The Fully Networked Car workshop ended today with cautious optimism about the future of telematics (see this link for presentations and bios). However, most participants agreed that it is not clear how telematics will expand in the automotive world. There are at least two issues that need to be resolved. One is people in the automotive and telecommunications industries haven’t yet figured out too many business models that have a good shot at making money. They want to know who will do the R&D? Who will pay for the deployment? How much are consumers willing to pay for the service? With the global market for vehicles leveling off car manufacturers, as well as parts suppliers, may not feel like they have the resources for the innovation that’s necessary to make telematics ubiquitous.
The other major issue is related to the idea of the automobile becoming a place where consumers, or other companies, plug in multiple aftermarket devices. Car manufacturers place a huge premium on safety and they feel that they need to be in control of what goes into a car. This way they can guarantee that safety will not be compromised. Will that new in-car gadget distract the driver and cause him/her to crash his brand new car made by company X? If the answer is yes, the reputation of company X will take a hit.
However, participants also agreed that telematics will save car manufacturers money in the long run and that consumers will be willing to pay for the new services. For example, savings are expected to come from remote diagnostics. Using remote diagnostics, car manufacturers can reduce warrantee costs since they can catch problems as they start developing and not when they have fully developed on thousands of vehicles. For example, if a car company receives data from tens of its model Y cars about a particular problem that developed after the first 5000 miles, they can immediately check the manufacturing process and prevent the problem from reoccurring in the future. Consumers are also willing to pay for services like OnStar. OnStar’s new vehicle diagnostics service has over 2.5 million customers and they are adding over 3000 new customers a day.
Andrew Kun