Oems Gear up for U.S. Telematics Market
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Vol. 22, No. 1◆◆ www.hansenreport.com February 2009 Aftermarket OEMs Gear Up for Connectivity U.S. Telematics Market Disconnect Next Generation Telematics and Safety Connect for Toyota models, beginning in late summer 2009. Every year it gets harder and harder for Protocol Makes Headway Rather than contract with a service mobile electronics companies serving the For the last ten years or so, General provider, Hyundai will use the Microsoft aftermarket with replacement parts and Motors, Mercedes and BMW have had Auto software platform, as Ford does, to accessories to do what they do. “It’s gotten the U.S. telematics market to themselves. deliver infotainment solutions including almost impossible to replace some radios,” Now every other major carmaker in the telematics. Hyundai’s product debuts in said Joe Gross, OEM sales and design U.S. wants in on telematics, and everyone 2010. manager for Kicker Audio. As electrical/ except for Ford and Hyundai has been electronics complexity grows, the after- out shopping for a telematics service pro- OnStar Is Looking Beyond GM market finds itself increasingly locked out vider. All major carmakers selling vehicles In the past, OnStar provided tele- of the vehicle. in the U.S. are expected to be up and run- matics services to other carmakers includ- “Coming from aftermarket roots and ning with telematics services by 2012 or ing Audi, Volkswagen, Suzuki, Isuzu and having worked in the installation bay, I sooner. Acura. But with OnStar’s transition from understand their frustrations,” noted Mr. First launched on 1997 model year analog to digital technology in 2008 and Gross. “You’ve got heating and air condi- Cadillacs, OnStar is today installed in its decision three years ago to make tioning controls all part of the radio con- 95% of GM models. With more than four OnStar exclusively a differentiator for trols. If you take this radio out you now million subscribers, it is by far the world’s GM vehicles, those business relationships lose multiple other features. Aftermarket largest telematics operation. Mercedes went away. Since carmakers are demon- head-unit sales are way down.” and BMW introduced OnStar-like ser- strating a new interest in offering Data from the Consumer Electronics vices with automatic collision notification telematics services, GM decided some Association backs up Mr. Gross’ observa- in the U.S. in 2000. months ago to again market OnStar to tions. Unit demand for aftermarket head In November 2009, Ford began offer- other carmakers. “We don’t have to make units in the U.S. declined by 23% in 2008 ing telematics services as part of its Ford a big investment to provide services to alone. Sync offering. Chrysler has a long-term other carmakers; our capabilities already agreement with Hughes Telematics to exist,” noted Nick Pudar, OnStar vice U.S. Factory Sales of bring telematics services to 100% of president for planning and business devel- Aftermarket Head Units Chrysler models. Last month, Toyota an- opment. “We have been going back to nounced a deal with ATX, a division of folks and saying ‘we have the know-how Units in millions $ millions Cross Country Automotive Services, to and the experience; if you are interested 2007 8.8 840 provide services through Lexus Enform Turn to Telematics, page 3 2008 6.8 630 Telematics Service Provider Status in the U.S. 2012 4.5 350 2007 to 2012 CAGR: -12.6% -16.1% General Motors OnStar, a GM subsidiary operating since 1995 Toyota Motor USA ATX will be the provider to Lexus and Toyota Data: Consumer Electronics Association Ford Motor Provides telematics services based on the Microsoft Auto software “If you are an aftermarket performance platform (Ford Sync) Chrysler Hughes Telematics is scheduled to start in June 2009 supplier and you don’t have access to the American Honda Will soon make a sourcing decision requirements, the specifications, the bus Nissan North America Will soon issue a request for proposals to telematics service providers systems, it could be extremely intimidat- Hyundai Kia Automotive Will provide Ford Sync-like services based on the Microsoft Auto ing if not impossible for you to manufac- platform starting in 2010 ture a performance upgrade product to Volkswagen Group In the market for a telematics service provider sell,” he cautioned. BMW Currently served by ATX; is considering proposals from ATX, Connexis Mr. Gross has been participating in the and WirelessCar for an NGTP compatible system Automotive Electronics Connectivity Mercedes Currently served by ATX; Hughes Telematics begins service in November 2009 Turn to Aftermarket, page 2 Aftermarket... Continued from page 1 Committee (AECC), sponsored by SEMA we had 15 suppliers with accessories ready “As an aftermarket