Automakers around the world are figuring out ways to give consumers the online access they want in their vehicles; the problem is they want it free of charge.
Mike Jackson, CEO of AutoNation, recently headed a panel on car-driver connectedness for the Automotive News World Congress and discussed the fact that more and more drivers expect to use smart phones in their vehicles and get the applications offered on those phones without paying any sort of fee.
The trouble is that this attitude erases the possibility of subscription revenue generated by the in-vehicle services that the companies provide in order to be competitive in the telematics industry, which is growing rapidly.
Jackson spoke on the sidelines of the World Congress, saying, “The future is not the subscription model. The litmus test is if we can’t change them from Day 1, when we’re delivering the car, we’ve got a problem.”
ATX, a telematics services supplier out of Dallas, sponsored the opening panel of the World Congress.
A recent survey done by Synovate Motoresearch found that 75% of all luxury car buyers and 50% of non-luxury car buyers expect in-vehicle telematics when they purchase a new vehicle. It keeps them connected to the outside world, even while driving.
CEO of Synovate Motoresearch, Scott Miller, recently spoke about the types of services consumers wish to use in their vehicles. Included in the list are entertainment, navigation, vehicle diagnostics, emergency response and links to hand held computers and phones.
Miller also noted that one of the most important aspects of providing these services is to be sure the hardware in the vehicles is updatable; that is, able to change with changing technology and upgrades and compatible with different types of technology that drivers carry with them.
One of the leaders in providing such technology, Ford Motor Company, was praised by Jackson. He said their Sync voice activated infotainment system is an example of the type of open-architecture technology that automakers are seeking to provide for their customers.
Vice president of global advisory services for the consulting firm CSM Worldwide, Paul Haelterman, said that automakers can generate revenue in the future with an investment in telematics now, namely by enabling their cars’ electronic safety features to communicate with the driver’s online communication technology.
For example, says Haelterman, GM enabled linking between navigation systems on the latest model SUV with the camera on the vehicle that aids the driver when driving in reverse. He said that on the previous model, only 5% of SUV customers chose to purchase the navigation system. However, the number rose to 50% when the rear-view camera/ navigation screen feature was added.