Unander_ Telematicsvalley

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TECHNOLOGIES, PARTNERSHIPS & BUSINESS MODELS

Developing new value-added services in the navigation markets

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Unander_ Telematicsvalley

  1. 1. Challenges for the Automotive  Industry and Telematics opportunites Jan Unander Executive Director Telematics Valley
  2. 2. Telematics Valley • Non profit organisation • Established 2001 • 47 members • European organisation • Collaboration community • Focus on business • Not a Science Park • Workshops, seminars,  conference • Based in Gothenburg, Sweden
  3. 3. Automotive Industry Challenges • Traditional car business model under threat • Future alternative business models unclear
  4. 4. New rules in Europe ‐ 2003 Block Exemption is gone – Any vehicle distributor can sell any brand – Any vehicle workshop can do warranty work on  any brand (if fulfills certain standards) – Information access to all players Spares and services approx. 70% of the profit
  5. 5. What happens? TIER1 New players ‐ wholesalers 14,000 workshops Consolidating the 141 Countries market
  6. 6. Consequence • Less visits at dealers – First owner – Second, Third owner • Less feedback from vehicle status • Reduced brand loyalty OEM lose the customer relation  and thus loyalty
  7. 7. Decreased revenues • New car sales • Service and spares • Acessories
  8. 8. Can today’s telematics driven  services contribute to loyalty? 
  9. 9. Difficult to create attractive services? Frequency  of use Navigation My  car.com ECall Perceived value © Jan Unander
  10. 10. Difficult to create attractive services? Frequency  of use Navigation My  car.com ECall Perceived value © Jan Unander
  11. 11. There are attractive services! Frequency  of use True need RELATIONS Hands free telephony E‐Mail SMS Navigation My  car.com ECall Perceived value © Jan Unander
  12. 12. How are car services generated? Internet driven services OEM Driven Hardware services driven services
  13. 13. Is this the new gold mine? Internet cloud Apps Cars App‐store Developer
  14. 14. Internet driven Services • Attractive applications are key to success • I‐Phone business model – revenue sharing was a  winning factor – today adopted by more suppliers • Market penetration attracts developers (Nokia 41%,  I‐Phone 11%, TomTom?%) • Need marketing channel – App stores • Applications needs big volume to give big business • Car centric services not enough volumes • Car OEMs have to accept consumer services
  15. 15. Internet driven services? Frequency  of use Relations Spotify Listen,  Talk!  Skype Facebook MSN Relations Perceived Read, value Look!  © Jan Unander
  16. 16. Conclusions • Services – Not always safe to consume – Not always easy to use • Business model – Small market – Same consumer want one subscription – Drive bandwidth – restrictions – Low income for all parties
  17. 17. Safe/Secure services • ECall* • BCall • Lock/ unlock door • Immobilizer • Honk the horn * EC –all new cars in Europe must have eCall from 2014 i.e. a telematics platform will be in the cars by default.
  18. 18. Safety/security driven services? Frequency  of use Honk the horn BCall Lock/unlock Immobilizer ECall Perceived value © Jan Unander
  19. 19. Conclusions • Services – Functions not services – Negative ‐ insurance • Business model – Not prepared to pay for 
  20. 20. Ownership • Vehicle technical status • Proposals of actions • Commercial offers • MyCar.Com
  21. 21. Conclusion • Services – Marketing not services • Business model – Not prepared to pay for 
  22. 22. The internal business case Challenges • Very high warranty cost  • New financial solutions for driving a car • Block exemption gone – lose contact with owner – need to keep in touch (2:nd, 3:rd owner)
  23. 23. Reduce warranty cost 1600 Number of defects 1400 1200 1000 800 1 = W Proactive M1 ith Series. 2 600 =W Series 2 . ithout ProactiveM 400 3 200 0 1 2 3 4 5 6 7 8 9 10 11 12 Months Production  Delivery to start dealers Phase 1 Phase 2 Phase 2,5 Capture  LUS LUS vehicles Fleet vehicles from production © Jan Unander
  24. 24. Conclusion • Through an telematics based early warning  system cost can be reduced throughout the  life cycle of the car. • Ford estimate warranty cost >$650/ vehicle • JD Power rating better – sales better
  25. 25. New financial solutions • Private leasing • Extended warranty • Service contracts
  26. 26. Conclusion • When contracts replace purchasing  yesterdays income becomes a cost in  contracts • Relations are kept longer with contracts
  27. 27. Keeping relation with owners • Need a communications channel to reach owners  (going to independent garages) • 2:nd and 3:rd owners are very hard to identify 
  28. 28. Conclusion • Creating adapted offers communicated via  telematics will improve relation and business • Special offers to 2:nd and 3:rd owners that  have special needs
  29. 29. Summary  Car manufacturers • Probably few Internet based car adapted services ‐ low income  • Safe and security services are functions ‐ difficult  to charge for • Controlled ownership services are Marketing Tools  – no income • Internal business case is a huge profit maker and  decisive for the car manufacturers survival  
  30. 30. Message  TELEMATICS IS THE ENABLER AND  SHOULD BE FACTORY FITTED IN ALL  CARS * THE BUSINESS CASE IS ALREADY  THERE eCall will force car manufacturers to install a telematics  platform from 2014 anyway.
  31. 31. Thank you

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