Telematics: A 21st Century Service Opportunity? 

Motor Magazine

Steve Ford     



April 2002. Far from being merely a high-tech toy, telematics holds real promise as
an automotive service tool. 

--------------------------------------------------------------------------------

 

As you read this article, somewhere on the network of California roadways a vehicle
is transmitting its on-board diagnostics and emissions-related information to a
California Air Resources Board (CARB) Internet-monitoring system in an experimental
program.



This application of diagnostic information being communicated from a vehicle to a
central data-collection site not only demonstrates present technology at work, but
more aptly a blend of future technology fused with an earlier breakthrough. After
all, consider the fact that OBD I arrived in 1981 and the next-generation OBD II
made a full U.S. rollout in 1996. Adding a wireless component is really not much
more than patching a cellular telephone connection into the equation, or does this
vehicle-monitoring concept reflect an even more powerful advancement?



It's no coincidence that there's a parallel between the current CARB research with
the wireless transmission of OBD data and the underlying driving force of the first
iteration of OBD-reduced air pollution. From the perspective of a state that leads
the world in racing after the best solutions to tackle smog, California wants to
extend beyond simply knowing when a vehicle has an emissions-related system failure
to actually predicting an emissions-related malfunction and preventing it from
occurring in the first place.



The wireless-monitoring concept entails the identification of a component that
displays incremental degradation and cites a predictive path toward a time- or
mileage-sensitive failure pattern. Targeting a weak component, such as a lazy O2
sensor, and replacing it before it locks in an arbitrary lean data parameter would
result in fewer net emissions. The auto industry refers to this predictive failure
element of a component life cycle as prognostics.



Stuck in Traffic: The Wireless Market

As CARB tests the concept of wireless monitoring of OBD II-equipped vehicles, 84
million Americans are on U.S. roadways approximately 500 million hours per week,
according to the U.S. Dept. of Transportation. To the vast array of other
"wireless" infrastructure participants around the globe, a giant industry "paradigm
shift" is about to unfold-and one of the benefactors appears to be the auto service
industry.



However, since the pathway of this paradigm is unprecedented, so, too, is the exact
outcome we can expect. For example, will the full-scale model of telematics
increase the share of service business retained by the OEM franchised dealers, or
will it mean more opportunities for the automotive service aftermarket? Will
consumers summarily reject the telematics model the industry has prepared to offer,
much as consumers did with the dot-com implosion? Or will the market simply unfold
in a manner that parallels the arrival of the personal computer in the 1980s?



The Connected Service Industry

While the Motor & Equipment Manufacturers Association (MEMA) cites OBD systems as
contributing to reduced voluntary auto maintenance by consumers (such as reductions
in traditional tuneups and spark plug replacements), telematics points to
heightened awareness of service needs for consumers.



In fact, where consumers have been increasingly encouraged to disregard
maintenance, such as seeking periodic and seasonal inspections (battery care,
ignition service and safety inspections) due to so-called (or so-perceived)
maintenance-free cars, telematics offers an entirely new customer relationship
tool.



"The future of telematics points to new opportunities for the service community to
help consumers, as this relationship is redefined by the car itself, instead of the
customer, notifying the shop with actual on-board data about a vehicle
malfunction," said Steve Liao, president of MechanicNet Group, Inc., a Fremont,
California-based shop management and customer relationship management services
company.



"Our market research indicates that once new cars travel beyond the OEM warranty
period, 85% of them enter the aftermarket with no more record or connection with
service providers-and we see telematics as a natural extension of our existing
customer-relationship management services for our shop customers," he added.



Liao explained that by enabling independent shops connected to the tele-matics
infrastructure to utilize Internet and web-based communications, these same shops
will be able to access location-based and OBD-sourced component-failure
technologies to assist their customers. This would mean that a "connected" shop may
send an e-mail to alert a customer about an about-to-fail O2 sensor prior to
activation of the MIL and initiate a service appointment.



"And the shop and supply chain can accommodate that customer's part need with
increased speed, ensured availability and reduced infrastructure cost due to this
seamless telematics-communication link," Liao noted.



OEM or Aftermarket?

The keys to the telematics debate rest in the areas of data and information
generation, retrieval, monitoring and storage-which prompts the question, Who owns
the data a vehicle produces in the first place? 

At the most sophisticated level, automotive telematics consists of two-way
communications that includes vehicle-originated wireless data. 

The entities with first access to such data would appear to be the OEMs. This point
is underscored by the fact that since 1996, pioneering entrants such as GM's OnStar
and Ford's Wingcast service providers have offered telematics-enabled safety,
security and global positioning system (GPS) location-based assistance and
convenience features. 

On-board vehicle operating data is simply another packet of information for these
already functioning systems. Moreover, a simple cell-phone connection with the
vehicle enables the transmissions for these current technologies.



