TechnoMetrica: Auto Safety, Entertainment Behind Telematics Appeal

March 21, 2005

The appeal of automobiles equipped with telematics is high enough to generate more than $700 million in sales over the next two quarters, if auto manufacturers are nimble enough to capitalize on growing consumer awareness and demand, according to TechnoMetrica Market Intelligence.

The research firm released a study, "Automotive Telematics Systems & Industry Trends," that gauged the appeal of telematics.

Among the findings are that the three most-desired telematics systems among likely car buyers are:

• Emergency services - 34%
• Built-in navigation systems - 31%
• Satellite-based entertainment services - 14%

According to Susheel Philip, TechnoMetrica's lead auto analyst, General Motors is putting pressure on the competition by offering a range of models aimed at different people. "When you get OnStar in each of those models, the competitors will be forced to catch up," said Philip.

The inevitable outcome of this, according to Technometrica, is an expanding pool of potential telematics customers. GM announced in January that it plans to offer OnStar as a standard feature for U.S. and Canadian retail customers, covering all segments and prices (excluding some commercial models), beginning in 2007. GM reports over 3 million OnStar subscribers.

To illustrate the usage of its OnStar service, GM published the following stats on its Web site, based on a 3-month rolling average.

For its study, TechnoMetrica surveyed nearly 5,000 Americans, focusing on approximately 1,000 likely to buy an automobile within six months.

Sources: TechnoMetrica Market Intelligence, General Motors.