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MAD niche market at risk?

Connected aftermarket relies on OBDII port
Friday, July 8, 2016 - 07:00
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I recently attended the CAWA (California Automotive Wholesalers’ Association) Leadership Meeting in Long Beach and presented on “The Connected Aftermarket: Why Wait on the Connected Car?” The major takeaway was to ensure your company is proactively pursuing how to adopt emerging connected technologies that are already penetrating the aftermarket industry and avoid waiting on connected cars to roll off the assembly line.

The connected aftermarket includes technologies that connect vehicles with motorists with repair facilities with the aftermarket supply chain. It is consumer-driven and technology enabled.

Categories of technologies and applications include the collection of vehicle data through the OBDII port with some type of device – typically called a dongle:

  • communicating that information to a server in the cloud and back to the motorist’s smart device
  • presenting vehicle information in an understandable format
  • enabling motorists to select from a network of repair facilities
  • pushing service information from a shop to customers’ smart devices and the use of smart phones to facilitate traditional supply chain transactions.

Many of the technology developers are building networks of either consumers and/or repair shops to assemble enough critical mass for the model to work financially for the developers and to provide sufficient value to users. This requires a lot of time, and in many cases first-to-market wins; therefore, there is a race to integrate as many motorists and shops into networks as possible before loyalties develop for a competitor.

I call this the MAD niche for two reasons. First, the dash to critical mass reminds me of the 1963 movie “It’s a Mad, Mad, Mad, Mad World,” in which a diverse cast of characters race to find a stash of stolen cash. Second, the basis for many of the models and connectivity are mobile apps and dongles, or MAD.

MAD should not connate a negative impact to the aftermarket. There are many benefits to telematics and MAD solutions, including opportunities to reach motorists more cost-effectively than ever, development of customer stickiness by repair shops, enhanced information provided by customers to shops regarding troubles with their vehicles, prospects of increased streamlining of aftermarket supply chains and remote diagnostics. I have heard several shop owners state that their customers are now more educated about what’s going on inside the vehicle than the shops– at least when they bring the car in to the shop.

However, there are some MAD challenges. The attempt to garner a critical mass of shops across the country is no easy task. There are dozens of providers competing for shops to join their respective networks and to provide dongles to the motoring public. We all are accustomed to locating every site on the Web because of indexing, crawling and spidering techniques employed by our favorite search engines. Depending on the mobile app a consumer selects, he or she may or may not be accessing all the possible shops in a select region.

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