Volvo, apps and fleet telematics

Volvo, apps and fleet telematics

With the pace of innovation quickening and commercial fleet management systems growing in complexity, Volvo Trucks is looking for ways to give its customers the complete end-to-end solutions they increasingly come to expect—without losing control of the supply chain to third party providers of services.

Its solution? An OEM-operated app store-style ecosystem in which core vehicle-centric applications—such as remote vehicle diagnostics, driver safety and fuel efficiency—are supplied by vehicle manufacturers and the rest comes from third-party service providers in the form of apps. (For more on apps, see Special report: Telematics and apps.)

“It is important for us as OEMs to hold onto development in vehicle-centric areas,” says Christiano Blume, Group Trucks Sales & Marketing EMEA, Volvo Trucks.“No one can develop vehicle-centric applications better than the OEMs.”

However, it is equally important for the OEMs to recognize that other fleet management areas like cargo security, navigation and traffic management are better left to the aftermarket, Blume adds: “It would be very difficult for us to compete because of the pace at which [these applications are] evolving … The only way to achieve the best offering in the shortest time at the best price is by collaborating.”

Vehicle-centric service layers

Many of the necessary preconditions for Volvo’s idea to take off are already in place.

Most truck manufacturers in Europe and North America offer their own fleet management systems, which could provide the basis for the new ecosystem’s vehicle-centric service layer. For instance, Volvo’s Dynafleet transport information system comes with fuel consumption and emissions management tools, real-time vehicle monitoring, driver times tracking and two-way messaging between the office and connected trucks.

It is currently available in Europe, Australia, North Africa, and the United States (where it’s called Volvo Link), and was just introduced in Brazil. Volvo plans to offer Dynafleet in other Latin American countries, too, primarily Argentina, Peru and Chile, either late this year or early next. (For more on telematics in LATAM, see Special report: Telematics and emerging markets.)

Line-fitted hardware platforms for fleet management, another key precondition, are becoming increasingly common. In the United States, all of Volvo’s medium-duty VM trucks come equipped with Volvo Link.

Similarly, every Mercedes-Benz Actros tractor truck sold in China now comes with FleetBoard, the German company’s proprietary fleet management system.And the numbers will continue to grow, according to Frost & Sullivan, which estimates that nearly half of all vehicles produced annually by 2017 will have fleet management system as standard line-fit.

What’s more, truck manufacturers already work closely with third-party solution providers across a broad range of service and geographical areas, particularly where more complex solutions or niche products are required or where multi-brand fleets need to be integrated under a single fleet management system.

The app store concept

Still, it may not be enough to translate Volvo’s idea into reality, at least not any time soon, judging by how little progress the app store concept has made in the extremely risk-averse passenger vehicle space and how new the idea of advanced commercial vehicle telematics is for OEMs in general.

“They are very stressed,” says Cileneu Jose Peres Nunes, a board member at Zatix, Brazil’s leading provider of stolen tracking and fleet management solutions. “They are not familiar with telematics … and they are dealing with this new situation, with GPS, telecommunications, software updates. It’s a new world.”

According to Blume, the idea for an app store-style ecosystem has been discussed within Volvo and with various OEMs for the past year and a half. The feedback has been encouraging enough for Volvo to launch several pilot projects, though he declined to provide specifics. “Each time we are talking in seminars or things like this, a lot of people would like to know more, because it’s a really interesting market for suppliers of software, developers and so on,” he says.

But the concept will take time to mature as an agreement on common communication protocols is needed to enable third-party service providers to build platform-agnostic solutions. Also, more OEMs need to get onboard.

Brazil as test lab

In more than one way, Brazil could serve as the perfect test lab for the concept.

It is the first place in the world where all new vehicles will be required to come line-fitted with a tracking and immobilization module to help a government crack-down on vehicle theft. “Standard fitment of telematics devices is a key issue for services in general,” says Blume, who just returned to Sweden after a long stint in Brazil as a solution manager for Volvo Group Telematics. “It would be a big step ahead without too much effort.” (For more on Brazil, see Telematics in Brazil: Ensuring security for cars and cargo, Telematics in Brazil and LATAM: Going beyond GPS, Telematics in Brazil: The law of the market, and Emerging telematics opportunities in Brazil.)

And as the Brazilian tracking module is also designed to host other value-added services, including fleet management, it could also provide valuable insights into how best to operate the kind of open platform Volvo envisions.

As far as third-party service providers are concerned, many appear to be onboard with Volvo’s concept, particularly if it means they can get out of the business of installing black boxes and focus on value-added services. But they are unlikely to want to surrender the business of providing vehicle-centric applications, nor are they convinced that the OEMs can do a better job than they can.

Jan Stojaspal is a regular contributor to TU.

For more on fleets, see Special report: Fleet telematics.

For the latest on fleets, visit Telematics for Fleet Management USA 2012 in November in Atlanta.

For all the latest telematics trends, check out Telematics Japan 2012 in October in Tokyo, Telematics Munich 2012 on October 29-30, and Content and Apps for Automotive USA 2012 on Dec. 4-5 in San Diego.

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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