Automakers in Europe once harboured high hopes they could earn a fortune by turning the car into an intelligent, rolling communications centre, reports Automotive News Europe. But by 2005, those dreams have not materialised. No car manufacturer has figured out how to make a profit from telematics.
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The lack of European communications standards, languages and the failure of the industry to agree on a common definition for telematics doesn’t help.
Ambitious systems such as the General Motors OnStar wireless communications network, successful in North America, have not taken hold in Europe.
Now the telematics business is retrenching. This time the goals are more modest.
“Many of the OEMs in Europe bit off more than they could chew in the early days. Most of those have retreated, gone away or have been reduced to something more manageable,” says Phil Magney, principal analyst with Telematics Research Group Europe of Sindelfingen, Germany.
As an example, Magney pointed to recent DaimlerChrysler decisions to end new subscriptions to its TeleAID call centre-based services and to stop a project meant to create an in-car portal to share vehicle data using personal digital assistant devices.
Mercedes-Benz spokesman Matthias Brock says the company remains committed to integrating consumer electronics such as mobile phones within vehicles using wireless connections. While navigation systems integrated with telephones and in-car sound systems are a must-have part of luxury cars, he says Mercedes will focus on standardised rather than proprietary solutions.
“We will only implement mature technologies in our cars that provide a direct benefit for our customers,” Brock said. Mercedes believes future applications will be more influenced by consumer electronics, and less car-specific.
The factors faced by Mercedes are those that cloud the immediate future for true telematics, which means turning the car into a communications centre sending and receiving information from many sources.
Companies such as BMW and Volvo remain committed to providing monitored telematics services through providers such as ATX Europe of Düsseldorf, Germany and WirelessConnect. Those services require, though, huge commitment and the OEMs use them to enhance their brands, offering such services as live traffic updates with routing information for drivers. BMW collects data from its subscribers to analyse traffic patterns.
Such data collection may be the true Holy Grail for telematics as it moves from luxury brands to volume brands, said Steve Millstein, president of ATX.
ATX provides telematics services to BMW and recently signed deals with Renault and Citroen. ATX Europe intends to be a pan-European player.
“To this day I don’t believe there’s really a credible provider of a pan-European solution. And the reason is, they [OEMS] came from wanting to make money as a feeder to their core business in their core country,” Millstein says.
Telematics consultant Michael Sena of Sweden-based Michael L Sena Consulting says true telematics offerings are really about two-way communication that makes the car itself an active part of a data network.
“All those cars driving around unconnected are driving around as they did 100 years ago,” he says.
Sena has done significant work for Volvo since 1996. He is not a Volvo employee but says that carmaker’s quiet but persistent effort to set up call centres has made it a pan-European provider to a new generation of connected vehicles.
A call centre-based telematics system can change the way people drive. That capability ought to make OEMs realise they must support the technology as an essential feature of the car rather than as a separate revenue-generating feature, Sena says.
The value could come to OEMs when they are able to de-bug faulty software on a new platform without resorting to a general recall. “Any car company that gets involved in telematics because it’s going to earn money in telematics today is thinking about it completely incorrectly,” says Sena.
