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September 20, 2018updated 15 Aug 2022 12:14pm

Connected cars and the business of leasing

By Mishelle

We are some way before flying vehicles take off into mass production, but right now the automotive industry is witnessing a major revolution with the introduction of connected cars; Counterpoint Research estimates the global market for these vehicles will grow 270% by 2022. Daniel Layne, founder and chief technology officer at Quotevine, writes.

The widespread introduction of connected cars – with sensors, eventual autonomy and overthe-air updates in mind – will have a huge impact on the entire automotive value chain, presenting new and exciting business possibilities within manufacturing, marketing and maintenance, as well as insurance, safety and vehicle hire.

It will also present a significant opportunity for the automotive leasing industry, allowing businesses to reposition themselves as value drivers to customers rather than tactical service providers.

LEASING FOR THE PEOPLE Digital experiences proliferate across many aspects of our lives; everything from shopping and booking holidays to hailing taxis can now be done through slick digital interfaces. Retailers and hospitality businesses in particular have done well to adopt smart data and automation practices to create personalised, real-time digital experiences, resulting in happier customers and higher revenues through previously untapped sales cross-sell opportunities.

This streamlined service expectation is now filtering across more traditional sectors, serving as an catalyst for the automotive leasing industry to break away from the status quo in pursuit of digital innovation.

Connected cars will serve as fuel for automotive lessors to provide Amazon-like digital experiences, by allowing them to connect real-time vehicle and driver data into their operations.

From here, they can offer customers – both retail and enterprise – refined offerings better suited to driving needs and habits, as well as budgets.

From a retail perspective, leasing businesses will be able to cross-reference personal, vehicle, and driving data in real time to anticipate leasing contracts for customers. For example, say a prospective customer is looking to lease a new car but is not sure what they want or how many miles they drive each year.

A leasing specialist with access to the right mix of data could use previous personal and driving related history to create a range of vehicle plans tailor built to the customer’s profile.

Lessors could also dynamically price and qualify customer contracts with greater accuracy and speed using mobile devices connected to cloud-based quoting engines, rather than the current manual processes of asking set questions and trusting guesswork and averages.

With regards to asset protection, lessors can also pass additional cost savings on to customers – for example, by helping them avoid penalty charges on mileage caps by sending warning notifications based on forecast driving time.

MEETING BUSINESS GOALS The benefits of advanced data use in enterprise leasing operations will be largely similar to those found in retail. However, connected cars will bring a much larger impact in this space, particularly within large corporations that run fleets containing thousands of vehicles.

They will let enterprise fleet managers overcome challenges across a range of scenarios, from age-old problems like realising cost savings, to the increasingly critical issues of reducing carbon emissions and improving driver safety.

Put into context, leasing businesses could alleviate the problem of a bloated enterprise fleet by cross-referencing data on which of their employees live within proximity of each other, drive to and from work at the same time, and might be open to a car-share.

Another data-driven solution for the enterprise would be improving duty of care by using car sensors to ensure drivers are not operating vehicles for longer than recommended, or when the vehicle is due a service.

Dynamic pricing can be introduced across fleets to nudge operators when drivers are not being eco-friendly, or during the procurement phase, to counsel fleet managers on ‘green’ vehicle choices and specs in support of their environmental agenda.

TIME FOR CHANGE Connected cars will allow leasing businesses to deliver truly innovative offerings for their customers. It also provides a critical opportunity to move away from being known as tactical service providers to position themselves as trusted business advisors that use data in smarter ways to deliver impactful, long-lasting value.

In a world of increasingly fickle customers, this level of demonstrable value will help to ensure a greater level of loyalty and, subsequently, business growth. The leasing industry is still some way from being able to capitalise on the opportunities that connected cars present; in order to reach this stage, a fundamental rethink of business processes and innovation is required.

The first step is to adopt newer and more specialist forms of cloud-based digital technology, which will provide that all important ability to gather and interpret new, complex streams of data into actionable insights. Once this is in place, lessors will be able to start the journey towards building services that give them the edge.

 

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