Telematics – Hype or Real Opportunity?

Connecting Motorists to your Shop, a Dream come true?

This article doesn’t talk about telematics in commercial fleets. In commercial applications the value is proven and more and more vehicles are equipped with remote data connectivity devices, be it for real-time theft detection, location based services or break down prediction. It doesn’t talk about internet connectivity in cars either, the OEMs are doing everything they can to provide the capability reliably.

What this article is trying to cover is the  availability of a reliable plug’n play solution for the independent aftermarket to help service advisors stay connected with their customers and the vehicles they drive, and to provide value, starting with breakdown avoidance, saving money by predicting the next service only when it is needed and more. The conclusion I came to is that no solution is readily available which meets the requirements of this market. But, there is light at the end of the tunnel and it is not an incoming train.

In full disclosure, I had been actively involved in providing telematics solutions for over 3 years, when I was leading a business unit at Bosch providing telematics to commercial fleets. I then formed AutoVitals (=the Vital signs of an Automobile) with the mission to create a solution to the independent aftermarket. Autovitals got even a patent granted for Remote service evaluation and recommendation. I have not stopped monitoring the market and test emerging solutions, just to find that they are all dealing with the same challenges. You will see below my findings. They do not claim to be a comprehensive market analysis.

Critical Success Factors

What does a successful hardware solution looks like?

Today’s solutions in the market look all very similar, a DLC plug-in (image on the left) converts diagnostic commands into bluetooth and the motorist’s phone picks them up. A central server (not shown in the image) collects the data, makes sense of them and provides the browser based application and mobile application to the shop, and motorist.

There are dozens of providers with very similar solutions. The all share the following challenges:

– They stick out too much, and worse, in some makes (e.g., BMW, Toyota trucks etc.) you need to hardwire them or your knee will knock it out of the socket while driving.
– Once the DLC connector is used for a subsequent diagnosis session, often in a different shop, the plug-in is likely not to be re-inserted.
– The coverage is OBDII only, so getting even basic data as an odometer can be a challenge.

The solution needed is a true plug’n’play device that is not much more than 3 millimeters tall and a true pass-through device, so that it can stay plugged-in permanently. The OBD II coverage is nice for a starter but it needs to be extended to OEM specific coverage.

The motorist needs a solution they can plug in and forget and do not need to visit a shop for installation.

What does a successful software application looks like?

Today’s solutions focus on peace of mind and the ability of reading DTC codes. In addition location based services are offered since the DTC coverage is not ‘sticky’ enough as you will see further down. Since we are a CRM provider we have asked close to 5,000 motorists in our survey whether they would pay $9 per month or $99 a year for a solution, which warns them about DTCs, breakdowns and keep connectivity back to their trusted shop. Here are the results:

• 15% had experienced an engine light situation in the past and would pay for the solution
• The remaining 85% responded as follows:
  • 31%:”Not interested at all”
  • 33%:”I pay the shop already, why do I need to pay twice?”
  • 21% would pay for the solution

Pretty sombering, don’t you think? 36% responding that would they would be interested makes this solution not sticky enough in my book. A few years ago at a telematics conference the renewal rate of the Onstar service was said to be 17%. Only 17% of first year users did renew Onstar, once it required a fee to be paid. Dang.

Solutions for the motorist have to provide value frequently enough, the occurrence of DTCs is not one of them. Adding location based services and making the service advisor take phone calls from an angry dad, whose daughter took the truck and left town unauthorized (geo fencing) doesn’t seem to be added value promised to the shop.