Telematics – shifting gears in the automotive industry

The automotive industry has emerged stronger than ever having recovered from the economic meltdown of 2008-09. However, much has changed between then and now. Markets, especially in the developed countries, are saturated. Customer demands across geographies are considerably different - what sells in a developed country is not what is required in an emerging economy. Therefore, automakers must seek new business models to boost continued spending on existing vehicles rather than drive consumption of new vehicles.

This explains the renewed focus on telematics by the automotive OEMs. Telematics is a communication technology for the automobile industry that is based on information flowing to and generated from vehicles via wireless networks. It is the convergence of wireless communications, location technology and in-vehicle electronics, pushing the automobile industry into the information age.

Telematics enables OEMs to wirelessly gather a wide range of data from geographical location and usage patterns to maintenance needs and performance information. Through telematics gateways, OEMs can track their customers even after the sale of the vehicle. Telematics also enables OEMs, their partners and independent content creators and aggregators to deliver content such as maps, weather forecasts, traffic conditions, news, stock quotes, social updates, messages and entertainment to the automobile.

Telematics can offer several benefits, such as:

Safety - automatic crash response, emergency and crisis assistance
Security - remote door lock/unlock, stolen vehicle tracking
Navigation - providing maps, turn-by-turn assistance
Vehicle health reports - diagnostics on the vehicle performance
Internet connectivity - providing social networking apps, RSS feeds like weather forecasts, stock updates, news bulletins etc. right into the vehicle

Telematics is not a recent feature in the automotive industry. In fact, General Motors' OnStar was the first to explore this technology and venture into it commercially as early as 1996.The prohibitive cost of infrastructure investment and lack of consumer demand at that time meant that telematics remained side lined for some time in the automotive sector.

It was the advent of smartphones and the subsequent consumer demand for instant and constant connectivity that revived telematics and made it a serious contender in the automotive industry. Most telematics setups can now use smartphones to connect to the vehicle. These combined reasons have added a fillip to the telematics phenomenon.

Read more about the opportunities for telematics and how service providers can help, in the paper, 'Telematics: Gear Shift in the Automotive Industry.'

Given the market dynamics, I believe that automotive OEMs will, sooner rather than later, embrace telematics fully across markets. Irrespective of the challenges hovering on the horizon, the benefits that telematics provides — connectivity, safety and vehicle reliability to motorists — will ensure that this industry will continue to grow.?

About the Author

Amit S Holey is a Business Analyst with the Automotive vertical and is currently the Functional Lead for one of the largest global Telematics Corporation. He has been with Wipro since June 2009 and has developed a deep understanding of Telematics and Service Oriented Architecture through business process analysis, design and implementation. He actively contributes to knowledge initiatives related to emerging trends in the Automotive Sector.

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