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Procurement faces massive revolution with connected cars ‘big data’

Craig McNaughton corporate director Lex Autolease
Craig McNaughton: 'Connected car data will fundamentally change our industry'

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23 May 2017

Revolution with connected cars

  • Leasing companies to transform into analytics businesses that hire vehicles
  • Traditional fleet business model to change as drivers ‘control lives’ from their car
  • Employers must take action to protect themselves in new world of ‘big data’

CONNECTED  cars and the arrival of  ‘big data’ will cause a massive revolution in the vehicle procurement industry.

Meanwhile contract hire companies will transform into analytics businesses that lease vehicles.

Those were two of the predictions at ACFO’s spring seminar, ‘Big Data – Big Seminar’, sponsored by insurer AIG, Audi and Lex Autolease.

Nick Mitchell, Audi’s service and technical manager, explained:

“The arrival of the connected car will result in massive changes in the way people use cars and the application and provision of cars.

“Technology will be updated before our eyes. It is a massive revolution that we are about to go through and the pace of change will never be as slow again.”

Predicting the future of  maintenance and repairs

For contract hire and leasing companies the arrival of ‘big data’ means “transformational change”, with Craig McNaughton, corporate director of Lex Autolease, forecasting that it will enable them to “predict the future” in terms of vehicle service, maintenance and repairs and driver behaviours as a result of data analysis thus taking away fleet operation uncertainty.

That journey is already starting with the piloting and ultimate roll out by Lex Autolease to clients of operational benchmarking across a raft of in-life areas of vehicle expenditure and risk to enable fleet improvements and cost savings to be made.

Ultimately, Mr McNaughton told delegates: “Connected car data will fundamentally change our industry.

“We have a long way to go, but we must change from a rear-view mirror perspective to using data to predict the future and move from a leasing company that provides management information to a data company that leases vehicles.”

However, the transformation will not be without its challenges and behind the scenes policy makers, vehicle manufacturer and leasing company representative organisations are discussing numerous issues around data ownership and accessibility.

Key challenges for leasing companies

  • Liability around data breaches with company car drivers not currently covered by leasing companies’ Masterhire agreements, which were contracts with fleet customers
  • Manufacturer determination of “who is the customer” – contract hire and leasing companies, end-user fleets or company car drivers
  • The addition of new functionality to cars and software downloads by drivers during a vehicle’s life meant monthly lease rates would change during a contract period and that presented a ‘logistical challenge’
  • The ability to continue to direct vehicle SMR work into the location of choice of the leasing company and customer fleet manager – franchise dealer, independent garage or fast-fit – and not just to the garage network of the manufacturer proving a vehicle
  • The deactivation of vehicle and driver data in the car at end of contract so secondhand purchasers could not access it
  • The speed at which various motor manufacturers were introducing vehicle connectivity.

McNaughton said: “There are real contractual challenges to overcome due to the difference between retail customers and fleet owners.

“The connected car will be a huge part of the data lake and the volume of information ever-increasing. Fleet customers demand information to tell them what is happening to their vehicles and to predict the future and lead them on a journey to provide cost savings and deliver safety.”

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