VEHICLE-AS-A-SERVICE: FROM VEHICLE SALES TO CUSTOMER AND VEHICLE LIFETIME VALUE MANAGEMENT

Software is the key component driving innovation in modern cars, from electric engines to increasing levels of vehicle automation and infotainment systems. Yet while it is pulling the industry forward, software is also increasingly a source of problems for OEMs. Carmakers are being forced to recall vehicles already on the road, or postpone the start of production and sales, due to issues with new software.

Last year, one German OEM had to issue a recall affecting 1.3 million vehicles in the US and 2.6 million vehicles in China, due to defective emergency call software. A second German OEM had to stop production of one of its highest volume models for a few weeks due to software problems in 2019, again in the mandatory emergency call function.

Such problems don’t just impact carmakers’ reputations for reliability and custo- mer service – we estimate that for a premium model, the cost of a single week of lost production around the launch date could range from €34 million to as much as €101 million.

To avoid such additional costs, and to successfully tackle the challenges raised by future projects, we have developed a software project excellence framework around five essential areas for action (Chart 1):