Automotive News - July 21, 2008 - (Page 20D) 20D • JULY 21, 2008 INFORMATION TECHNOLOGY Subscribers, sponsors may fund telematics services Tim Moran autonews@crain.com Who will pay for the brave new world of connected services? Some telematics leaders and analysts favor advertising, thinking sponsors will fund content. But most expect some form of subscriber business model similar to that used by cable TV or Internet providers. Consumers may pay upfront as part of the price of the vehicle, as is the case at BMW. They may pay for a set period — months or years — as they do for General Motors’ OnStar service. Or they may pay multiple subscriptions for different services. “There may be media services, like downloading audio books or downloading music or ring tones, that can be transactional. There may be prepaid services,” says Kevin Link, vice president of Hughes Telematics, which is entering the market as a service provider for Chrysler and Mercedes vehicles in North America. “We’re trying to remain flexible.” Hughes aims to equip all of a manufacturer’s vehicles with connectivity boxes, thus building a critical mass of potential service consumers. Yet Hughes is aware that the subscription business model has limits. “We’re very conscious of something we call subscription stacking,” Link says. “There is a tolerance for only a certain amount of disposable income you’re going to allocate” as a consumer for all services. How much does it cost? Clear Channel provides real-time traffic data to BMW owners, among others. Jeff Littlejohn, Clear Channel’s executive vice president, thinks consumers are happier with one upfront charge when the vehicle is purchased. “The consumer doesn’t see that it’s $100 more,” he says. “In my mind, it’s the only model for automotive, because most people don’t want to be hit with a monthly subscription fee.” J.D. Power and Associates has found that consumers are interested in con- nectivity but are sensitive to price. In the 2008 U.S. Automotive Emerging Technologies Study, navigation systems, personal assistance safety services, remote vehicle diagnostics, wireless connectivity and in-vehicle Internet all scored above 54 percent in initial interest level. But interest flagged when prices were revealed. Take in-vehicle Internet: At $30 a month, it dropped to the 19th most popular feature out of 20. Wary consumers Mike Marshall, J.D. Power study director, says consumers are willing to pay for individual features. But when they realize how features link together and what data may flow back to automakers or others, they become wary. Consumers think, “ ‘Hey, they can use these data,’ ” Marshall says. “Eventually, they get a pretty good list of what the OEM is using this for. And then they begin to say, ‘Hey, shouldn’t I get a discount?’ ” Tony DiSalle, OnStar marketing vice president, says customer education is key. “We have yet to see consumers who understand what we have reject it,” he says. Consumers do reject advertising, DiSalle says. “We have yet to see anything compelling in research that would indicate that would be anything but intrusive.”c How it works Transcending Turbulence BRIEFING SEMINARS The merging of automotive leaders and ideas. This year’s seminars include: t Automotive—Transcending Turbulence: A New Beginning? t The Future of Automotive Leadership t Manufacturing for Fuel Economy t The Manufacturing Enterprise: Advanced Manufacturing and Supply Chain Strategies MANAGEMENT Highlights of Pay As You Drive insurance Policyholder waives privacy rights and agrees to have a black box with global positioning system technology mounted on the vehicle. Black box is activated as soon as the vehicle moves. It relays information on position, speed and time via satellite to a data center. Policyholder is billed at different per-mile rates depending on when and where the car is driven. If the car is driven at night or in congested city traffic during rush hour, the discounted rate rises. Annual standing charge covers administration and nondrivingrelated risks, such as theft, vandalism and fire. August 11–15, 2008 Traverse City, Michigan, USA The key to future success in the automotive industry lies in understanding the industry’s tumultuous state and moving forward. This annual meeting of automotive leaders and ideas will offer broad and in-depth views of future strategy, leadership, technological advances, private equity and global manufacturing. Don’t miss the industry’s most influential and informative management conference! t Profitable