The study was performed by Derek Kaufman on behalf of AAIA, and he will present his detailed findings and recommendations at the 2008 Aftermarket eForum on July 14-16 in Chicago. 

Kaufman, president of C3 Network, has conducted extensive research on telematics in the automotive and heavy-duty aftermarkets and will give recommendations at the eForum for turning a potential threat into a business opportunity.

"The simple definition of telematics is that it's the science of measuring, sending, receiving, and storing information via telecommunication devices," Schmatz said.  "And in transportation terms, certainly it's the ability to establish two-way communication with a moving vehicle.

"It all starts with GPS navigation," she said. 

With advanced and assisted GPS, any vehicle can be accurately located and information documented and reported.  Using digital short-range communication (DSRC) to provide connection areas alongside highways, one can then communicate instantly. 

Beyond the OnStar type of alerts and communication comes the remote vehicle diagnostics and service notifications involved between the vehicle owner and the service repair professional using telematics.

"We know the NHSTA, EPA, and CARB are all stepping up their reporting requirements, and we should be prepared for those requirements to go electronic." Schmatz said. 

Soon, perhaps, downloads of safety or emission-related fault codes will be a regulatory requirement.  With telematics, continued vehicle scans done by an ECU or another controller need no longer be kept with just the vehicle but can be transmitted to the service provider or a personal vehicle database by cell phone, Schmatz said.

"We see an equal amount of risk and opportunity in telematics for the aftermarket companies," she said.  "On the one hand, we see the increase in exciting new products and services.  We se many portable or handheld devices that are increasing their technical capabilities and are generating the potential to address a good cross-section of all the cars and trucks on the road today, especially those that have not had telematic devices installed at the factory."

But, Schmatz said, "We see some downsides to telematics, or at least threats.  The power to connect to and communicate with a vehicle is also the power to encrypt and to silo the data associated with those communications."

Government agencies are demanding more data from the OEs on both safety and emissions items and, she said, and one could argue that those agencies could eventually mandate the automatic supply of safety- and emission-related fault codes directly to a data base. 

 
Another consideration, Schmatz said, is that the ability to gather GPS-related data allows OEMs to channel their customers back to the dealers for required service or maintenance.  However, the technology is increasingly portable, which gives the aftermarket an edge.  And because the primary GPS device is being tied to other systems and databases, the value of the data produced increases.

"The key to the aftermarket's future in telematics is that whole area of diagnostics," she said. 

"The whole area of diagnostics is not about our lack of technology to play in the telematics game," Schmatz said.  "In fact, quite the opposite is true.  Large companies like Continental and Delphi are certainly capable of working with vehicle architectures on a global basis.  Smaller companies like Smart Engineering Tools and MTS are fully focused on providing the kinds of flexibility the aftermarket will need to tune a telematics solution for our specific requirements. 

 
"But again, the main point is the access to all the information necessary to get that job done.  We would all like the OEMs to see the aftermarket as a full partner who is working to uphold the reputation of their brands."

Overall, intelligent transportation systems are about saving lives and saving fuel, Schmatz said.  The states and the federal government are actively working on telematics solutions to address these issues, she said.

"In many interviews for the telematics report, when we spoke with members of Congress, we saw a very pro-aftermarket sentiment from all the government agencies regarding intelligent transportation systems," she said.  "They believe the aftermarket can reach more vehicles in a shorter amount of time than the OEs can.  We should take advantage of that sentiment."

Schmatz presented several guidelines for the future vision of telematics.  "First, its clear that communication electronics and information technology are both moving at a pace that favors speed and dexterity of aftermarket players versus the longer lead time of the OEs and their development cycles," she said. "We can move an idea to cash flow a lot faster than any OE can."

Second, although not saying handheld devices will replace imbedded hardware, Schmatz said she does see the car as a potential docking station for portable devices.

The ability to convert vehicle system information into knowledge will be a key generator, she said.  And building it so that data is converted to action and applied for correction and maintenance will be fundamental. 

Fifth, she said communication protocols should be transparent;  the data size and frequency will decide which way to go, and communications providers will always be available.

Schmatz said that although the technical abilities of telematics will give OEs one more reason to encrypt and protect data because it is so tempting to silo the data and drive customers to their dealer organizations, she believes the data belongs to the vehicle owner.

"We think some OEs will see the light and actually open source their data to attract global programming opportunities and develop new applications from those programmers," she said, adding that partnerships will be key.

Finally, she said she sees "the humble cell phone" as taking on a potentially important role in being a transmitter of data from the vehicle to monitor or data base, or to your aftermarket outlet.

"This last statement trumps all others," Schmatz said.  "Without protection guaranteed with the right to repair, we can go from being telematics players to telematic victims pretty quickly."