OnStar offers safety, security and concierge services to subscribers, such as emergency medical response via airbag notification, route assistance, remote engine-diagnostic checks, ticket brokering and dinner reservations.
“OnStar is really doing very well for us,” GM Chairman and CEO Rick Wagoner says, following the debut of the Pontiac G6 midsize sports sedan here at the North American International Auto Show.
“(Subscriber) renewal rates are very solid – above 50%,” he says. “The business aspects are running well. We continue to bring out new features. We continue to get smarter on how to use OnStar to our customers’ advantage. It’s a very important aspect to us, attracting and maintaining customers. We’re very upbeat about it.”
OnStar struggled following its launch in the fall of 1996. Consumers were unsure of how to operate the system, which is activated by pushing a button – usually located on an overhead console. Consequently, many drivers rarely used the system and opted not to renew their subscription.
When other auto makers began abandoning their ventures, includingMotor Co.’s Wingcast, it was expected GM would do the same. Instead, GM has stepped up its support of OnStar.
New services have been introduced, including the GM Goodwrench remote vehicle-diagnostics check and Personal Calling, which allows subscribers to access personalized information via hands-free voice-activated technology.
GM also began offering OnStar to competitors. In addition to more than 50 GM models, Acura, Audi,, Lexus and vehicles offer OnStar. Most recently, OnStar ads increasingly are appearing on television and radio. “We’re putting more muscle behind it,” says Wagoner.
“Honestly, what’s happening is that we are still dealing with a lot of people who cannot understand that this kind of feature is available in a car,” he says.
“You talk about the number of times the system has kicked in when someone has been in an accident, the number of emergency calls, how many stolen vehicles a month are tracked down. These kinds of features are of real value. And using those real-life experiences (in commercials) has been a great way to call attention to those capabilities.”
OnStar claims about 2.5 million subscribers. And in second-half 2002, GM Chief Operating Officer John Devine revealed that OnStar posted a profit for the first time. GM declines to formally report financial results for OnStar, a wholly owned subsidiary.
Wagoner says future growth likely will come from within GM and OnStar’s other current customers. “At this point, we are primarily working with the manufacturers that already have it,” Wagoner says. “Certainly, from time to time, others express interest in it. But nothing to announce today on that.”
There also are plans to further expand OnStar’s services, Wagoner reveals. However, there are no plans to spin off OnStar. “No plans to do that, says Wagoner. “I don’t see why we’d do that right now.”