Personalization: OEM-Aftermarket Collaboration t Innovate, Collaborate and Thrive t Advanced Powertrain Forum t Money Talks: A Supplier’s Guide to Thriving in the Automotive Industry’s New Financial Landscape t Connected Vehicles in a Changing World t Energy, Efficiency and Climate: What Role for Auto? t Navigating the Global Manufacturing Maze An Evening with The Capitol Steps: Wednesday, 8–9 p.m. Known for “putting the mock in democracy,” the Capitol Steps will perform their special brand of satirical humor using song parodies and skits based on the headlines of the day. PREMIUMS Insurer: ‘We were ahead of our time’ continued from Page 20A Speakers Include: Maxwell says it is too soon to say whether DriveTime’s results, after adding night-driving fees, will match those of Norwich Union’s Pay As You Drive program. Pay As You Drive produced a 30 percent drop in claims and a 27 percent reduction in premiums, Nelson says. Pleased with response “We’re pleased at the positive response from young drivers,” Maxwell says. But he, like his counterpart at Norwich Union, complains about the cost of funding the onboard technology. Both would like to see carmakers pick up part of the tab. More Th>n has 800,000 conventional motor policyholders. So the 1,500 who have signed up for DriveTime make the program seem more like a cautious test than a major initiative. Norwich Union, which initially had hoped to draw 100,000 customers into its program, declined to say how many had signed up. “We were ahead of our time — and we’re waiting for the market to catch up,” Norwich Union’s Nelson says. “It has been a success, despite the poor take-up, and we’re not selling it or scrapping it. It’s only on hold.” c Mark Fields Executive Vice President, Ford Motor Company, and President, The Americas Tom LaSorda Vice Chairman and President, Chrysler LLC Beth Lowery Vice President, Environment, Energy and Safety Policy, General Motors Corporation Bob Carter Group Vice President and General Manager, Toyota Division, Toyota Motor Sales, USA, Inc. Register Now! mbs.cargroup.org 734.662.1287 or 866.374.6227 Mary Ann Wright Chief Executive Officer, Johnson Controls-Saft and Vice President and General Manager, Hybrid Systems Group, Johnson Controls Inc Peter Marks Chairman, President and CEO, Robert Bosch LLC Richard Colliver Executive Vice President, American Honda Motor Co. Phil Martens Current President, Light Vehicle Systems, ArvinMeritor; and President and CEO Designate Arvin Innovation. Sponsored by: For a complete list of speakers, visit: mbs.cargroup.org http://mbs.cargroup.org http://mbs.cargroup.org
Table of Contents Feed for the Digital Edition of Automotive News - July 21, 2008 Automotive News - July 21, 2008 Gray sky, not blue; store values wilt Sour Chery: Bricklin suit claims corruption Germans in U.S. eye VW work S.C. warranty insurer faces shutdown LaNeve: Make do with less marketing money Tesla CAFE: 244 mpg Lincoln's big crossover Schaeffler goes shopping: Can supplier land Continental? Dealers cut, shift their ad spending Truck for the times? Oklahoma pickup gets 37 mpg For Chrysler sensations, glory days are gone Kuzak: Redone Fords must have best fuel economy The Fisher brothers: Quite a body of work Kazamai concept: Mazda's design heard round the world 3 years later, Mitsubishi, UAW resume contract talks Big-pickup production will plunge Nason's NHTSA: More rules, fewer penalties A vote for the Volt Hyundai: Genesis gives brand a new beginning in luxury GM may survive; to thrive, it needs hot products GM just bought some time Green can be cool; it's up to the maker Why don't we drive diesels in the U.S.? Hooray! Joint effort stops airbag deaths All-Stars: Look beyond top brass Leno was right about U.S. cars Toyota recalls Siennas, disputes safety issue This time, the industry embraces connectivity Telematics connects with consumers Telematics gets no respect — the word, that is Tapping mapping for an extra eye on the road Drivers can check CO2 'tire print' Pay As You Drive insurance tracks cars to trim costs Subscribers, sponsors may fund telematics services Big-truck sales fall 14% in June Continental plant to make brakes Lear to shut Mo. seating plant Modine shifts production to Ky. Linamar buys Visteon plant Picture this Lexus revamps 'Taste' marketing extravaganzas Suzuki hires new auto ad agency Fisker turns to Finnish firm to make first hybrids American Suzuki gets new president Canada sales slip 5.6% in June Dealers A big fuel saver: Easy-rolling tires (but watch braking) MPG