“I believe the auto industry will change more in the next five to ten years than it has in the last 50, and this gives us the opportunity to make cars more capable, more sustainable, and more exciting than ever before.” – Mary Barra CEO General Motors. This quote from the GM CEO summarizes it all and the epicenter of this transformation is the opportunity of automated and autonomous driving. From acquisitions ranging in the billions of dollars to disruptive interest from technology giants such as Google, vehicle automation is an area where answers need to emerge not on the technology side but more from the consumer acceptance level.
Frost & Sullivan regularly tracks consumer attitudes, preferences, and willingness to pay for different vehicle technologies and features and has recently completed a survey in the United States on automated driving where 1,569 consumers were interviewed. The objective of the study was to understand the following:
- How preferences for ADAS technologies have changed compared to a Frost & Sullivan 2013 study
- Values customers associate with different levels of vehicle automation (from L0 to L4 as per NHTSA segmentation)
- Level of automation acceptable for customers under specific driving conditions
- Connected car and HMI features that have good uptake potential
- Willingness to pay for selected automated driving packages
- Level of HMI support needed from vehicle
Following are the key takeaways from the study:
1) DAS & ADAS related features have reached a nice tipping point in the market – This is the most significant finding from the study and the one that matters currently. In Frost & Sullivan’s previous survey on ADAS systems in the United States in 2013, a key finding was the moderate awareness levels for systems such as Blind spot detection systems, forward collision warning, emergency braking, and a minor share of customers that were actually willing to pay for the same. A recent Frost & Sullivan survey witnessed a spike in familiarity (defined as owning and experiencing a feature) across key features such as blind spot detection, forward collision warning, automatic emergency braking, lane departure warning, adaptive cruise control, and rear view camera aid of over a minimum of 61 percent. Besides this the interesting improvements are a satisfaction score of over 80 percent for these features and a cumulative willingness to pay that exceeds $500 as a package. Similar trend applies across vehicle segments and three customer segments were identified in the survey, namely low automation aspirers, medium automation aspirers, and high automation aspirers. Despite the higher familiarity and satisfaction, the availability and uptake of features such as automatic emergency braking is between 25 and 30 percent in the market, leaving a lot of room to monetize and promote.
Familiarity with Level 0, 1 and 2 Features, United States
2) Women customers generally report lower familiarity with DAS & ADAS features – Across many Level 0 and 1 features ranging from ACC to automatic emergency braking to lane departure warning, Women customers report lower familiarity and usage. In terms of evolution into L2, L3, and L4 automated driving in excess of 50 percent women customers are concerned with technology failure leading to accidents. In general, because of the concerns from women customers, risks outweigh the benefits with respect to the value from automated driving.
3) German OEMs are ranked as the best for DAS/ADAS features – The brands that are more often mentioned by the US customers when it comes to delivering best in class L0 and 1 features are BMW and Audi at 44 percent and 30 percent, respectively. Mercedes Benz, Ford, and Chevrolet get an equal third position at 18 percent. Owners of subcompact, compact, midsize, and large cars mention BMW more often, whereas light truck owners mention Ford and GMC brands. The brands that get lesser mentions are Cadillac, Acura, and Toyota.
4) Despite higher overall satisfaction levels, HMI is an area where OEMs can improve – One area where most OEMs are spending time and money is to create a seamless handoff between the vehicle and driver and vice versa. To achieve this OEMs are trying to use driver and environment scanning methods but a key ingredient to success here is the alerts/engagement process. The satisfaction levels with L0 and 1 feature were generally noticed to be above 50 percent across almost 90 percent of the sample. The remaining 10 percent that showed some level of dissatisfaction were primarily based on the warnings and alerts from the system not being clear and useful. A few even report for specific features such as lane departure warning that the system does not work as indicated. Clearly HMI is an area of improvement for OEMs and a space that needs to be perfected before moving on to L3 automated driving.
5) Currently, Level 3 highly-automated driving features generate the most buzz with customers – As the users moved from L0 to L4 (NHTSA segmentation) the overall positive value that customers associate with these systems decreased from 55 percent to almost 39 percent. Moving away from the present generation ADAS systems the immediate value is more with L3 automated driving features and that is contributed to more by car drivers versus light truck owners. Moreover, the biggest value that car owners associate with L3 automated driving is the reduction of driving stress and the ability to reduce accidents.
