Issue: Jul 2005


Telematics is a tool, not a product



Now that the early expectations of the wired car have, to a large extent, failed to hit top gear, it is time to take a more pragmatic look at telematics. “Telematics is a technology. Navigation is an industry itself which just sometimes uses telematics as a technical environment,” says Jan Unander, Strategic Director of Business Development Teleca AU-Systems.

Now that the early expectations of the wired car have, to a large extent, failed to hit top gear, it is time to take a more pragmatic look at telematics. “Telematics is a technology. Navigation is an industry itself which just sometimes uses telematics as a technical environment,” says Jan Unander, Strategic Director of Business Development Teleca AU-Systems.
“Since the Telematics ‘boom’ started back in the beginning of this century I have claimed that there are no killer applications and that still applies. The reason for this is that the perceived value is too low to justify enough motorists paying enough money to finance the whole technical solution if they have the choice. So if the motorist has to pay the total bill for installing the necessary technology, no serviced is strong enough on its own,” he says.
“Telematics is by definition just an enabling technology. It is used to collect information from a sensor in a vehicle and send it via wireless to a receiving server. This server could be the infotainment centre of the vehicle or it could be a call centre. The data is manually or automatically inserted and transmitted wirelessly to a receiver either in raw format to be translated into information in a server or as information if translated already in the mobile unit. The information can then be acted upon by a human being or a machine,” he adds.
Teleca services to the automotive industry include in-vehicle electronics and software development, industrial IT and automation and services for developing after sales concepts that focus on business benefits..
Redefining telematics as a tool opens up a fresh range of opportunities, says Unander. “Wireless communication creates new business models and this also applies for the automotive industry. Not only within the vehicle industry will machines connected to a server by a wireless solution mean completely new opportunities. We find these opportunities in other industries like fork lift trucks, guarding companies, and original equipment manufacturers with fixed or mobile machines,” he says.
What hasn’t worked is offering telematics-driven services for which the driver pays. This has proven “very slow and costly,” says Unander. Changes within the auto industry are, however, creating a new wave of demand, which is driven by the needs of the OEMs. “Block exemption rules are gone in Europe. This leads to new competition for the core business of vehicle manufacturers. Sales of genuine spares, which are one of the main profit generators of OEMs, are being threatened by new players and Tier 1s. Extended warranty periods are also eating into these profits,” he says.
Vehicle ownership patterns are also changing to leasing rather than purchase, while periods between services have more than doubled in the past 20 years. These developments are making it more difficult for OEMs and their dealer networks to maintain contact with their customers.
“Products are becoming more alike and differentiation is difficult. Keeping repair and maintenance cost down will be a critical issue. Telematics driven diagnostics services and remote download and upgrade of software is a key functionality. For the vehicle manufacturer one of the crucial cost factors are to live up to the promised service level agreement as regards up time. Today maintenance is scheduled after estimated working hours. Maintenance is often done to often or sometimes too late to prevent from a break down.
“Most vehicles have CAN-bus or similar information bus infrastructure that can be tapped for information from sensors in the engine as well as from other electronic measures.

Telematics driven alert systems based on diagnosis will support the vehicle manufacturer to keep their customers vehicles up and running to promised level,” he says.
Unander believes that telematics is one of the tools which can help build relationships between customers and OEMs. “A small change in technology can create huge new advantages. Telematics-driven applications play a vital role for the vehicle manufacturers as well as the after market industry. The business case shows that the vehicle manufacturers benefit by dramatically improving their potential after-market sales, while creating a method for communicating new offers to the motorists, be they first or second owners of the vehicles.
Dealers will benefit as well. “Service work shops will have new opportunities to make their business more efficient and improve customer relations if telematics is involved,” he says. This is true particularly for the second owner. Dealers struggle to identify them. The second owner does not have the same tendency to visit the OEM-dealers for servicing. With better product quality and prolonged warranty this group will inherit the problems and also be the ones paying for the bulk of repairs. Telematics has a huge potential to support dealers in the identification process and can also be a tool for relationship building,” he says.
Communication is as important with the first owner. “As the first owner does not normally need to visit the OEM-dealer due to prolonged warranty periods of three years, no traditional service/ maintenance meeting will occur and the dealer loses the opportunity to strengthen the relationship. Telematics has a potential to create win/win communication even with this group.
Shifting to applications within the vehicle, Teleca Systems AB director of vehicle electronics and telematics, Peter Malmberg, believes that the future lies in short-range technology – and Bluetooth in particular – rather than long-range wireless communication. He describes Bluetooth as the ”low cost vehicle gateway”.
Teleca has developed a gateway between Controller Area Networks and Bluetooth, which enables rapid and cost-effective product development, which is attracting significant attention. Teleca´s reference design for a Bluetooth headset can also be used in the vehicle industry, he says. “The OEM can offer a very low-cost telematics platform with full flexibility using Bluetooth profiles,” he says. Bluetooth offers “full flexibility.” Applications would include hands-free telephone kits, payment of road tolls, navigation, payment of parking meters, MP3 and even remote diagnostics. According to Malmberg, the in-vehicle Bluetooth applications would be financed by the customer through the purchase of their own devices or through internal cost savings. He points out that the consumer already has a complete infrastructure for device integration, while content providers could follow the mobile phone model and subsidise devices in order to create a market for their services. Customers do not want to increase assets on their balance sheets and prefer to buy a service in a contract form, he says.
Teleca is, however, not committed exclusively to Bluetooth. It is an independent company which, “although we have close relationships with many of the leading manufacturers, tools suppliers, software and silicon vendors, we are not bound to any specific solutions or products. We always work with our customers’ goals as our only objective.
“In the field of telematics, our competitive edge as an engineering company is the telematics management consulting. By offering telematics business development hand-in-hand with the combined expertise from automotive, telecoms and consumer electronics, we are a complete telematics partner,” he says.


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