The trend marks the first reality check for carmakers betting on recurring software revenues. According to people familiar with subscription trends across manufacturers, renewal rates at some companies fall below 20% once complimentary subscriptions end, even as automakers continue investing heavily in telematics, cloud platforms and digital services. “The first phase of connected vehicles was engineering, the second phase is customer engagement, and the third phase is monetisation,” said Ravi Bhatia, president, Jato Dynamics. “The carmaker that succeeds won’t necessarily be the one with the most connected features, but the one that creates digital services customers value enough to keep using throughout the ownership lifecycle.”
Growing Adoption
Globally, nearly 350 million connected cars are on the road. They account for about a fourth of cars in India and that number is rising. Between 2022 and 2026, features such as remote vehicle access, remote AC control and battery management, driven largely by electric vehicles, have seen rapid growth.
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Leading automakers including Maruti Suzuki, Hyundai Motor India, and Tata Motors among others offer connected platforms bundled free for periods ranging from one to four years before customers are asked to pay. Most automakers did not disclose renewal rates, but maintained that adoption of connected technologies continues to grow.
Hyundai, with over 832,000 connected vehicles on Indian roads, said just over one in five customers continue with paid Bluelink subscriptions after the complimentary three-year period, highlighting a bigger challenge for the industry.
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“Bluelink is engineered as a full stack digital ecosystem,” said Tarun Garg, MD and CEO, Hyundai Motor India. “Hyundai has taken this a step further with the Connected Car Navigation Cockpit (ccNC), accelerated by Nvidia, debuting in the new Venue, delivering a more intuitive and futureready in-car digital experience.”
EV OWNERS MOST ENGAGED
Electric vehicle owners are among the most engaged users, actively leveraging connectivity for battery status, charging management, route planning and incar charging payments, according to Garg.
The industry’s challenge is not consumers’ willingness to pay recurring subscriptions. Indians already pay for mobile connectivity, entertainment, cloud storage and digital productivity. The bigger issue is that connected-car services have yet to become indispensable to the ownership experience. The first generation of connected vehicles focused on convenience—remote lock and unlock, vehicle tracking, remote air-conditioning and vehicle health reports.