Written by Thembani Magazi – September 30, 2021
Reviewed by Asaf Kedem
The cars of today are more connected than ever. That connectivity comes with enormous volumes of raw data that are highly valuable to the right buyers in today’s markets. Connected cars are equipped with cameras, lasers and electrical control units that essentially turn the vehicles into moving sensors. A whole range of data can be collected, from driving distances and speeds all the way to the entertainment content being played by the vehicle occupants. The industry’s value is estimated to be US$400 billion, and Honda Motors is joining the race to monetise big data.
The data related to vehicle control produced by 5 million connected cars in a single month amounts to 104 petabytes, according to NTT Data. That is enough to fill over 4 million 25-gigabyte flash drives. Adding camera footage and other data multiplies the volume more than 100 times over.
Honda holds driving data on about 3.7 million vehicles. That’s a veritable gold mine of data and naturally they have started to provide that data to commercial facilities and other clients. The company started their data business in 2017, but the automaker had only transferred that data on a limited basis, for example, to local government authorities seeking to pinpoint drivable roads during disasters. The applications are much more extensive than this in 2021 and the list of data buyers keeps growing if you are a car manufacturer. In August, Honda started providing information on driving conditions using electric boards. The price for that offering is about 4 million yen (US$36,000) per month. Honda has partnered with Tokyo location-data start-up Nightley to analyse drivers' behaviour for a fee. The data is expected to be used in determining consumer demands, gauging the effectiveness of advertising and for planning openings of retail outlets. Monthly subscriptions start at 200,000 yen.
It’s clear that data offers a strategic advantage to a firm, and this is something that’s not lost to some of Honda’s main rivals. Toyota, for example, has teamed with the NTT group to develop technology that controls the flow of traffic in an area after detecting congestion. Nearly all new Toyota passenger vehicles sold in Japan and in the U.S. since last year are connected. Now Toyota is constructing infrastructure to utilize the data.
Toyota looks to monetize the data through collaborators, such as Uber Technologies. They have already worked with Japan's Aioi Nissay Dowa Insurance to analyse driving data and offer discounts on auto insurance—another example of the applications of monetised data.
Auto Trendy’s take:
Collaboration and free enterprise. These two fundamental aspects of business are helping the automotive industry skyrocket to heights that would make even aerospace jealous. The business of big data is highly lucrative and profitable for everyone involved, and if the trade of big data translates to safer and better cars for the everyday consumer then we will likely see the value of the industry exceed its current US$400 billion price tag in the coming years. The relations between auto manufacturers and data buyers will need to be nurtured so that the transition to new technologies remains smooth and ideal without much pushback from legislation. Data is, in every way conceivable, shaping the world around us today. The automotive industry is no exception.