"There are a lot of players in the telematics field, but it makes the most sense
for the OEMs to embed telematics in their own vehicles because the benefits to them
are considerable," said Phil Magney, telematics analyst with Minnetonka,
Minnesota-based Telematics Research Group. "In addition to the valuable ongoing
vehicle operating data they can obtain from their vehicles for service and warranty
management and monitoring, telematics offers OEMs a new customer-relationship
management tool, as well," he added. This element would appear to make the OEMs the
main benefactors of the new technology.



From another perspective, some industry experts view the customer as the most
powerful player in the emerging telematics field, and the winners in this sense may
be neither a singular camp of either the OEMs or the aftermarket. Instead,
strategists might need to be more sensitive to the lessons learned in the marketing
of video recorders, personal computers and even dot-coms.



"In our passion to exploit e-commerce, many have placed greed before need," said
Fred Nader, president of AutoTech, a technology development firm based in
Southfield, Michigan. "Instead of viewing the fundamental needs and desires of
customers first and the benefits to the automobile second, many have put GPS and
infotainment features like stock quotes from the Internet as the leading focus of
telematics. 

We believe the wisest participants in telematics will be those who wrap their
products around customer-expressed values rather than merely pushing telematics
technology. It's really about connectivity, access and leverage for the consumer,"
Nader noted.



Connectivity, Access & Leverage

Nader explained that a customer value of direct Internet access for multipurpose
benefits is a key feature of the proprietary software of a telematics-based system
he represents, called Paxgrid.



"Paxgrid's approach to telematics makes the customer's vehicle simply another
'node' on the Internet. It's an 'always-on' connection similar to what consumers
get at home via a DSL or cable modem, but with the added advantage that each
vehicle has its own static, or permanent, IP (Internet protocol) address," Nader
said. The Paxgrid-enabled telematics OBD II monitoring system is one of a number of
emissions-testing methods being evaluated on government-owned CARB vehicles cited
at the beginning of this article.



Nader explained how Paxgrid's static IP address differs from a dynamic IP address.
A dynamic IP address is what an AOL or Yahoo! Internet browser gives you while
you're online with one of these Internet services; once you log off you're no
longer an Internet entity. However, with the Paxgrid technology, your vehicle has
an always-on status on the Internet.



"I am firmly in favor of telematics for emissions testing because the vehicle is
more likely to be serviced promptly in a connected environment-in whatever
transmission form it might take," said Jack Heyler, a diagnostics consultant for
the Automotive Service Councils of California. Heyler was a key industry proponent
of the single standardized diagnostic connector, which later became a key OBD II
requirement.



"This is what we have envisioned as 'OBD III,'" Heyler said. "And OBD III would be
very positive for air quality and the automotive service industry. However, my one
reservation would be the lack of a single standard for the transmission and
receiving of the data."



Authentic Convergence

In the automotive industry, as well as in many technology-intensive fields,
buzzwords are created and exchanged in what sometimes tends to sound like babble.
When it comes to telematics, you might hear, 

"We have a scalable enterprise that is a true integrator and it will rationalize
the infrastructure of the automotive supply chain."

As much as that sentence may sound hollow, it's actually substantive. 

Here's the translation: "You know your scan tool with bidirectional control? You
see your shop service and shop management software? Of course, you're aware of the
Internet and satellite technologies and the 'wireless' systems, such as cell phones
and PDAs (personal data assistants) and wireless shop equipment, right? Now, add a
fleet of vehicles on our roadways that offer wireless OBD II data that connects
with all of these 'existing' technologies, and your imagination is the only limit."



Stars and Costars

In addition to the U.S. leaders OnStar (GM) and Wingcast (Ford), and their European
counterparts Tegaron (DaimlerChrysler) and Targasys (Fiat), the cast of companies
currently auditioning for costarring roles in the unfolding telematics drama
include IBM, ATX, MobileBriefs, Infomove and MobileAria, among a host of others.
Take a number, as they say at the bakery.



According to the Telematics Research Group, OnStar alone accounted for more than
1.3 million customers by the third quarter of 2001 and is adding 100,000 customers
each month. The company rivaling OnStar, with roots back to 1996 and the first
telematics-equipped Ford (Lincoln), is ATX. While OnStar offers services to non-GM
brands, including Honda, Audi and Lexus, ATX delivers telematics services behind
the scenes, with some 300,000 total customers as of the third quarter of 2001. ATX
customers include Mercedes, Jaguar and BMW.



"Imagine three buckets-back seat, front seat and under the hood," said Bill Binnig,
vice president for business development at ATX. "The [telematics] back seat
represents infotainment, the front seat is safety and security along with routing
assistance, and under the hood is vehicle operating information. We see importance
in accessing and managing all three areas."



The other powerful yet smaller entities of MobileBriefs, Infomove and MobileAria
are crafting partnerships in key areas in and around global OEMs and the
communications market. Yet, while being neither an automaker nor a
telecommunications company, perhaps the most integrated enduring participant may
prove to be IBM. With mass and true stratification that spans almost every facet of
what telematics can and should be, IBM is linked to the OEMs from vehicle inception
during design and engineering, right through life cycle service and diagnostics.
Mercedes is just one of the companies that's tapping into the multifaceted IBM
model.



