Automakers are already "fighting a war" for user data and are intensifying their preparations to collect personal information of their future customers with the intention of selling it to marketers, industry analyst and Strategy Analytics consultant Roger Lanctot told Bloomberg. All of the major vehicle manufacturers are already looking toward the promise of fully connected vehicles likely to be realized following the rollout of the fifth generation of wireless networks, with their Internet-enabled cars being widely expected to collect personal data of their owners with their full consent. Ultimately, automakers want to create massive databases of consumer preferences meant to be offered to advertisers, thus monetizing information in a manner that's similar to the core component of Google and Facebook's business models, Mr. Lanctot said.
In some respects, the mobility industry already started with mass-collection of user data and is accelerating it by incentivizing drivers to share their preferences and behavioral patterns with various discounts and rewards ranging from lower car insurance premiums to coupons for pizzas. Israeli startup Otonomo previously established itself in the segment, having managed to score deals with ten major automakers and 75 other entities such as banks interested in its aggregated data. The firm effectively filters through massive volumes of information in order to serve reports that were custom-built for individual clients and their interests. Several similar companies already exist around the world and many more are expected to go into business in the coming years, according to some industry watchers.
Santa Clara-based Telenav has recently been experimenting with the idea of selling additional vehicle equipment such as robust infotainment systems and navigation solutions using a freemium business model that allows customers to include such technology into their new cars at no extra cost, so long as they're willing to occasionally encounter ads. Coupled with the value of the data itself, the approach to selling vehicle add-ons for data may prove to be a lucrative one for the automotive industry, providing it with an unconventional method of staying competitive in certain segments of the market, especially the entry-level sector. Many automakers and relevant startups are betting consumers won't mind sharing their data in exchange for various incentives, especially as they have already been willingly giving their data to Internet companies for years in exchange for their free services such as Gmail, Facebook, and Google Search.