Telematics to Give Advance Notice of Parts For Repair



Sometimes it's not important what you put into a situation. What is important is
what you get out of it. This is the new concept for telematics. 



The Big 3 have spent a lot of energy pushing information into vehicles through
telematics products like the OnStar system. They were trying to find an extra
revenue stream. Well, that idea didn't exactly work. Many consumers weren't willing
to pay for added security and convenience, especially now that the economy has
taken a downturn.



Aftermarket and technology companies are taking another look at telematics as a way
of bringing information out of the vehicle instead of pushing information into it.
"Telematics devices enable proactive management rather than reactive repair,"
according to MechanicNet Group, Inc's recently distributed white paper describing
the ways warehouse distributors, jobbers, installers and consumers can benefit from
telematics as an information resource. The paper, "the Telematics Opportunity:
Emancipate Capital in the Automotive Aftermarket," eludes to on board diagnostics
giving installers, jobbers and warehouse distributors a heads up on what parts may
need to be repaired on vehicles days before those vehicles enter the bays. This
would work or all 1996-present vehicles.



Phil Van Nest, president of Mighty Distributing System/West, Inc., a wholesale
distributor in the Greater San Francisco Bay Area, said a two-day notice - instead
of a 15-30 minute notice - "could provide the parts needed by our customers
throughout the greater Bay Area out of our San Jose warehouse rather than needing
multiple locations to provide last minute service." An advanced notice would
increase his sales revenue and inventory turns in his one San Jose location with no
real increase in investment in parts or other facilities. 



Because of less uncertainty and urgency, MechanicNet estimates that advanced demand
signals will reduce channel inventories by $20 billion.



MechanicNet President Steve Liao said today’s sensors and diagnostic computers
detect 20% of the problems in vehicles. In time, the percentage will increase. He
added that any advanced notice can give jobbers and installers an advantage.



Right now MechanicNet is working with telematics companies to track mileage of
vehicles. This way when the service interval arrives, the consumer is notified to
bring his car in and the installer and jobber is notified in advance of the parts
requirements for the service interval.



“The first step is to wire jobbers and installers, because the information will be
coming eventually,” he added. “As far as installing devices in the car, people are
already doing that for fleets.”



He expects this type of telematics to be more prevalent in three years, but none of
this can happen until jobbers and installers have moved from the phone to the
computer. He said jobbers and installers must be willing to make the investment,
because consumers are not willing to add another $30-$40 monthly payment for
another service.



“Otherwise it will take jobbers and installers two or three years to be ready for
the service. By then the dealers are taking back all of the customers, so the
aftermarket does have to be ready for this,” he added.



Article By Christina A. Shutovich, Managing Editor