Telematics connects with consumers

Automotive New reports on the growth of automotive telematics systems.

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Automotive News

For auto dealer Annette Sykora, the promise of the connected vehicle is only beginning to come true. But she is upbeat about telematics--another term for the connected vehicle--because her customers are.

Telematics proponents have long believed that using the technology to connect vehicles to the outside world will bring numerous benefits to dealers. Dealers were promised enhanced customer contact, better awareness of what repairs their customers' vehicles need and improved dealership-customer relationships.

"The last decade we have been hearing about things that are going to be helpful in the repair process or for customers. We're beginning to see maybe the beginning of that true possibility," says Sykora, chairman of the National Automobile Dealers Association. She is the dealer principal of Smith Ford-Mercury in Slaton, Texas, and Smith South Plains Ford-Lincoln-Mercury-Dodge-Chrysler-Jeep in Levelland, Texas. But Sykora adds: "We're not seeing the actual repair process improve quite yet."

Serve the customer

Sykora says car dealers are interested in selling "connectivity" because their customers want it.

"Dealers are all about serving the customer," Sykora says. "So anything that makes it easier for our customer, easier to serve our customer, we're very interested in."

She cites the Sync system in Ford Motor vehicles as a good example of telematics that customers want. It allows personal devices such as iPods or MP3 players to use in-car audio systems. And newer Sync systems can place emergency calls over the driver's cell phone.

But Sync is not bringing dealers any direct feed from in-car data that would enable them to schedule service or track component failures.

Phil Magney, an analyst at Telematics Research Group, of Minnetonka, Minn., divides telematics into two main categories: vehicle or auto-centric telematics, and consumer-centric telematics.

Remote diagnostics and automatic notification to emergency responders after a collision are examples of auto-centric telematics.

Consumer-centric telematics includes information and content relevant to the driver. Examples include navigation, searches for local restaurants, and traffic and weather updates. "If you think about it, that information does the vehicle no good. It does the driver some good, of course," Magney says.

He foresees a future in which consumers will expect their cars to be connected to outside data sources, such as the Internet. Their other gear will be so interactive that the automobile will be mute from a connection standpoint.

Most connected-vehicle success stories come from OnStar and ATX. Those cell-phone-based services have driven the industry with emergency calling, automated collision notification and call center services.

Extending the reach

"Safety and security--there's no question that's where the majority of the business has been," Magney says. "Safety as a feature set ranks high in the consumer's mind."

Tony DiSalle, OnStar marketing vice president, says new services coming into vehicles in the 2009 model year will extend the reach of telematics and heighten consumer interest. They include:

1. Navigation. OnStar will offer turn-by-turn voice navigation directions for as many as five destinations. The directions are downloaded into the vehicle from online provider Map-Quest Inc.

2. Insurance. An odometer-monitoring arrangement allows proven low-mileage drivers to receive discounts from insurer GMAC Financial Services.

3. Security. A stolen vehicle slowdown feature lets police agencies, working with call center employees, activate a code within the vehicle's electronics. That will limit engine speeds to allow pursuing police to catch up with and retrieve a stolen vehicle.

OnStar is standard on 95 percent of General Motors vehicles in 2008; more than 80 percent of subscribers use their system at least once during the first 30 days of ownership.

And OnStar is reaching more deeply into the vehicle for information. For example, a system uses antilock brake sensors to count wheel revolutions to navigate, if the global positioning signal is lost.

Diagnostics to dealers?

OnStar also offers customers a vehicle diagnostics e-mail, although it doesn't link directly to a car dealer. Still, DiSalle notes that GM dealers have significantly higher retention rates with e-mail subscribers than with customers who do not have OnStar.

"What we've seen with OnStar Vehicle Diagnostics is a unique customer touch point with a ton of value because the customer receives a ton of information with red, yellow and green indicators" for maintenance items, he says.

OnStar is introducing a program called Dealer Maintenance Notification in which the customer can choose to send information directly to a dealer. But the customer must choose to do so.

In attempting to build dealership-customer relations, DiSalle says, any effort "without the customer being a strong or willing advocate or participant is probably flawed."

(Source: Automotive News)

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