As per recent studies done in the automotive industry, there are more than 200 million cars that have internet connectivity in some form or other and in the next few years, automobiles will be the largest industry in adopting IoT. Among connected products, the number of cars will be highest.

This development will have a dual impact on the automotive industry, one from the consumer's perspective and the other one from OEMs (the car manufacturers). The consumer will have the benefits of continuous internet-connected car infotainment, navigation, location tracking, and other remote control features.

OEMs will be the major beneficiary of the impact of IoT on the automotive industry. The manufacturer will be able to have enough information about its customers to provide customized services such as predictive maintenance, where they can alert the customer in advance of any component failure and provide repairs and replacements, remotely run diagnostics for any issues, and provide over-the-air software updates without having to recall all defective cars. All the data collected from connected cars helps the OEM to improve the cars over a period of time.

There are numerous benefits of IoT, but there are many challenges as well. Increased connectivity of cars will generate a huge amount of data for OEMs. There is increased responsibility placed on OEMs to protect this data securely. The users will connect their cars with their smart phones, which will sync their phone and its data to the car, which will potentially be available for hackers and poses a serious threat. These issues can be kept in check by making sure that all data is kept with the OEM itself and not with another vendor or IoT service provider. Follow best practices for security and do the necessary encryption and isolation of data from the rest of the IT system.

Apart from security issues, another major issue that automobile manufacturers are facing is domain expertise. Traditionally, these manufactures don't have strong internal IT departments as it had little role to play. But with advancement in automobiles such as connected cars, autonomous cars, electric cars, IT has become a major component. To overhaul the entire organization for the next wave of automobiles, manufacturers need to put in a lot of effort, time, and money.