supplier, if you don’t (Specialty Equipment Market Associa- to go.” get cooperation from a car company you tion) and the Consumer Electronics Asso- Many of those accessories, which can must reverse engineer the vehicle, a task ciation. The AECC so far has 60 members be installed by Scion dealers, are listed at that is monumental because you have to trying to address these integration and www.optomizescion.com, which SEMA handle all of the variations from vehicle installation concerns. They hope to some- set up with Toyota. When it comes to to vehicle. I know that from when we had how get carmakers interested in open ar- infotainment system options, though, to update OnStar systems from analog to chitectures and in making their vehicles there isn’t a great deal of choice. Scion’s digital. That’s one side of the question. more accessory-friendly. The committee OEM supplier, Pioneer, lists a couple of “On the other side is the car company has no permanent members from the tuners, a navigation unit and an audio asking, ‘what’s in it for me if I help you?’ carmakers at this time. amplifier on the site. And Alpine has a The only thing in it for them is protecting The AECC was organized by John single mobile navigation unit. the vehicle. From a cost benefit stand- Waraniak, SEMA’s vice president for ve- Ted Lopez is an interface product man- point, they can’t make a business case out hicle technology, who brought SEMA’s ager for Scosche Industries, a company of providing access.” efforts together with the Consumer Elec- that makes installation hardware for after- Mr. Acton, who recently left Connexis tronics Association’s connectivity com- market retailers and distributors. Mr. to start his own company, still wants to mittee. With 7,500 members, SEMA Lopez described how the aftermarket has help. “I am going to do my part to get companies do a total of $42 billion worth been dealing with car lines that aren’t ac- people like SAE and IEEE or whoever it of business annually, about one-third of cessory friendly: “We invest hundreds of takes to step up and facilitate this merger which is electronics. hours reverse engineering for each vehicle of consumer electronics and automotive line, sometimes spending $100,000 to do requirements.” He sees some scope for de- What’s in It for the Carmakers? it,” he told us. “Several years ago to build veloping OBD II further to make that an Mr. Waraniak would love to see the an installation kit for a navigation radio interface point or for an automotive USB- automotive industry adopt standards, in- we would simply have to locate the speed type spec. cluding the equivalent of a USB connec- sensor wire, the reverse/park wire and the “Eventually consumers will demand tor. “Then you could put in any audio e-brake wire and tap into those. But now access to the vehicle, and some carmaker system you want,” he said. “If you really you have to simulate all these different will decide that it wants to be the game want to innovate and develop new prod- actions in the car to make sure you iden- changer by offering that access. Then all ucts fast, you have to have open stan- tify each piece of code coming through the carmakers will do it,” he predicted. dards. We did a study with the Center for the data bus.” Mr. Acton can be contacted by email at Automotive Research. In one of the inter- When factory radios out of warranty [email protected]. ◆ views with the OEMs, a chief electronics fail, consumers can buy an OE replace- architecture engineer posed the question, ment radio at the dealer for anywhere ‘Why would I want to open up our vehicle from $600 to $1,300. Or they can by a to the aftermarket?’ We didn’t answer that radio in the aftermarket for $149, plus © 2009 Paul Hansen Associates, 150 one, because one of the members of his $140 to $200 for a Scosche interface box Pinehurst Rd., Portsmouth, NH 03801, staff answered it for us: ‘Because we may and another $49 for a Scosche trim kit to USA. Telephone: 603-431-5859. Fax: 603- not be able sell our vehicles.’ fit the replacement radio into the dash. 431-5791. Email: [email protected]. “The point is the consumer wants the Dave Acton is also on the AECC. Un- All rights reserved. Materials may not be innovation, and that is a differentiator to til 2004, Mr. Acton was a top electrical reproduced in any form without written help sell your vehicle. If you become what engineer at GM, where he last served as permission. we call accessory-friendly, you will sell director of global telematics. While at The Hansen Report on Automotive Electron- more vehicles,” declared Mr. Waraniak. GM he was one of the founders of the Au- ics is published 10 times a year, monthly; Perhaps the best example of an acces- tomotive Multimedia Interface Collabora- July/August and December/January are sory-friendly vehicle, according to Mr.