6) The best use case for automated driving is on long journeys – Automakers are targeting the present generation of L2 automated driving features such as traffic jam assist as a day-to-day urban driving support feature. However, the real use case that almost 50 percent of male customers associate with L3 and above automated driving is on long journeys. A close second is use case with everyday traffic jams at lower speeds. Moreover, bad news for the self-driving taxi aspirers is that almost 50 percent of the same presently associate self-driving vehicles as privately owned. In both these cases women customers again pose a challenge as 16 percent of them currently do not envision a use case for automated driving and almost one-third of them have no specific ownership preference for an automated vehicle.
7) With all the hype and publicity, cybersecurity is critical to ensure smooth adoption – One of the areas Frost & Sullivan wanted to investigate in this study was to understand adjacent features and systems that OEMs can push using this opportunity of automated driving. Despite not being a direct feature, advanced protection against hacking comes in highest in terms of interest closely followed by features such as rear view mirrors with video feed (as in the upcoming Chevrolet Bolt), real-time software updates over the air, and a contextually-aware navigation system for which consumers are ready to shell about $400. However, the biggest takeaway and a factor that will ease adoption of automated cars is a cyber-rating as proposed by NHTSA.
8) Concerns with L3 and L4 Automated Driving go beyond technology failures – Over 53 percent women customers report concerns with technology failures as a key risk with L3 and L4 automated driving. However, besides this over 40 percent of them also report concerns related to how automated vehicles will interact with non-automated vehicles, ability of automated vehicles to respond to unexpected situations on the road, and confusions over when the human has to take control as important ones. Despite similar concerns shared by male customers, the number of them who report these is much lower. Again the key target customers to convince on the value proposition are female customers.
9) Ability to switch automation completely off will improve adoption rate – Conventional OEMs unlike Google and Tesla have been propagating that automation features will be offered as a choice to customers and not pushed as standard fitments. One area that Frost & Sullivan wanted to investigate in this study is what OEMs can do to improve the adoption of these automated driving features. Over 50 percent of customers reported that ability to switch these systems off and automakers assuming liability for any accidents occurring during the autonomous phase will both ease adoption and a close third is offering customers training at dealerships to better use these systems. Almost 36 percent of male customers in the United States show a high inclination to being included in a pilot study conducted by OEMs allowing them a chance to experience these systems. The biggest takeaway here is that OEMs have to show boldness similar to Volvo and Daimler on liability assumption and also borrow leaves from Apple’s book and deploy Apple Geniuses type tech savvy youngsters to educate customers on these technologies before delivering the vehicle.
10) Surprisingly, American car brands are trusted by customers to deliver the best automation experience – Across the sample, Ford, GM, and FCA are rated highly by the US customers (more than 55 percent of them) to deliver the best-in-class automated driving experience. Google comes at a close second followed by German OEMs. Technology giants such as Uber and disruptors such as Tesla come much lower in the list. The key takeaway is the golden opportunity that brands such as GM and Ford have to accelerate their way into a first mover advantage on these feature areas and shedding that volume oriented fast follower tag.
Level of Concerns with Automated Driving Scenarios, United States
From a top level Frost & Sullivan recommends the following as key action items for OEMs, suppliers, and technology vendors to make the best out of the automated driving opportunity:
- Increase availability of ADAS features across models and trims and focus on features beyond mandated ones such as rear view camera on ones such as blind spot detection, emergency braking, and lane keeping assist as these could prepare the customers better for L2 and L3 automated driving. By spreading the availability across trims, OEMs and the supply ecosystem also stand a chance for better volumes and performance data that will be crucial for L3 and L4 implementation in the future.
- Run targeted campaigns aimed at women customers explaining to them the benefits and values associated with these technologies. Part of this can also be addressed using new retail mechanisms such as usage of product geniuses. OEMs should consider promoting L3 automated vehicles in a completely new retail environment like the upcoming FordHub.
- Improve internal strength on areas such as Cybsecurity and forge partnerships with trusted providers to make this transparent to customers.
- Improve the HMI space especially on the output side and consider systems such as head up displays, cluster displays, and multiple warning methods to alert and engage the driver. A key system that OEMs have to get right in order to do this is driver monitoring.
The study delves deeper into other key areas such as customer segmentation by aspiration levels for advanced automated driving and their preferences and willingness to pay, perceived risks and benefits with level 3 and 4 automated driving, incremental willingness to pay for L3 and L4 automated driving, and differences by vehicle segment, age, and gender. Frost & Sullivan is also currently preparing to launch this study in the European market. To know more about this study and the upcoming European one, please contact Praveen Chandrasekar at cpraveen@frost.com.
