Data and digitalization in the automotive industry

Alongside business innovation, digitalization is one of the most important business trends for the future of the economy, and companies need to develop digital strategies and focus on the key success factors. The digital transformation of our societies and economies brings along the promise of an age of knowledge and creativity, and it is not a surprise that digitalization has become a keyword — and even a soundbite — among political and business circles alike.

In recent years, digital technologies have been drastically enhanced and undergone the transition from expert application to people’s everyday lives. Just as the introduction of the steam engine and the spread of electricity changed society in the past, so is digitalization in having a profound impact on society and the economy today. By its very own nature, digitalization happens at different speeds, spearheaded by established companies, and start-ups and venture capital. While the music and media industries were the first to experience the effects of digitalization and grasp their benefits, virtually all industries are now affected and affecting digital transformation.

Digitalization will have a profound imprint in the future of the automotive industry too: from autonomous driving to new shared-mobility models, customized insurance contracts, remote diagnostics and repair, and predictive maintenance services, digitalization will allow new use cases and business models to develop.

Digitalization will have a profound imprint in the future of the automotive industry.

Thomas Møller Thomsen, President, FIA Region I

It is the responsibility of public authorities, industry, and civil society organizations to prepare society for the changes that can be expected from digitalization, and we, the FIA Region I and our Mobility Clubs across Europe, have been doing our part as a consumer body. Over the past five years, we researched the challenges raised by the increasing use of data in the context of connected vehicles from all possible angles: we asked the consumers for their expectations and concerns; we looked into the legal issues related to data, privacy rights and liability issues; we conducted economic studies to estimate the business opportunities and the costs of the different access models; and we even developed a cybersecure technical solution for access to in-vehicle data. We discussed and exchanged with all the actors in the value chain — from the vehicle manufacturers to all sorts of suppliers and independent service providers — and engaged in a structured dialogue with the European Commission, members of the European Parliament, and national authorities in the member countries.

We all reached the same conclusion: the data-access model developed by the vehicle manufacturers, the so-called ‘Extended Vehicle’ creates serious imbalances to competition in the aftermarket, because it allows them to act as gatekeepers and exert total control over data flows from and to the vehicles. This prevents independent service providers from offering competitive alternatives and deprives consumers from effectively exerting their freedom of choice, resulting in very substantial costs, which we have estimated at €65 billion per year.

The so-called ‘Extended Vehicle’ creates serious imbalances to competition in the aftermarket.

We have waited long enough, and we can no longer afford to postpone and put on hold the expectations of millions of consumers and over half a million European SMEs. It is high time that the European Commission delivers on its promise of making Europe fit for the digital age, also in the automotive servicing and mobility sector. It owes it to the EU citizens, to the consumers, but also to the businesses and entrepreneurs; and must do it to preserve and protect Europe’s competitiveness in a globalized world. If the EU is serious about supporting the transition towards a cleaner, greener, smarter and safer mobility, it cannot disregard the limitless transformative potential of digitalization of automotive services. However, and because untapping this potential is entirely dependent on effective and efficient access to vehicle data and resources, legislators must get the regulatory framework right, and they must do it now.

Two months ago, together with the leaders of various European associations representing different automotive aftermarket operators, I was invited by Thierry Breton, Commissioner for the Internal Market, for an exchange of views on this topic. On behalf of the FIA and its European mobility clubs representing millions of consumers across the EU, I could explain why everyone — except vehicle manufacturers — believes that the Data Act alone will not enable consumers to exert their rights over the data that they generate by using their cars. Our recent study also shows that current data protection legislations will not suffice to empower consumers to make a choice of services across an innovative and competitive offers and services, while ensuring the intellectual property and industrial rights of the manufacturers, and the security of the vehicles. The Data Act will establish the high-level principles enabling the sharing of data in the EU, but the automotive sector will need complementary and specific rules to keep operating in an optimal way.

The Data Act will establish high-level principles … but the automotive sector will need complementary and specific rules.

On February 23, the College of Commissioners is meant to adopt its proposal of a Data Act; I look forward to it. In parallel, I urge Commissioner Breton and the services of the European Commission to go back to their own original plans and publish their legislative proposal on access to in-vehicle data as soon as possible, too. As in many other cases, the costs of non-action here are too high, and consumers and industries in the automotive sector alike need all the help they can get to navigate the twin digital and ecological transitions successfully; after all these years of doubts and hesitations, giving them the right regulatory framework is the least one can do.

via FIA Region I

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