The Russian Automotive Market, although pegged for significant growth in coming years, is suffering like the rest of the global industry: Vehicle sales have fallen by half, unemployment is up to 10% and credit for vehicle purchases is scarce.
But Dan Vigdor sees a glimmer of hope that the emerging telematics market in Russia will continue to thrive, even in this harsh climate.
“Russians are resilient and so is the Russian market,” says Vigdor, CEO of AutoLocator Co., Russia's largest telematics supplier of satellite-based emergency roadside services, similar to General Motors Co.'s OnStar.
AutoLocator has just launched its service as part of Volvo Car's On Call system, available in 14 countries. AutoLocator provides the services only for the Russian market.
Vigdor makes a compelling case for telematics in Russia. With first-time drivers flooding the roads, fatal accidents have skyrocketed to 35,000 annually.
The tally may not seem high for such a large country, but Western Europe has the same number of fatals — and 10 times the number of vehicles (300 million vs. 30 million in Russia), Vigdor says.
“It's become a national priority in Russia to save lives, and there are government initiatives,” he says. For example, authorities are attempting to reduce the average response time for ambulances in Russia from more than two hours currently.
Another significant AutoLocator service is tracking stolen vehicles. In 2008, Russia's market for stolen vehicle recovery consisted of 820,000 vehicles. Auto theft is a huge problem in Russia, Vigdor says.
“After gun running and drugs, (auto theft) is the third biggest criminal business in Russia,” he says.
“It's not like in England, where a guy takes a car for a joyride. It's a real business.”
AutoLocator's anti-theft system consists of a unique 2-way anti-jamming wireless radio network that acts as a backup to traditional GPS. Call-center operators can remotely disable a stolen car's engine or turn on the alarm system. The company also works closely with local law enforcement investigating thefts.
Stolen-vehicle recovery has been the biggest component of AutoLocator's business since starting up 12 years ago. With few competitors and a well-heeled customer base, AutoLocator was charging four or five times the cost of similar anti-theft services in Western Europe.
But prices are coming down as a bigger pool of consumers seeks less-expensive alternatives.
AutoLocator used to charge $67 a month for stolen-vehicle recovery, alone. Now the company charges $25 a month for the same service, plus “E-call” (emergency services for airbag deployment), “B-call” (roadside assistance), Internet access, traffic information and service diagnostics.
Like OnStar, AutoLocator provides factory-fitted telematics units for new vehicles and also sells equipment on the aftermarket to vehicle dealers and fleet-management companies that want to monitor the performance of their drivers.
Vigdor says some 10,000 fleet vehicles are on the road using AutoLocator tracking services. The company employs 350 people at its call center and headquarters in Moscow and in three other locations.
In the meantime, Vigdor says he will continue seeking OEM partners to provide AutoLocator services in a market he hopes will recover. Vehicle sales in Russia rose to 3.2 million units in 2008 but are on pace to fall by half in 2009.
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