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OEMs Use Telematics to Gain Repeat Customers

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July 31, 2013—According to a report issued by Frost & Sullivan, telematics such as OnStar and Bluelink are becoming standard features in order to strengthen communication between customers, dealers and original equipment manufacturers (OEMs).

"Vehicle manufacturers are waking up to the advantages of signing up users for a connected service for three or more years than having them pay a monthly subscription of $15 or $20 for a year," said Praveen Chandrasekar, telematics and infotainment research manager at Frost & Sullivan. "Manufacturers are increasingly offering these services as a standard feature in their models and are tying their costs into the overall vehicle costs to lower upfront costs."

Of all OEMs, the most aggressive in this area is Hyundai with its Bluelink program, followed closely by GM with OnStar and its planned long-term evolution (LTE) solution.

Toyota, Kia, and BMW also have active telematics systems with Toyota creating the first-of-a-kind social network for open dialogue between customers, dealers and OEMs. BMW has offered its Assist program at no charge for the first 10 years. Kia has created a smartphone-app-based service at no extra cost to customers.

North American OEMs are using the resurgence of telematics to offer services that provide a seamless vehicle ownership experience for customers and strengthen their own aftermarket relationships.

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