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New Interest in Automotive Telematics

The automotive industry is under significant pricing pressure, this is nothing new, however car manufacturers are doing more than ever to reduce production and distribution costs whilst at the same time having to cut the price of models sitting in the show room in order to sell them. Car manufacturers are selling more vehicles than ever before, however profits continue to shrink as margins become tighter. This is not helped by the fact that there has been over capacity in world car production for the past 7 years. Car manufacturers have investigated every logical way to improve margins by investing in new production and distribution processes, back-end Internet infrastructure, shifting production to low cost labour sites, shutting down plants, outsourcing non-core processes (production, logistics, parts production etc) but this is not enough. Many manufacturers have yet to fully benefit and utilise IT and the Internet in production, scheduling, planning etc and more investment will be required here, however it is the deployment of front-end IT solutions in vehicles that not only could provide new revenue streams for manufacturers but provide valuable information for feed back into the backend infrastructure and planning and in-turn help reduce costs and produce vehicles that end-users really want.

The Internet and computing has been slow to impact what for many people is their largest purchased item apart from the house, the car. The last 12 to 18 months has seen the commercial penetration of the Internet into cars, not in terms of a mobile device that just happens to hitch a ride but as an integrated, networked system. What are the benefits to the user of owning a networked car? These could include:

- Self diagnostics - checks for more than amount of oil and washer fluid but wear on brake-pads or

  driving line

- Networked entertainment and communications - keeping the kids quiet and the parents in contact

  with the office when stuck in a traffic jam

- Traffic information - helps to provide quickest route to reach destination based on real-time traffic

  situation

- Alerts - provide information to vehicle breakdown services or garages before problem results in 

  the vehicle breaking down. Provide information to emergency services if driver gets into difficulty

  or the vehicle is broken into or stolen

- Security - improved communications with emergency and breakdown services. Vehicle protection

  systems which are more 'intelligent', reducing the number of unnecessary blaring car alarms

Also benefits to the manufacturer:

- Learn more about customers - this has not been possible before. Can track journey length, how

  people drive, time spent in cars, locations visited, number of journeys - all this can be used to

  design cars and services to meet market requirements

- New revenue streams to tackle - provide vehicle servicing to customers, communications

  solutions, new re-sale opportunities

- Able to reduce number of unwanted models by market and number of vehicles produced by being

  better able to assess market demands

- Develop improved customer relationship management and gain customer buy-in.

There are a variety of telematic solutions available in the market, performing different functions and providing different levels of functionality. The solutions available are beginning to be developed to meet different user requirements and this differentiation will become more pronounced in the next 12 to 18 months. Some of the telematic solutions currently available are;

Figure 1.1 Functions and Availability of Automotive Telematic Solutions

Ref: TP0040A02V01