The market for telematics technology is growing worldwide and the automotive aftermarket is in the best position to move the those products and services along faster than the OEs, says Derek Kaufman, president and founder of the C3 Network.
Kaufman, who presented "Telematics: A Major Threat or Opportunity for the Automotive Aftermarket" at the Automotive Distribution Network National Convention in down Nashville on Thursday, Feb. 26, said telematics is a difficult topic to talk and write about just because it's evolving so quickly.
"I believe telematics is an opportunity that the aftermarket has hands down over the OEs," Kaufman said. "The aftermarket can get the products to market faster than the OEs." The definition of telematics as it relates to the aftermarket is "the ability to eastablish a two-way connection with a moving vehicle."
Derek Kaufman, president and founder of the C3 Network, says telematics are an opportunity for the automotive aftermarket.
"I could list pages and pages of stakeholders in telematics," he said, saying that suppliers of the devices, information aggregators, computer companies, information providers are just some of them.
About 28 percent of the vehicles on the road today have telematics devices in them. By 2012, that number is expected to be 40 percent. GPS, or Global Positioning, is the foundation for telematics applications. Information such as speed, distance traveled, acceleration and decceleration can all be obtained through telematics.
All this technology is great, but the question for most in the aftermarket is about how to make money off telematics. He illustrated the example of OnStar, GM's telematics product, which is offered free the first year, then on a paid subscription service later.
This is unlike BMW, that gives the service away for four years, all the while, the company is collecting vital information about the vehicles. "They understand the value they're building in having all that data," Kaufman said.
Like many technologies, the price for telematics is dropping. In 2000, it used to cost about $2,000 to install a navigation system in a new vehicle; by 2008, that number had been sliced to about $800. In the U.S., there is about a $2.4 billion market for telematics and nearly $9.5 billion worldwide, which doesn't include handheld GPS units that motorists take into their vehicles.
"If I have a message for you, it's let's get on with it. Let's get our heads down, get working, and get on with it."