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Extended vehicle: A deal on telematics that is too good to be true?

Thursday, October 19, 2017 - 07:00
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In the Christmas classic, It’s a Wonderful Life, there is a scene that appears to be set on Black Tuesday, at the onset of the Great Depression, where George Bailey who was just about to go on his honeymoon is overwhelmed with the demands of panicked depositors due to the closing of the bank. Seeing the panic at the Bailey’s building and loan, Mr. Potter, the wealthiest man in town, offers to buy out Bailey’s depositors at 50 cents on the dollar.

Bailey points out that, while this might bail out many of his depositors, it would ultimately put the building and loan, the only competitor to Potter’s bank, under his control, thus reducing competition in the fictional town of Bedford Falls. I bring this story up not because the holidays are just around the corner, but because it is almost exactly analogous (absent Donna Reed) to the situation that the independent auto care industry is facing with access to embedded telematics systems. 

As many readers are aware, the advent of telematics will provide the ability for vehicles to wirelessly transmit an enormous amount of data, including diagnostic and location information. While this could provide huge benefits to the auto care industry by enabling companies to more efficiently and effectively provide services to their customers, there is one major problem: all the vehicle data is transmitted solely to the vehicle manufacturers.

Not only is this a missed opportunity for the auto care industry, but this monopoly on car owners’ data could create a major impediment for technicians attempting to repair vehicles. In the not-too-distant future, cybersecurity concerns likely will cause car companies to limit the data available through the on-board diagnostic (OBD) port to only emissions related information. Further, it is possible that someday the OBD port might disappear entirely, meaning that all the diagnostic data that technicians currently obtain through the OBD port will only be available through the telematics system. 

Of course, the car companies have a solution to the aftermarket’s concerns: they will make the data available from their servers. Known as the extended vehicle concept, independent shops will simply log into the car company server, pay a fee and obtain the codes they need to repair a vehicle. So, like Mr. Potter, the car companies have come forward with a solution aimed at bailing us out. However, before we celebrate, we might want to take a step back like George Bailey and think about the consequences. 

Never before in the history of the aftermarket has the industry been dependent on the vehicle manufacturer to obtain the diagnostic information they need to repair a vehicle. While the Clean Air Act required that all vehicles be equipped with on-board diagnostic systems to monitor a vehicle’s emissions related systems, Congress acted to ensure competition in the repair industry by mandating that the OBD port be standardized such that anybody could access the port without the need for a proprietary device. 

Unfortunately, what is unfolding in the telematics area through the extended vehicle concept could threaten competition by forcing shops to obtain all their diagnostic data from the car company. Thus, the manufacturer would make the decision as to the cost and level of access to the data needed to diagnose and repair their vehicles. 

Think about how the extended vehicle might impact the entire supply chain: Would a shop that purchases more replacement components from a particular vehicle manufacturer obtain access to a higher level of information than another shop that might purchase parts from an independent source? How would the costs for access be set? Further, what intelligence would the car company be able to gather based on the data requests from an independent?

In sum, the offer from the vehicle manufactures for an extended vehicle concept is similar to the offer from Mr. Potter in It’s a Wonderful Life. Yes, it would solve the problem short term; but in the long term, it would lead to the end of the independent aftermarket, and likely mean that the manufacturers and not car owners will be selecting the winners and losers in our industry.

I think we all know that George Bailey would say no to this deal and I hope the industry will say no as well. Independents and consumers should demand that car companies provide consumers not only with ownership of their data, but the ability to control access directly from their vehicle. 

Of course, there are a host of technical and cybersecurity issues that must be addressed for independents to obtain direct access into embedded telematics systems. However, the Auto Care Association and others in the industry are working on solutions that could not only benefit competition, but also provide a higher level of security for critical vehicle systems. Look for more on this in my next column.

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