Toyota Exec: Connectivity to Bring Big Changes to the Automotive Industry
Satellite operators are optimistic that the connected car could be the next hot market for the industry. But what do car manufacturers think? We talk to one of the leading car manufacturers about whether the market for satellite is more myth than reality.
When looking at the connected car as it relates to satellite, Toyota is definitely one of the automotive manufacturers to keep an eye on. The company has already partnered with Intelsat and Kymeta as it looks to bring the next generation of connected services to customers. But what is Toyota’s vision of the connected car and where does satellite fit in?
Sandy Lobenstein, vice president of connected services and product planning at Toyota Motor North America, is the executive responsible for bringing Toyota’s “connected” vision to fruition. He starts the interview by saying that Toyota really believes in the concept of the connected car. The company has been working on connecting its fleet since the start of the millennium, when it offered its first connected product called LexusLink. Over time, Toyota has added more products and more features. For example, it has added the ability for customers to start and unlock their car remotely. It has also added the ability to do remote diagnostics, so customers can get health reports on their vehicles, and Toyota’s dealers can also help customers connect to their vehicle so they can see its health and status with a service called ServiceConnect.
“This year, with the launch of the 2018 Camry, we have now embarked on standardizing connectivity across all of our models. In the next two to two and a half years, we are going to start standardizing embedded digital communications modules and embedded cellular connectivity for all of our vehicles with the goal that by 2020, connectivity will be standard in all our vehicles both in the United States and Japan,” says Lobenstein.
There is little doubt that the automotive market is seeing a revolution at the moment and the car of the future could look very different to what we have seen in the past.
This will also change the dynamics of the relationship between the car manufacturer and the customer. Traditionally, the relationship with the dealership is once you bought your vehicle the relationship is pretty much over. The customer would then just drive to work, vacation, and come back for the occasional service.
“The relationship meant there was more effort on the consumer to keep that relationship or a lot of effort on the dealer to find ways through direct mail to keep that relationship going,” says Lobenstein. “What we see as the big benefit of connectivity is building a much stronger bond between our customers and our dealers, and our customers and our brand. With connectivity, we can keep that connection alive and provide timely information to customers about their vehicle, such as whether the vehicle needs a service or not. So their lease may be up; they can then perhaps trade their vehicle in early to another Toyota. It allows us to keep that link on a weekly or monthly basis, and make a more useful relationship with them.”
The Satellite Connection
Toyota has been working with Kymeta for the last few years to find ways to build a bigger pipe in and out of its vehicles. Lobenstein admits that today’s cellular technology, and even tomorrow’s cellular technology, may not be able to handle the amounts and types of data that autonomous and non-autonomous vehicles will be streaming in over the next 8 to 10 years. Toyota is looking to find better ways to handle those large amounts of data. One of the potential solutions could be around edge computing.
“We just announced a consortium with companies such as Intel and a few others to find ways to use edge computing and create standards around managing data flow in and out of vehicles with the cellphone industries or the hardware industries. Working with a company like Kymeta helps us find ways to use their technology to handle larger amounts of data and make use of large amounts of bandwidth that is available through satellite … whether it is for crash notification, or simply just collecting telemetry data to help provide information to the customer about their route such as traffic, weather, etc.,” says Lobenstein.
So, will satellite have a bigger role in the connected car market going forward? “It all depends on how they can package that in a vehicle. That is one of the benefits of Kymeta technology. They have been able to take what was a large satellite dish, and shrink that down using their technology and LCD to make a much smaller antenna that we can package into a vehicle. But truly, for the industry, it does come down to packaging and pricing, not only for the hardware itself but also for the transport costs for the data itself,” says Lobenstein.
But what can the satellite industry do better to make sure it is a significant part of this market? “We need to understand the scale and the technology, as well as the capabilities of satellite. For us, it is all about packaging. For a car that is 18 feet long and six feet wide, it is more of a challenge than putting a satellite dish on a cruise ship or a Boeing 777,” Lobenstein says.
One of the issues facing the connected transportation sector, whether car, plane or ship, is keeping vehicles secure. Lobenstein admits it is difficult to assess the risk threat. While he points out there has never been a successful malicious hack, that doesn’t mean there have not been warning signs.
“All of the hacks we have seen in the media have been white-hat hackers that are benevolent in pointing out vulnerabilities in company systems and helping us as an industry become better with those systems. As more vehicles become connected and there is more vehicle-to-vehicle communication, and as more vehicle-to-infrastructure communication starts to build, I think there will be more nefarious folks trying to attack the industry in general,” says Lobenstein. “The industry needs to be on its guard.”
So what is Toyota doing to keep its connected cars secure? Since the inception of its connected program, it has taken steps to not only secure the data as it leaves the vehicle, but also how it is transported. As an example, Toyota has always used a Virtual Private Network (VPN) so that the data coming in and out of their vehicles is the only traffic on that network, is encrypted, secured and constantly monitored. This means Toyota will very quickly know when and if somebody is trying to get into its network. All of the data is encrypted during transport and decrypted when it arrives in its data centers. Continuing on this theme, Lobenstein adds, “We are also quite active with government. We were instrumental in working with other Original Equipment Manufacturer (OEM) partners to create the data privacy principles, which set forth ground rules in terms of managing privacy and customer data. We submitted that to the Federal Trade Commission, so it can be monitored or acted upon if anyone who signs up for that charter then violates those principles. So we are quite active and take that quite seriously. Even as we develop new systems, it is security by design rather than security by afterthought. So, we bring in our Chief Information Security Officer (CISO) and our EISP team to help architect our systems. It is a big concern with our customers.”
“Earthquake in the Industry”
Lobenstein says the market is in flux right now, with more than 100 years of relatively stable practices on the cusp of change. But as people start to think about mobility more than transportation, Lobenstein says this is causing a little bit of an earthquake in the industry; meaning the industry must start thinking differently and working on expanded offerings.
“We are looking at developing a mobility services platform to manage large fleets or to do car sharing or ride sharing. We think over the next few years, the industry is going to move from a transportation industry to a mobility industry that provides services. And the vehicle is a platform to enable those services. It will be revolutionary, not evolutionary,” says Lobenstein.
Once Toyota connects all of its fleet and there are connected cars being driven around the United States, what will happen next? What will be the new services? Lobenstein talks of vehicles being seen more as an asset than anything else going forward. With the majority of cars being privately owned, Lobenstein believes mobility and connectivity will enable the possibility for those vehicles to do more.
“One of the things we are focusing on and looking to launch with our partners in Hawaii is a car sharing platform in high density cities — where parking is at a premium and where people use public transportation — [that] allows our distributor to let people use vehicles on an hourly, daily, weekly or monthly basis. And you can do this without a physical key,” he says. “The customer can use their smartphone and simply make a reservation for a vehicle, find that vehicle with a map on their smartphone, unlock the car and start the car with their smartphone, use the vehicle as much as they need, and then return the vehicle and they pay for it on their smartphone. So, we are enabling a more flexible society and improving the utilization of that asset.”
In terms of the future for the market and the pace of change, Lobenstein adds, “In 12 months’ time, more vehicles will be connected, and we will be collecting telemetry data on those vehicles and hopefully be able to provide new services based on that data, and providing feedback to our dealers. In 12 months, I don’t see huge changes, but in three year’s time, there will be fairly big changes. We are moving quickly to make sure we are in front of this trend.” VS