now! Automakers race to boost efficiency Products — not entire brands — likely to be ditched Pared ad budget is back on the chopping block GM goal: Big small-car profits Congress mulls arbitration bill 2009 Mazda6 price: $19,220 Copart files antitrust suit Denton's out, Leuliette's in as Dura CEO June output falls 13.8% Dodge Challenger: Not quite a sellout Magazine is raided in Renault espionage case Ya gotta believe: Dealers buy GM stock States of the auto industry Will the big guns pull the trigger? Lear a year later: Icahn's offer in hindsight Midcourse correction in Toyota's global sales outlook Chattanooga: A good site better Automotive News - July 21, 2008 Automotive News - July 21, 2008 - (Page Intro) Automotive News - July 21, 2008 - Gray sky, not blue; store values wilt (Page 1) Automotive News - July 21, 2008 - Gray sky, not blue; store values wilt (Page 2) Automotive News - July 21, 2008 - Lincoln's big crossover (Page 3) Automotive News - July 21, 2008 - Truck for the times? Oklahoma pickup gets 37 mpg (Page 4) Automotive News - July 21, 2008 - Truck for the times? Oklahoma pickup gets 37 mpg (Page 5) Automotive News - July 21, 2008 - 3 years later, Mitsubishi, UAW resume contract talks (Page 6) Automotive News - July 21, 2008 - 3 years later, Mitsubishi, UAW resume contract talks (Page 7) Automotive News - July 21, 2008 - A vote for the Volt (Page 8) Automotive News - July 21, 2008 - A vote for the Volt (Page 9) Automotive News - July 21, 2008 - Hyundai: Genesis gives brand a new beginning in luxury (Page 10) Automotive News - July 21, 2008 - Hyundai: Genesis gives brand a new beginning in luxury (Page 11) Automotive News - July 21, 2008 - Why don't we drive diesels in the U.S.? (Page 12) Automotive News - July 21, 2008 - Why don't we drive diesels in the U.S.? (Page 13) Automotive News - July 21, 2008 - Leno was right about U.S. cars (Page 14) Automotive News - July 21, 2008 - Leno was right about U.S. cars (Page 15) Automotive News - July 21, 2008 - Toyota recalls Siennas, disputes safety issue (Page 16) Automotive News - July 21, 2008 - Toyota recalls Siennas, disputes safety issue (Page GM1) Automotive News - July 21, 2008 - Toyota recalls Siennas, disputes safety issue (Page GM2) Automotive News - July 21, 2008 - Telematics connects with consumers (Page 17) Automotive News - July 21, 2008 - Telematics connects with consumers (Page 18) Automotive News - July 21, 2008 - Telematics gets no respect — the word, that is (Page 19) Automotive News - July 21, 2008 - Tapping mapping for an extra eye on the road (Page 20) Automotive News - July 21, 2008 - Pay As You Drive insurance tracks cars to trim costs (Page 20A) Automotive News - July 21, 2008 - Pay As You Drive insurance tracks cars to trim costs (Page 20B) Automotive News - July 21, 2008 - Pay As You Drive insurance tracks cars to trim costs (Page 20C) Automotive News - July 21, 2008 - Subscribers, sponsors may fund telematics services (Page 20D) Automotive News - July 21, 2008 - Subscribers, sponsors may fund telematics services (Page 21) Automotive News - July 21, 2008 - Linamar buys Visteon plant (Page 22) Automotive News - July 21, 2008 - Picture this (Page 23) Automotive News - July 21, 2008 - Fisker turns to Finnish firm to make first hybrids (Page 24) Automotive News - July 21, 2008 - Canada sales slip 5.6% in June (Page 25) Automotive News - July 21, 2008 - Canada sales slip 5.6% in June (Page 26) Automotive News - July 21, 2008 - Canada sales slip 5.6% in June (Page 27) Automotive News - July 21, 2008 - Canada sales slip 5.6% in June (Page 28) Automotive News - July 21, 2008 - Canada sales slip 5.6% in June (Page 29) Automotive News - July 21, 2008 - Canada sales slip 5.6% in June (Page 30) Automotive News - July 21, 2008 - Canada sales slip 5.6% in June (Page 31) Automotive News - July 21, 2008 - Dealers (Page 32) Automotive News - July 21, 2008 - MPG now! Automakers race to boost efficiency (Page 33) Automotive News - July 21, 2008 - GM goal: Big small-car profits (Page 34) Automotive News - July 21, 2008 - Denton's out, Leuliette's in as Dura CEO (Page 35) Automotive News - July 21, 2008 - Denton's out, Leuliette's in as Dura CEO (Page 36) Automotive News - July 21, 2008 - June output falls 13.8% (Page 37) Automotive News - July 21, 2008 - Chattanooga: A good site better (Page 38) Automotive News - July 21, 2008 - Chattanooga: A good site better (Page 39) Automotive News - July 21, 2008 - Chattanooga: A good site better (Page 40)
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