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Henry BzeihManaging Director, Connected and MobilityKia Motors America
Though the internet of things (IoT) offers numerous benefits for the automotive space, the adoption rate for connected car technology among drivers is low. Kia Motors America is looking to change that by offering its connected car technology as a free service in every vehicle. eMarketer’s Sean Creamer spoke with Henry Bzeih, Kia’s managing director for connected and mobility, about the value of data coming from connected cars, and how it benefits manufacturers, dealers and drivers.
eMarketer: How does the IoT connect all of the functions of a car?
Henry Bzeih: It’s a mix of many systems called the vehicle system network. The network is the backbone of different functions—there’s power train and engine transmission; there’s chassis, braking and traction control; and there’s safety and airbags. There are many different functional areas sitting on this network. The information is being engaged in a CAN [controller area network] and is available to interact with.
eMarketer: How does Kia put the information collected from these systems to work for future vehicles?
Bzeih: It could be used to improve the quality of the vehicle, to find ways to make systems better and find diagnostic issues. Through these prognostics, we can make vehicle ownership much simpler, easier and [more] seamless.
eMarketer: Can these prognostics help drivers in a pinch?
Bzeih: Most customers get anxiety when the check engine light goes on. They ask, “What do I do next?” The connected car has an advantage, because it can give you guidance on what to do next. It also provides information to the appropriate places—whether it be the automaker or the dealer—so we can service the vehicle better.
eMarketer: Do other players want access to data generated by connected cars?
Bzeih: User-based insurance is taking a foothold. There’s a lot of activity on that front, but we won’t give that information to an insurance company—or any third party—without the consent of the customer. There’s a hard line between making data available to the automaker or dealer to improve the quality of the vehicle, and the customer entering into a relationship with the connected system. That is not to say we won’t do this in the future with consent from the customer, but it has to be the opt-in method.
eMarketer: How many consumers generally subscribe to connected car services?
Bzeih: Across the industry, connected car [services] have yielded a low subscription rate. Customers pay anywhere from $100 to $400 a year for the service. Some people find this additional cost to be a burden.
eMarketer: How are automakers working to position connected car services so they’re more attractive to customers?
Bzeih: There’s a trend of moving away from the subscription model to the premium model, which provides long periods of free service in exchange for data-gathering and actionable intelligence. Some OEMs [original equipment manufacturers] approach it from a branding perspective—saying that it’s not about revenues, but about the brand.
eMarketer: How does Kia present its technology to customers?
Bzeih: Kia offers our Uvo technology for free for 10 years or 100,000 miles. We see it as a brand enhancer that aligns with our DNA of providing the best value for your money. When you purchase a vehicle, you get these systems.
US paid media ad spending will grow steadily in 2017, on the heels of a strong 2016 boosted by the Rio Olympics and the presidential election. A focus on mobile will fuel growth, pushing total media spend to more than $206 billion this year—a moderate increase of 6.1%.
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