America News: Telematics to gain market share by losing ‘luxury’ tag

America News:  Telematics to gain market share by losing ‘luxury’ tag

With automobile giants deciding to install telematics as standard in all models sold in North America in 2007, and extending the initial free subscription period from one year to four, the North American telematics market is poised for significant growth.

“Since automakers constantly strive to distinguish their vehicles from others, the tactic of using telematics as a unique selling point can significantly promote their brands,” says Frost & Sullivan research analyst K. Sathyanarayana. “This would induce other participants to re-enter the fray with their own telematics offerings, consequently boosting demand.”

While the new strategies would undoubtedly increase the demand for telematics-equipped vehicles, once the initial free subscription period ends, customers may not renew the service.

Sathyanarayana suggests that a ‘lifetime subscription’ model with pay-per-use charges would be a better option, since this would retain customers for life and would also generate revenues from those that might not renew subscriptions otherwise.

Telematics is still considered a premium feature. For the real value of telematics services to be fully realised, they must lose their ‘luxury’ tag.

Customising the current packaged services and allowing customers to choose only features they want, such as turn-by-turn voice-activated off-board navigation and traffic updates, is guaranteed to attract customers and assure renewals.

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