Vehicle manufacturers in Europe need to change their approach to eCall to make the most of the forthcoming legislative change which will see it fitted to all new models, says consultants Frost & Sullivan.
According to the European Parliament, all newly-approved car and light van models will have to be equipped with eCall boxes - emergency call devices enabling rescue services to respond with faster road assistance based on knowledge of the exact location of the accident - as standard fitment from March 31, 2018.
The European Commission has stated that the installation of these devices will increase the cost of the vehicle by around £73 (€100), but it has to be available free of cost for users. It remains to be seen whether European OEMs will be able to incur this cost and profit.
Frost & Sullivan said it is inevitable that eCall will be integrated with multiple services, such as diagnostics and effective vehicle relationship management, on a single telematics platform in a vehicle, but this can be rolled out only by offering connected services that will continue to operate on a subscription basis after the initial free period.
“OEMs will have to understand the potential revenue in installing such devices across vehicle lines,” said Niranjan Manohar, automotive and transportation programme manager at Frost & Sullivan.
“Using a subscription-based business model will take harnessing vehicle data into the next generation of advanced services and tap into revenue potential of approximately €12 billion.
"This will enable OEMs to lengthen customer relationships to more than three years and tap into the potential of long-term maintenance and service business opportunities post vehicle sales.”
Even though safety is the most important driver for new vehicle purchases in Europe and the United States, the question of whether pre- or post-crash assistance is necessary remains an issue, said Frost & Sullivan.
While consumers would like the implementation to come as a standard, adding to the overall perception of vehicle safety, the willingness to pay for it remains low.
As OEMs are most likely to bear the costs for implementing eCall in vehicles, they will focus on specific benefits and features that can secure some profit.
Assessing possible opportunities within telematics ecosystems, service opportunities, and service value will be one of the ways forward. Cooperation among stakeholders could be another key to success for the integration of eCall.
While extremely popular in the US, the concept of subscription is not a favourable in Europe, said Frost & Sullivan.
Most OEMs with branded telematics services seek to profit by comparing subscription revenues to long-term customer retention opportunities as a result of the free trial period. European OEMs are not enthusiastic about the success of this model.
“It is essential however, that European OEMs modify their perspectives about eCall, as it will soon be a standard feature of vehicles,” said Manohar.
“Making eCall available as a key feature of a larger telematics service for instance, that focuses on customer relationship management (CRM) services and prognostics (such as GM’s OnStar) is a possible solution for OEMs to adopt eCall.
"BMW is already offering free assistance and telematics services (diagnostics) for 10 years with every vehicle purchased in the United States.”
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