seamless experience - as the customer moves from needing one service demand to another, travels from one county to the next, and steps from their owned car to ‘by-the-minute’ leased vehicle - will challenge existing organisational and commercial arrangements, all designed for a very different commercial set of priorities based on units sold and workshop utilisation. An always-on digital service therefore reframes the old conundrum for manufacturers and their distribution partners as to who manages the customer – but also what that actually means. Since the customer will logically expect a seamless service at all times, not just when they are looking for a new car or a service booking, but every minute of every day, then an always-on service provision, including customisation of both product and service, will require an always on infrastructure. BMW’s concierge service, for example, points to the support requirements that will add cost as well as revenue opportunity.

Customers will judge providers on the basis of the comparative quality of this always on service and product customisation. Just as mobility platforms such as MAAS Global (Mobility as a Service) aim to create a marketplace where customers choose an ‘in the moment’ best solution to their A to Z travel, making decisions on quality of service as they do so, so carmakers and their partners will compete in an always-on marketplace, where the quality of their response in delivery of customised service and product will drive ranking of brand value and customer loyalty - or indifference. Future residual value has long been a more reliable indicator of true demand for automotive products and services than unit sales, but true demand will become more immediate, visible and comparable for manufacturers if customers are more able to switch brand experience within their mobility buying experience. 

Delivery of digital services will transform distribution, from a focus on assets, to a focus on customer response and use of information. In doing so, assets will have to be repurposed and better used, and that applies not only to the car itself, but also to the carmaker and all distribution partners, facilities and people.


Written by Ben Waller

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