Impossible, you say? How could an Internet company buy such an American manufacturing behemoth? A quick look at the math reveals how. With a market cap of about $150 billion, Google could gobble up GM — which has a market cap of about $8 billion — for breakfast and still have plenty of room for lunch. Derek Kaufman, president of C3 Network, recently raised this possibility at the Aftermarket eForum in Chicago. The potential for scenarios like this illustrate the fact that things are changing very rapidly in the automotive industry, and changes inevitably filter over to the aftermarket. It was unfathomable 10 years ago that an Internet company had the power and money to buy an American car manufacturer.
Just as a company like Google seemingly came out of nowhere with new business models and became a powerful force to be reckoned with, the automotive aftermarket is undergoing a series of changes and encountering trends that will be real earthshakers. One trend is telematics. Ask six people what telematics is and you’ll likely get a host of varying answers. Regardless what the answer is, there’s a lot of money to be made in telematics.
Vehicle telematics is anything to do with sending, receiving and/or storing information about a vehicle. It can be the ability to pay tolls remotely, global positioning, vehicle tracking, collision notification, accident prevention, mobile data and mobile television, to name a few. Sirius satellite radio already has Sirius Backseat TV in the works. It’s a system that will broadcast shows from three kids’ networks, much like the company now broadcasts music and cable news programming live to in-car receivers.
There was a time when people marveled at how an on-board computer became the brains of an automobile. When that happened, there became a critical need for independent repair shops to be able to access the information inside those on-board computers. Now a whole new array of information-laden and information-gathering devices are coming on-board which makes new revenue streams possible.
The impact of the future of telematics on the aftermarket is outlined and reviewed in “Telematics Primer – The Aftermarket’s Role in the Telematics Future,” which was produced by the Automotive Aftermarket Industry Association (AAIA). It’s a 101-page guide to telematics that explains potential applications, opportunities and challenges to the aftermarket. The study is available free to AAIA members and costs $1,250 for non-members. I’d suggest everyone get a copy, review it and get ready for the future. Go to aftermarket.org for more information. While telematics is used in some vehicles today, it will flourish down the road.
Remember 12 years ago or so ago when people thought the Internet was just a quaint diversion for geeks and there weren’t really any practical uses? I remember people asking, “What’s email? Why would I send one?” Well look at it now. Telematics is poised to follow the same route. Think the idea of a car driving itself is just silly? Some of them can already park themselves.
