Understanding industry challenges, rising trends, and the technologies transforming customer engagement
The automotive world is undergoing a massive shift, and connectivity sits at the heart of it. IoT-powered experiences, intelligent vehicle ecosystems, and always-on digital interactions are redefining how customers choose, buy, use, and care for their vehicles. What was once a purely mechanical industry has evolved into a connected network of sensors, data, and smart services that keep vehicles and customers closer to brands than ever before.
In this connected landscape, customer experience is becoming just as important as the engineering behind the vehicle. Today’s customers expect seamless connectivity, real-time insights, personalized interactions, and frictionless support throughout the ownership lifecycle. Every touchpoint matters, whether inside the car, online, or at a dealership.
Connectivity and IoT are playing a central role in making this possible. From real-time diagnostics to predictive maintenance, vehicle-to-everything (V2X) interactions to intelligent charging networks, connected ecosystems help brands deliver faster, smarter, and more intuitive experiences. These technologies reduce uncertainty, increase convenience, and empower customers with transparency and control.
Now that we understand how connectivity is redefining the industry, let’s look at the major challenges and the trends shaping the future of automotive CX.
Industry Trends and Challenges in IoT-Driven Automotive CX
The connected future promises extraordinary value, but it also brings its own complexities. As automakers and mobility providers race to deliver seamless digital experiences, several challenges emerge across the customer journey.
Challenges in Connected Vehicle Management
- Fragmented IoT ecosystems create difficulties in unifying data from sensors, telematics, and in-vehicle systems.
- Real-time data exchange across cloud, edge, and onboard systems requires significant infrastructure upgrades.
- Delivering consistent OTA (over-the-air) updates without disrupting user experience is still a challenge.
- Ensuring the reliability of connectivity in remote or high-traffic regions impacts customer trust.
Challenges in EV Infrastructure and Charging Networks
- Limited, inconsistent connectivity across charging stations leads to unreliable charging experiences.
- Lack of standardized IoT protocols makes charger discovery, payment, and navigation cumbersome.
- Poor integration between vehicle telematics and charging networks increases friction for EV users.
- Real-time charger availability, pricing, and status updates are still not universally accessible.
Challenges in Smart Dealerships and Connected Operations
- Many dealerships still operate without IoT-enabled management systems.
- Lack of integration between connected vehicles and dealership tools reduces personalization potential.
- Manual processes for diagnostics, test drives, and maintenance slow down the customer journey.
- Disconnected data flows affect service recommendations, cross-selling, and customer engagement.
Challenges in Data Security and Privacy
- Connected vehicles generate massive amounts of personal and operational data, raising privacy concerns.
- Cybersecurity threats ranging from hacking to data breaches require continuous investment.
- Customers expect transparency about how their data is used, stored, and protected.
- Balancing personalization with responsible data use is becoming increasingly complex.
Challenges in Predictive Maintenance and Vehicle Health Monitoring
- Inaccurate or inconsistent sensor data leads to false alerts, reducing customer confidence in predictive systems.
Challenges in In-Vehicle Experience and HMI (Human–Machine Interface)
- Overloaded interfaces and inconsistent UI patterns across models make it difficult for customers to intuitively interact with connected features.
Trends Driving Connectivity-First Transformation
Even with these challenges, IoT and connected ecosystems are accelerating innovation across the automotive sector. Here are the trends shaping CX:
Connected Ecosystems
Vehicles now operate as digital hubs, integrating entertainment, navigation, diagnostics, V2X communication, and personalized services.
Predictive and Remote Service
IoT sensors and telematics enable early issue detection and preventive maintenance, reducing downtime and improving reliability.
Hyper-personalized In-Car Experiences
From music to navigation to climate settings, connected vehicles adapt to individual preferences automatically.
Omnichannel Connected Experience
Customers expect a unified journey – browsing online, booking test drives digitally, and continuing the experience in a connected showroom.
Smart Mobility and Subscription Models
IoT enables flexible ownership, usage-based insurance, and subscription-based services powered by real-time data.
Sustainable, Connected EV Journeys
Smart charging, route optimization, battery analytics, and energy-efficient driving insights enhance the EV ownership experience.
Extentia’s Role in Enabling Connected Automotive Experiences
At Extentia, a Merkle Company, we explore how connectivity, IoT, and design come together to elevate automotive customer experience.
By understanding connected customer behavior and mapping emerging digital opportunities, we help automotive brands build experiences that are intuitive, seamless, and predictive. From designing digital onboarding and dealer applications to developing IoT-enabled service journeys, telematics-driven insights, and connected ecosystem platforms, we translate ideas into real, scalable automotive solutions.
To explore how we support automotive transformation end-to-end, visit our Automotive Experience page. Earlier this year, we also launched our Automotive Experience Design Trends Report – a comprehensive look at the emerging technologies, customer expectations, and design shifts shaping the future of automotive experiences.
The Road Ahead
As the industry accelerates toward a connected, software-defined, and IoT-powered future, customer experience will remain its most powerful differentiator. Delivering on this promise requires empathy, data intelligence, and an innovation mindset where connected technology enhances human understanding rather than replacing it.
By rethinking every step of the customer journey through the lens of IoT, from inquiry to ownership to after-sales, automakers can create long-lasting relationships grounded in trust and convenience. The future of automotive CX is not just about smart vehicles; it’s about smart, connected relationships between brands and the people who drive them.
