Much has been written about telematics lately, and although to many people the term “telematics” is just another new buzzword, the fact is that it has been around since 1997, when it was first used by General Motors on some Cadillac models. At that time though, telematics was rather primitive and was used primarily for remote guidance, and some limited diagnostics and communications between vehicle systems. However, telematics has now evolved into an exact science that underpins many critically important control functions on modern vehicles, and as such, telematics may have profoundly negative effects on the independent vehicle repair industry unless its benefits to the average car owner is leveraged correctly. Thus, in this article, we will take a closer look at telematics in terms of what it is, what it does, and how independent workshops can use it to better serve their customers, starting with this question-
There are many definitions of the word, but this one from Wikipedia is perhaps the most comprehensive. It states the following-“Telematics is an interdisciplinary field that encompasses telecommunications, vehicular technologies, road transportation, road safety, electrical engineering (sensors, instrumentation, wireless communications, etc.), and computer science (multimedia, internet, etc.).
Put in simpler terms, the above means that modern vehicles now have the ability to relay a wide range of operating parameters, including diagnostic information, to a remote location via the internet, using ethernet communications protocols. On the face of it, this appears to be a brilliant idea and in fact, almost all vehicle insurance companies and vehicle fleet managers the world over now use telematics to compile data on both driver behaviours and vehicle use, all without drivers being aware of the fact that they are being monitored.
In the case of Australia and New Zealand, the use of in-vehicle telematics systems is expected to reach about 1.1 million by the year 2020, with the main drivers behind the increase being health and safety regulations becoming more stringent, relatively high road user charges levied on heavy vehicles, and changing vehicle usage patterns in both Australia and New Zealand.
As matters stand now, a large number of international operators, and an equally large number of small and medium vendors of telematics systems are active in both Australia and New Zealand. However, while competition is good in any field of endeavour, the large number of participants in the field of telematics in this region has fragmented the industry, with most large vendors focussing primarily on non-privately owned vehicles.
While the foregoing may be of some interest to some readers, what is more interesting is the fact that as far as diagnostics via telematics is concerned, most vehicle manufacturers have designed their telematics systems in such a manner that all diagnostic and servicing information is channelled to authorized dealerships. In practice, this effectively deprives the independent repair trade of a large number of potential repair jobs, which will remain the case until the currently proposed Right to Repair legislation is enacted in Australia, which begs this question-
Telematics has now reached a point of development that allows for the retro-fitment of aftermarket telematics devices, which means that in practice, there are now two types of connected vehicles; those that leave the factory with an embedded telematics system, and those that use aftermarket devices. However, herein lays a problem for both vehicle owners and independent workshops, because aftermarket telematics systems are not created equal, and none provides free communications between vehicles and workshops.
Nonetheless, the process of a vehicle communicating with a dealership would generally follow this pattern-
1) A fault develops on the vehicle, and the CHECK ENGINE light illuminates.
2) The embedded telematics system gathers all relevant data, which could be as much as 7000 or more lines of data.
3) The data is transmitted to the dealer with which the vehicle owner has an account.
4) A technician connects with the vehicle using a suitable scan tool, which enables the technician to read fault codes, view live data and (depending on the nature of the problem) make adjustments to some systems, or even to clear trouble codes.
Thus, with an embedded system, a dealership technician is able to diagnose faults, and in some cases, to make some repairs and/or adjustments while the vehicle is hundreds of kilometres away from the dealership. Moreover, the fault report is sent to both the dealership and the vehicle owners’ designated email address for future reference.
In the case of a retrofitted telematics system, the process would be largely similar, but depending on the vendor of the system, communications between the vehicle and an independent workshop could be either through email, or via a dedicated smart phone app, which raises several issues, the most pertinent of these being the-
Lack of sufficient diagnostic data
Currently, and despite the Australian Consumer Laws, there is no Right to Repair legislation in Australia that applies to passenger motor vehicles, which means that vehicle manufacturers are under no obligation to make captive diagnostic and repair information on their products available to the independent repair trade.
