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Automotive Telematics on the Start of Explosive Growth Cycle: New Study

September 7, 2001

According to a new study published by Telematics Research Group, automotive telematics is in the infancy stage and is on the start of an explosive growth cycle.While only 5 percent of new autos sold are telematics-enabled today, by 2006 one of every three new autos sold -- 33 percent -- will have telematics, according to the study.More importantly, over the next five years, the installed base of telematics-enabled autos in the U.S. will reach nearly 21 million for an impressive compound annual growth rate of 63 percent. “Telematics is an emerging industry at the same stage the PC industry was in back in 1980,” said Dr. Egil Juliussen, principal analyst with Telematics Research Group. “During the 1980s, the number of PCs-in-use per 1,000 people exploded from 6 PCs to just over 200 PCs per 1,000 people. From 2000 to 2010, the number of telematics-enabled autos-in-use are projected to grow from 4 per 1,000 people to nearly 200 telematics vehicles per 1,000 people.”Eventually all cars and light trucks will have some level of embedded telematics, according to Dr. Juliussen, because the benefits to both the consumer and the auto manufacturers are so compelling. To the consumer, the safety and security aspects of telematics will eventually make telematics a requirement, much like anti-lock brakes are today.To the auto manufacturer, the benefits of embedded telematics are widespread and may be enough to justify the cost based on operational cost avoidance alone, according to the study. For example, the collection and analysis of remote diagnostics on large numbers of autos can identify reliability problems and this has the potential to lower warranty and recall costs. Furthermore, remote diagnostics is also likely to supply valuable data that can provide information for future design enhancements.But telematics goes well beyond safety, security and remote diagnostics, according to the study. Embedded telematics provides a platform for subscription-based content services -- thus potentially opening a lucrative new revenue stream for car manufacturers. By 2005 these services will begin to exceed revenues from equipment, as telematics will serve as a delivery platform for everything from news, weather and traffic information, to e-mail, instant messaging and voice services, according to the study.About Telematics Research GroupTelematics Research Group tracks, analyzes, and forecasts the market for automotive telematics.For more information visit, or contact Phil Magney at (952) 935-0400.
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