Telematics: The Game-Changer for an Entire Industry?

Eric Steinbecher, President Automotive Aftermarket – Schaeffler Americas (FWB: SHA)

Telematics: The Game-Changer for an Entire Industry?Eric Steinbecher, President Automotive Aftermarket – Schaeffler Americas (FWB: SHA)

Telematics, a term that combines the prefix “tele” (meaning “distant”) with “informatics” (the study of information processing), refers to a technology used to monitor a wide range of information generated by an individual vehicle or an entire fleet. In other words, telematics is all about transmitting information over long distances. Telematics systems gather data such as vehicle location, driver behavior, engine diagnostics and vehicle activity, and visualize this data on software platforms that help fleet operators manage their resources.

At least that was how the technology was initially envisioned until it was introduced to the consumer market by General Motors, EDS and Hughes Electronics in 1996 with the launch of GM’s OnStar service. At the time, this early telematics iteration was primarily intended to enable Cadillac drivers to contact an OnStar operator in the event of a vehicle emergency. Fast-forward to 2019, and the increasing connectivity capabilities of today’s vehicles are reshaping the landscape of the automotive industry.

Most owners of late-model cars are already accustomed to seeing a message on their dashboard’s display screen alerting them to their next scheduled service. They might even get a text on their smartphone with an all-too-convenient “click here to accept your appointment.” But that appointment will be made at the dealership, not at an independent repair shop.

So, how did the dealership know about the car’s service needs in the first place? The vehicle in question is connected to the “cloud,” and it is constantly sending information about the car, its driver, its surroundings as well as any devices connected to the vehicle – such as a smartphone and the attendant digital information about its owner – back to the manufacturer.

To stay competitive and relevant, the automotive aftermarket industry must be able to offer the types of value-adding services that dealerships already provide

In fact, according to an IHS Automotive study, the world’s connected vehicles will generate 350MB of data per second by 2020. Not surprisingly, this information is highly prized because, in addition to making cars smarter, safer, and more efficient, the data can be monetized by whoever controls it for other business opportunities.

Does this mean the automotive aftermarket industry is on the cusp of a revolution? Provided that the automotive aftermarket— and, by extension, the independent repair shop and other market players— has access to the treasure-trove of maintenance and operational data generated by today’s connected vehicles, the opportunities appear boundless.

Of course, data security is of paramount concern for all stakeholders, including the manufacturer, the dealer, the independent repair shop and, of course, the owner of the vehicle. Because if the automotive industry releases a type of “open architecture” that permits anyone to access a given car’s data, the risk of allowing the vehicle to be compromised, i.e., “hacked,” increases exponentially. And such a scenario, of course, threatens the safety of the driver.

Accordingly, the need for cyber security is how automakers justify their proprietary stewardship of the data generated by their cars. This puts the onus on the automotive repair industry to offer the same security standards as the automakers, so that regulatory statutes can be enacted that let owners decide who controls the data generated by their vehicles— or, at least, who can have access to this information.

Ultimately, the true owners of this data are the consumers— the vehicle owners—and they should be able to control how their information is processed or stored.

In an effort to begin establishing a more level playing field for consumers, European lawmakers have created a regulatory framework through legislation such as the EU’s “Block Exemption Regulation,” which grants vehicle owners the freedom to chose where to have their car serviced without the risk of nullifying its warranty. As a result, automotive suppliers, parts distributors, and repair shops in Europe enjoy a measure of legal certainty to ensure that a variety of actors can compete in the automotive aftermarket. Nonetheless, provisions for sharing telematics data still need to be added to the European legislation, so that the car owners can ultimately decide who has access to their vehicles’ data.

Here in the United States, the situation is more ambiguous. The U.S. Congress and several state legislatures have been considering various bills which would require automobile manufacturers to provide the same information to independent repair shops as they do for dealerships. Indeed, Massachusetts has been at the forefront of this initiative with its 2013 Motor Vehicle “Right to Repair” Law. For the foreseeable future, however, a legislative solution on a national level to this critical issue appears elusive.

Which is precisely why the automotive after market industry’s corporate leaders need to lend their expertise—and their voices— to help law makers come up with a fair and equitable resolution to this potentially existential situation. I joined the Automotive Aftermarket Suppliers Association’s Board of Governors earlier this year to give Schaeffler a key role in helping to advance the interests of the North American automotive supplier industry, and I encourage my counterparts in our industry to consider making similar contributions of their time, energy, and ideas.

In order to stay competitive and relevant, the automotive aftermarket industry must be able to offer the types of value-adding services that dealerships already provide. Telematics can facilitate this leveling of the playing field, but the prerequisite for offering these services is access to data for all players in the automotive aftermarket. That will be the true game-changer for our industry.

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