Telematics challenges the aftermarket; Experts claim options exist

Automakers stumble in efforts to use telematics as a competitive advantage.

Despite all the telematics products that have been introduced, Lanctot said telematics has not yet become a mass-produced product and that most consumers are not aware of it. “We’re not there yet,”  he said. “We (the automotive industry) have to figure out the message. The power of this is what it could become, not what it is.”

Automakers have introduced maintenance notification in some of their telematics solutions, he said. But they are struggling in coming up with a solution that will provide value at a cost consumers are willing to pay. Automakers have learned that customers don’t want to pay for the information these systems have been able to provide thus far.

“You (the carmaker) don’t want to make the customer pay for the embedded unit in the car,” Lanctot said.

He said it will take the automakers three to five years to figure out how to develop a marketable telematics solution, which gives the aftermarket time to react.

In addressing the aftermarket’s options with telematics, Lanctot noted that independent aftermarket shops may be able to come up with solutions similar to RepairPal, a provider of auto repair and maintenance information that directs consumers to independent shops.

He noted there is an aftermarket telematics solution called CarShield. CarShield, which Lanctot characterized as a small player, uses a digital transceiver to provide remote monitoring, email alerts, diagnostic reports and notification of unauthorized movement, according to its Website.

Summarizing the future of automotive telematics, Lanctot said: “This is a business model that hasn’t been taken on yet.”

Eric Berkobin of Verizon Telematics then described his company’s telematics solution. Verizon’s “InDrive” device is a plug-in solution that can connect to most vehicles built in 1996 and after. Its features include safety and security, convenience, diagnostics, emissions notifications and data analysis, Berkobin said.

As far as the competitive threat from automakers is concerned, Berkobin said he is not sure if automakers will ever provide telematics on a large scale. He said they have yet to prove they can give consumers something they want.

Berkobin said insurance companies have been great supporters of his product. They are not competitors. “Insurance companies don’t like being in the hardware business,” he said.





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