Car connectivity, the next big thing, challenges the aftermarket

Network carriers target cars for new growth as smart phone market stabilizes.


Global Information Inc., a research firm, recently released a report claiming that the connected car will be the "next big thing" for the automotive industry. Future generations of cars and devices will rely more on cloud-based, back-end systems for content, information, and services, turning the car as we know it into a huge data repository, opening new avenues of business opportunities for service industries and content providers. (To access this report, click here.)

The research notes that network carriers like AT&T have identified the automotive market as the next growth area, given the penetration of smart phones. AT&T recently signed an agreement to provide connectivity across most of the 2015 fleets for Chevrolet, Buick, GMC, and Cadillac. According to the new report, this marks a new strategy to keep carriers growing as their traditional consumer mobile device markets slow.

This holds major importance to the automotive aftermarket. Cloud-based communications between aftermarket shops and their customers have the potential to change the relationships shops have with their customers. New software can help keep older cars competitive and up-to-date for years past release, essentially tied to the regular maintenance of the vehicle.

The new research brings to mind a seminar at the recent AAPEX show in Las Vegas on telematics, the marrying of GPS and other wireless communications for remote diagnostics. Telematics-enabled remote diagnostics helps to streamline shop management. Shops can know what level tech is needed before a car comes in for service or repair, and what parts and tools might be needed for a repair. In addition, telematics allows shops to offer customers a maintenance plan tailored to their driving habits. Every time a vehicle has a “check-engine” light, worn brakes or needs an oil change, the motorist can be contacted and directed to a shop for service.

The Automotive Aftermarket Industry Association (AAIA) has kept close watch on car connectivity as the technologies evolve. AAIA recognizes that connectivity presents a major opportunity for the aftermarket as well as some big challenges. As noted during the AAPEX seminar, automakers view connected vehicles as a way to direct more aftermarket work to their dealerships.

Fortunately, technology companies that already have strong relationships with the independent aftermarket have recognized both the challenges and opportunities. Delphi has developed an aftermarket solution specially designed for the independent aftermarket. Delphi, winner of the 2012 “AAIA Telematics Challenge,” presented its solution at the AAPEX show.

Jim Dykstra, owner of a Troy, Mich. repair shop, described his experiences using third-party data in conjunction with Delphi telematics during the recent AAPEX telematics seminar. He called it the best thing to ever happen to his business.

Aftermarket shop owners and service techs need to recognize how technology is changing the automotive industry. It is creating new aftermarket tools that can help independent shops play a bigger role in automotive aftermarket than ever.