Who Will Win Service and Parts Battle? OEMs and Dealers or Aftermarket?
• Vehicle connectivity systems are starting to play a key role in automotive service and parts – but the big question will be: Who wins?
• The race is on between OEMs and their dealer networks versus aftermarket service and parts to partner with the consumer, said Vehcon CEO Fred Blumer.
• Blumer, a telematics expert and former top executive at Hughes Telematics, was the keynote speaker at AAIA’s 2013 Aftermarket eForum, along with execs from Delphi, UPS, and eBay.
• OEMs claim ownership of most all the data generated by embedded telematics systems – dealers are first in line to get repair and maintenance data.
• “Within the next 10 to 15 years – unless the automotive aftermarket develops an effective response – they will be shut out of the service market significantly,” Blumer said.
• Blumer described how an embedded vehicle diagnostics system sends data packets back to the OEM’s customer relationship management (CRM) system.
• CRM system analyzes data – email is triggered on regular maintenance or an emergency need, sending consumers directly to OEM dealers.
• Most OEM embedded systems come at an ongoing price to the consumer.
• “The cost to the consumer is cash, as many of these systems have monthly fees; control, as consumers’ rights to their own data gradually are eroded; and choice, as consumers may have gotten a better deal by going somewhere else for service,” Blumer said.
• Key is to partner with the consumer, according to Blumer – encourages aftermarket to provide alternative, attractive options to OEM systems.
• Consumers will realize the value of their data and seek to utilize it to their benefit – he thinks usage-based insurance (UBI) is an example of a win-win for both insurance carrier and consumer.