The proliferation of connected devices — particularly smartphones and tablets — has accelerated the adoption of vehicle management applications in North America. While infotainment and convenience solutions dominate the automotive apps aftermarket, Frost & Sullivan says the focus is expected to shift toward vehicle service, information and management apps. The firm contends that this shift will ensure long-term revenue opportunities for OEMs, third-party developers and aftermarket participants in North America.
New analysis from Frost & Sullivan, “North American Aftermarket Automotive Apps — Strategic Analysis of Vehicle Information, Service and Management Apps,” indicates that nearly 50 percent of respondents are either familiar with or have used vehicle management apps. The study also found that close to 50 percent of respondents said they are likely to use vehicle management and breakdown assistance apps if they are available inside the vehicle.
The firm points out that vehicle owners accustomed to the connected experience demand greater integration of mobile and in-vehicle apps that will allow them to monitor their vehicles, receive on-the-go services, as well as purchase parts and accessories. This increasing demand enhances the prospects of the North American automotive apps aftermarket.
“The advancement of remote diagnostic and prognostics capabilities will be a turning point for the aftermarket vehicle management apps,” said Frost & Sullivan industry analyst Kumar Saha. “As vehicle owners show greater willingness to invest in apps with effective breakdown assistance and repair or maintenance tracking, revenue generation will increase.”
Frost & Sullivan says several OEMs are looking to offer more comprehensive features along with their basic products through either a subscription or a “freemium” model, in which they gain consumer appeal and then charge a fee. However, monetization of vehicle management apps continues to be a challenge. Aftermarket participants and dealerships primarily use apps as value-added features in their overall e-commerce strategies, limiting opportunities for direct revenue.
While independent third-parties earn the highest revenues through lead generation, advertising and listing-fee models, the firm urges OEMs and aftermarket participants to introduce app-enabled remote diagnostics and prognostics capabilities to ensure revenue generation and to remain competitive.
“Vehicle management apps must include advanced features — such as real-time vehicle monitoring, remote repair and tracking capabilities — to attract payments from vehicle owners,” Saha explained. “Distributors and retailers need to find the right industry partners to introduce these capabilities and generate a new revenue stream.”
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