In some other jurisdictions however, some vehicle manufacturers have elected to make some information available to the independent repair trade, but in practice, this usually amounts to less than one percent of the data that would typically be sent to an authorized dealership. To make matters worse, only a tiny fraction of the information that is made available pertains to diagnostic/fault data, and to add insult to injury, this information is made available at an exorbitant charge to both the vehicle owner and the workshop. So even though an independent workshop is prepared to pay to access telematic data from a vehicle, that workshop will not receive the following-
As a practical matter then, independent workshops are at a huge disadvantage, which is compounded by the fact that-
Telematics costs money
When a customer buys a new vehicle, the cost of the telematics system (and its operating costs) is typically included in the vehicles’ purchase price. However, with aftermarket telematics systems, the customer has to pay the cost of installation as well as the cost of transmitting data. Moreover, since many, if not most aftermarket telematics systems’ communications are based on smart phone apps via the vehicle’s data link connector, an independent workshop has to carry the cost of establishing and maintaining a communications network between itself, and all its customers who have aftermarket telematics systems in their vehicles.
Moreover, given the facts that only about one in every twenty vehicles in Australia is expected to be equipped with an embedded telematics system by 2020, and that aftermarket systems can generally not yet deliver the same amount of information as embedded systems, the cost of establishing and maintaining a telematics communications network with only a few customers could represent a formidable economic obstacle to many independent workshops.
Given all of the above, the question now becomes this-
There is no doubt that this image of an empty workshop may be an eloquent description of the risk to independent workshops that fail to recognise the serious challenge that telematics represents, and to implement suitable preventative measures to counter its negative effects on the independent vehicle repair trade as a whole.
So what can an individual workshop owner/manager do to minimise the risks that telematics brings? This writer has some experience of the issue, and while it was not always easy to persuade his clients with new vehicles that the dealerships do not always have all the answers to their concerns, a focussed strategy aimed at his existing customer base stemmed the tide of customers flocking to the dealerships. Here is how you can achieve the same result-
Acknowledge the challenge
There is no doubt that as a technology, telematics presents the independent repair trade with a formidable, but surmountable challenge. If one views the technology objectively, there is very little difference between the advent of telematics, and the advent of technologies like OBD II diagnostics, common rail fuel injection, DSG transmissions, and many others.
In every case, most independent workshops rose to the occasion and overcame the challenge through training or retraining technicians, investing in new equipment, and exchanging information via discussion forums and other online platforms. In fact, many independent workshops now employ technicians that are more knowledgeable on a wider range of vehicles than many technicians that are employed at dealerships, and there is no reason why the large-scale adoption of telematics should change that.
Launch a marketing campaign
This should not be a general campaign like all the others you have done before. If you want to remain relevant and competitive in the telematics age, you have to focus your campaign on two things, these being to-
Create awareness
If you have a website or other internet presence, use it to explain to your customers exactly what telematics is and how it can benefit them, as opposed to railing against the vehicle manufacturers for attempting to funnel all repair work and servicing of new vehicles to the dealerships.
However, the trick in getting this right lies in creating a balance between the benefits of telematics, and how you, as an independent workshop can deliver at least some of those benefits to your customers at a lower cost than any dealership can. Here are two examples-
A factory-fitted telematics system will alert a driver that his new vehicle is due for routine servicing by flashing a message on the dashboard. The system will also book an appointment at the dealership, and invite the driver to confirm the booking by “clicking” the message or performing some other action. You could focus your awareness campaign on the fact that you routinely perform services on similar vehicles, and that no vehicles’ warranty will be affected in any way simply because an independent workshop had worked on it, as per the Australian Consumer Law guidelines.
One other service you could offer is to interpret fault and/or diagnostic data that a telematics system generates. Many customers have no clue about how their vehicles work, so this service could include a thorough explanation of the issues that were identified, as well as a price estimate on the required repairs.