"It takes a thousand minds to design a product and 10,000 to manufacture it, but
only one to service it and either win or lose the customer forever," said Alan A.
Chakra, Service Aftersales Solutions business unit executive, IBM Product Lifecycle
Management. 

"Extending the product concept and design knowledge throughout the process all the
way to field service will enable major reductions in warranty and operation cost
and achieve high customer retention at the same time."



Chakra explained that by accessing a fleet of hundreds of thousands of vehicles
with IBM software and hardware support technologies, the service industry and OEMs
will be able to track and respond to warranty issues. This aspect of telematics
alone promises advances not only in vehicle reliability and build quality, but also
in safety-which reinforces government interest. The National Highway Traffic Safety
Administration (NHTSA) is encouraging automakers to adopt widespread event data
recorders, while insurance companies and safety agencies are lobbying for automatic
collision notification.



Mobile Asset Management

Fleet operators are another large contingent in the telematics fan club. Companies
that operate large numbers of service or delivery vehicles must consider these
machines "mobile assets" and work to minimize costs and downtime. Santa Barbara,
California-based Vetronix Corp. was one of the first companies to respond to the
needs of the fleet market in 1999 with the introduction of a device called the
CarPort as an add-on feature for Clarion's in-dash AutoPC.



The Vetronix CarPort enabled the AutoPC to access and display OBD II-related
information for the driver. CarPort also established a ready transition for
Vetronix to produce a subsequent wireless-transmission device called the
WirelessRoad that would enable this OBD II data to be accessed by fleet operators.
Today, fleet operators around the nation are monitoring both the GPS and serial
data being transmitted from their vehicles 24 hours a day and during every mile of
travel.



The vehicle's WirelessRoad transmission is captured by cellular networks and
converted into an Internet-ready format that enables web-based monitoring by the
fleet operators. This translates into enhanced speed in addressing vehicle service
needs and possible breakdowns, as well as facilitating optimal routing strategies
for fleet operators.



Scan Tools With Global Reach

Every one of the auto industry's major component manufacturers has a team or teams
of people working to find a way to surpass the competition before the telematics
market unfolds. This is because global suppliers such as Delphi, Visteon, Denso,
Lear and Bosch are in a race that starts on the manufacturers' drawing boards.



These leading suppliers are eager to help the auto manufacturers introduce their
vehicles into the wireless world, via telematics. They bring many years of
knowledge and experience designing vehicle systems to the task. At Visteon, one of
their many tier one products is climate-control systems.



"One of the areas that we have groups looking at is, 'What data is coming off that
climate-control compressor that would indicate something's about to happen?'" said
Tom Thyson, Visteon product and marketing manager for electronics. "And, 'What does
the data look like as it goes into failure mode?' We're able to look at the failure
mode backward in the pressures and temperatures and determine what started to
happen so that our customers can use telematics with prognostics to diagnose their
fleet vehicles before a failure happens."



Across town in Detroit, OEM supplier Delphi also sees opportunity in the
aftermarket and the wireless shop. This perspective was revealed most recently by
Delphi's $15 million acquisition of Troy, 

Michigan-based Automotive Technical Resources, Inc. (ATRi). ATRi had pioneering
successes in facilitating the wireless shop with technical assistance, remote
access to diagnostic and repair information using a PDA, as well as computer- and
web-based technical training (CBT and WBT). Under Delphi, ATRi has emerged with a
new name: Delphi Integrated Service Solutions.



The Perfect 'Tune'

As always, the market will determine the winning formula for what works and what
sells.



"You can have a trump card, but if the rest of the industry isn't there with you,
your trump card is worthless," said Visteon's Thyson. "You've got people providing
data, people aggregating data, the service center, the wireless carrier, equipment
in the vehicle, the sales and marketing side and the end consumer. But success will
come down to addressing the weakest link," he said.



Perhaps that's what makes the role of telematics a pivotal development for the
service industry in the 21st century. After 100 years of analog systems, we've
shifted to digital systems. Combining vehicle microprocessors with the world of
wireless communications is an undeniably powerful continuation of that trend.



In a way it's as if we're about to sew a wireless thread through a number of
up-to-now unconnected patchwork systems. Telematics may introduce a welcome new
dimension to the service world. Yet the coming steps that will create the ideal
customer, vehicle and system standard may prove as daunting as slipping that
"wireless thread" through the eye of a needle. The tele-matics future offers
promise that should be as rewarding as it is challenging.



Steve Ford, The Car Guy¨, is a Detroit-based automotive print/radio/ TV journalist
and ASE advanced-level L1 certified automotive techni-cian/instructor. You can
e-mail him at thecarguy@thecarguy.com; his website is www.thecarguy.com.