5G Connectivity to Boost Car Value After the Sale: Report

Connectivity is one of the major disruptive trends in the automotive world, penetrating at a rapid pace. The automotive world is witnessing the introduction of a wide range of connectivity features, functionality and technology in modern vehicles. Almost all cars sold in the United States, Europe and China now come with 5G connectivity.

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This creates a situation for automakers to preserve or enhance the value of their aftermarket vehicles in a way that will alter the calculation of vehicle residuals, says a study from Strategy Analytics.

Research claims that once all cars are equipped with 5G technology, automakers will be able to generate $ 40 billion in revenue through the avoidance of annual warranty costs. Additionally, vehicle consumers will see savings of $ 32 billion in annual leasing or loans. In addition, 5G connected cars will also bring a huge business opportunity to car dealerships. They will see an annual increase of $ 24 billion in their income from the sale of vehicles.

These monetary gains will be in addition to the benefits that will be enjoyed by society as a whole through the introduction of 5G compatible vehicles. These connected vehicles will also reduce collisions, traffic jams and emissions. These would help save billions of dollars worldwide, as research results claim.

The study also claims that 5G connectivity in modern cars will directly help and support the development of advanced driver assistance systems (ADAS) capable of helping vehicles avoid collisions while facilitating the operation of autonomous vehicles. The study predicts that 5G-enabled connected cars will take a growing share of unit volume with even faster penetration of sales revenue. This will ultimately influence the rental economy and the market value of new and used vehicles.

Connectivity in cars so far is an optional value proposition for consumers. However, wider penetration of 5G connectivity in the automotive world will change this perception, the study says.

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