Let it be known that you are on top of developments in aftermarket telematics
Telematics is set to become big business in the next five to ten years, and while very few current aftermarket systems are as efficient as embedded factory fitted systems, the fact is that many car owners will begin to “take the word” of an automated diagnostics system over the word or knowledge of the average mechanic or technician. This is simply a part of the human condition, and is to be expected in the age of computerised vehicles.
As a practical matter however, you have to dispel the misconception in the minds of many people that telematics systems can actually diagnose faults and defects on their vehicles. To do this effectively, you need to use all your advertising platforms and outlets, and maybe some new ones as well, to let both your new and prospective customers know that even the most advanced telematics systems cannot fix their cars; they can only inform a car owner that something is amiss. In fact, since telematics systems are “spliced’ into a vehicle’s diagnostic system, telematics systems are generally no better at detecting faults than high-end scan tools are, which means that regardless of how a fault was detected, your well-trained and experienced technicians are not only able to identify the root cause(s) of any issues, they are also able to fix them right the first time.
While the above example of a focussed marketing campaign will go a long way towards retaining your customers, there are three more things you need to do, these being to-
Invest in high-end diagnostic equipment
In this writer’s experience, vehicle manufacturers sometimes release software updates and patches via embedded telematics systems that download them, and then keep them in “storage” until an opportunity arises to install them. Although most independent workshops are able to perform routine services and even major repairs on late model vehicles, it is also true that independents do not always have access to the latest software patches and updates that may have to be installed in some circumstances.
However, many high-end diagnostic computers are programmed with at least some updated software, meaning that when an aftermarket telematics system identifies a software issue, chances are excellent that you will have the updated software on your equipment. Most manufacturers of diagnostic equipment also offer regular software updates, and although these can be pricey, updates are never as expensive as losing a customers’ business because you cannot fix a software problem that his newly installed aftermarket telematics system had identified.
Train, and/or retrain your technicians
The objective of retraining programs should not be to teach your technicians how to fix cars; the primary objective should always be to equip your staff with more than a nodding acquaintance with telematics.
Many technicians fear what they don’t know, so the obvious answer is to train your staff in the finer workings of telematics, in the sense that no telematics system, neither embedded nor aftermarket, can diagnose faults and problems in quite the same way that a human brain can. It is perhaps worth mentioning to your technicians that telematics is nothing more than a series of pre-programmed functions that can connect to the internet to book service appointments, or to transmit detected/stored fault data to a remote location.
In fact, some diagnostic computers with Bluetooth functionality do pretty much the same thing (albeit over shorter distances), but the fact is that once a technician understands that telematics can’t replace him, that technician is more likely to view telematics as a valuable diagnostic aid than as an arcane system that is somehow better at diagnosing faults than he is. It is not.
Prepare to bear the cost
There is no escaping the fact someone has to pay for data transmission costs, either when receiving information from a telematics-equipped vehicle, or when transmitting a possible diagnosis and/or solution to a vehicle owner.
Of course, it is impossible to supply accurate cost estimates of setting up a telematics server here, but the point is that your customers are unlikely to want to spend more on a telematics-based call than they would on a normal text message or WhatsApp exchange. Thus, since many people already have an unfavourable view of mechanics, you can perhaps offer a free telematics communication service during normal working hours, and charge a nominal fee after hours or over weekends and holidays.
Telematics are here to stay, and while it has not yet had a major impact on the profitability of the independent car repair trade in Australia, this is bound to change as the uptake in embedded OEM telematics increases. In fact, it is almost certain that the rapid increase in embedded telematics systems in new cars will bring about a profound change in the way independent workshops retain, and generate new business.
Therefore, unless the independent repair trade embraces the changes that come with telematics and manage to present a united front to vehicle manufacturers in terms of the level of information they require to maintain late model vehicles, there is an excellent chance that large numbers of independent operators will find it increasingly difficult to remain profitable in the next few years, which is not in anyone’s best interest.
