Q&A: Telematics in India—The road to profitability

Q&A: Telematics in India—The road to profitability

Sanjay Gupta, head of telematics and fleet management for Tata Motors Ltd. Mumbai, has handled middle- and senior-level assignments in sales and marketing of commercial vehicles and passenger cars since 1988. In 2011, he was appointed to lead the new telematics initiative of Tata Motors, launching fleet telematics services under the brand name Tata Fleetman in September 2012. Gupta talked to TU contributor Susan Kuchinskas about the services most likely to get customers to open their wallets.

When Telematics Update surveyed companies about the Indian market, respondents had no agreement about what telematics services customers there were most likely to pay for. They were evenly split among the four choices: navigation, fleet and security, in-car entertainment, and diagnostics/emergency and roadside assistance. What do you think and why?

Navigation. Onboard navigation with pre-loaded maps has not caught on in India, even though it has been around for several years. There are several reasons for this. First, there are inaccuracies in maps due to road or POI changes between upgrades as well as inadequate detailing. There's also a high prevalence of chauffer-driven cars in India where the chauffeur is also the navigator, while, mostly, people drive on familiar local routes. Finally, most smartphones have navigation, which suffices for the infrequent instances when navigation is required. (For more on telematics in India, see Telematics in India: Ready to grow, Telematics in India and Emerging telematics opportunities in India.)

Fleet telematics is already a paid service in heavy trucks as well as fleet cabs, and that will continue to grow. For location-based services to catch on, more value addition will be required. Tracking in commercial vehicles is already fairly common. Accurate traffic information and journey time estimation along with navigation will make a lot more people interested. Due to the high incidence of theft, reliable security services will find takers.

As for in-car entertainment, Internet radio has still not caught on in India. Even when it does, it is still hard to say whether people will opt for direct subscription against advertising consumption-based models. Currently there is an absence of large third-party service providers for emergency and roadside assistance services in India. However, demand exists, and people will pay for them

What partnerships are you forging or contemplating in the telematics landscape in India and South Asia?

Talking about India, I can foresee partnerships between auto OEMs and full-scale telematics service providers, telecom companies, software companies, such as Google, and providers of third-party services. (For more on telematics in southeast Asia, seeTelematics in Southeast Asia, part I and Telematics in Southeast Asia, part II.)

Are there niches in the developing ecosystem that need to be filled?

Third-party services are currently a void that needs to be filled for launching telematics services in areas like traffic information, convenience and emergency response.

Our survey respondents thought that, in the face of consumer lack of interest and the difficulty of finding a business model, automakers should lead deployment of telematics services. What barriers do you see, and how will you overcome them?

In the fleet and commercial vehicle space, the benefits of using telematics are tangible and demonstrable. The challenge will be to change habits, mindsets and a certain diffidence towards technology through information and education of customers. In personal vehicles, the task will be tougher due to the prevalence of smartphones, lack of third-party service providers and a predominance of chauffeur-driven cars.  Reliability and value of services will have to be established and demonstrated before customers will open their wallets. Automakers will have to consciously look at upfront risky investments with long payback periods. Another barrier that most automakers will face is that their competency and systems cater to product marketing. Service development and marketing will be a new area they will have to learn.  

Can you give us a look at what services might be deployed in the next two years, either by Tata Motors or others?

Fleet telematics, which is presently limited to tracking-based services, will see diagnostics and safety and security services getting added. In passenger cars, smartphone integration will be first off the block and will enable navigation and in-car infotainment. Some form of emergency and security services, as well as some convenience services, may also be launched.

What are you most excited about as you work in this industry?

Being in the thick of an unfolding future and being an agent of a rapid, far-reaching change lend both a palpable excitement and a sense of purpose.

Susan Kuchinskas is a regular contributor to TU.

For more on telematics in India and other emerging markets, see Industry insight: Telematics and emerging markets.

For the latest on telematics in India, visit Telematics India and South Asia 2013 on April 17-18 in Bangalore, India.

For all the latest telematics trends, check out V2X for Auto Safety and Mobility Europe 2013 on February 20-21 in Frankfurt, Telematics for Fleet Management Europe 2013 on March 19-20 in Amsterdam, Telematics Detroit 2013 on June 5-6, Content & Apps for Automotive Europe 2013 on June 18-19 in Munich and Telematics Russia 2013 in September in Moscow.

For exclusive telematics business analysis and insight, check out TU’s reports: In-Vehicle Smartphone Integration Report, Human Machine Interface Technologies and Smart Vehicle Technology: The Future of Insurance Telematics.

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