GM’s OnStar Plans Aggressive Defense Against Newcomers

Special Report

The Telematics Tide

OnStar’s aftermarket “For My Vehicle” rear-view mirror, a key element of its plan to hold off a growing field of telematics competitors, will launch several weeks later than anticipated.

But when it hits BestBuy electronics stores, the technology will be compatible with about 75 U.S.-market models – a number that will keep growing as new vehicles are validated.

OnStar’s “ForMyVehicle” costs about $399, plus subscription fees.

OnStar, the auto industry’s longtime dominant telematics system from General Motors, tells Ward's the FMV rollout comes in a few weeks, later than the spring timetable announced when the mirror was introduced at January’s Consumer Electronics Show. OnStar cites extra validation work for the delay.

The FMV unit is just one element in OnStar’s defense of its market share, which also includes expanding its existing infrastructure with new services, such as enhanced navigation.

Until recently, few other auto makers could offer the safety and security of OnStar. With the touch of a button, a driver can receive concierge service, from turn-by-turn directions to dinner reservations.

The service also provides peace of mind, because if a crash does occur an OnStar safety advisor instantly would notify emergency personnel.

For a dozen years, OnStar was a golden negotiating chip on GM’s showroom floor.

“OnStar is awesome on safety and security,” admits John Krafcik, president and CEO of Hyundai Motor America.

But soon the GM brand will have credible company as new telematics systems, such as Hyundai’s BlueLink, come to market.

OnStar’s greatest asset is its infrastructure, built up at GM over 15 years and giving it a lengthy and undeniable head start on newcomers leveraging systems from providers outside of their organizations.

FMV leverages that infrastructure. At about $399 installed, plus subscription fees, the mirror is compatible with vehicles back to model-year ’91 – some 90 million units.

There are a handful of cars it will not fit, OnStar says, because the foot of the mirror must mount to a windshield to accommodate its crash-notification hardware. Incompatibility occurs when mirrors and headliners are integrated.

A recent appearance on the popular television show “The Celebrity Apprentice” sent interest through the roof, OnStar says, with 10,000 people accessing the service’s online “vehicle selector” feature for make and model matching in a 24-hour period.

OnStar recently rolled out the ninth generation of its system, which in the U.S. consists of two plans – emergency diagnostics and security service for $199 annually and a premium package that offers those services plus unlimited navigation for $299 per year.

Interaction with drivers remains high, highlighted by 200 million cumulative subscriber interactions in its history, more than 100,000 crash-scene responses.

Every month, OnStar advisers deliver some 150,000 calls per day and provide about 2 million navigation routes.

Of the 6 million current subscribers, 4.3 million receive the service’s monthly vehicle-diagnostic reports. And the e-mails are opened at a 70% clip.

OnStar calls the diagnostic plans a “monthly customer-management tool,” providing GM owners with service alerts and other vehicle updates.

More features keep coming. For example, OnStar users now can send navigation from their computers or smartphones to their GM vehicles. And some 90,000 users have special smartphone applications that, for each GM division, leverage OnStar technology to allow remote vehicle-monitoring.

OnStar has recorded 2.7 million usage requests in less than a year.

OnStar also recently delivered a second test-vehicle to wireless provider Verizon. The two have paired up on 4G broadband service, opening the door to integrating cloud-computing with vehicle functions.

Among the possibilities: receiving on a smartphone an alert and a video of another motorist damaging an app-user’s GM vehicle in a parking lot.

The partnership could open up social-media use inside the vehicle, although many safety issues remain unresolved.

In addition, OnStar continues to help GM raise the quality of its cars by providing data-driven insight during validation. As one GM executive tells Ward’s recently, “I can’t tell you how many time its saved our (behinds).”

Also on tap is the prospect of combining driver habits with known traffic patterns to optimize drive routes. The result: fuel savings or, in the case of the Chevrolet Volt, energy conservation.

“We’re on the cusp of something really big here,” OnStar’s Nick Pudar, who heads business development, told a recent conference on the future of automotive connectivity. “It raises questions about privacy, but those are things that can be solved.

“This ubiquitous connectivity is going to change how we interact, and the exciting thing is there will be all kinds of new mash-ups that will occur in this space; the mash-up of data, energy and social interaction.”

At the same time, OnStar’s sticks with its foundational 24-hours-a-day, 365-day-a-week live advisor access at the touch of a button.

But with BlueLink, for instance, Hyundai will try a different approach. Users can skip talking to a live adviser and instead use voice commands to obtain the service they want. If the voice commands fail, a live adviser intervenes.

“This gives (customers) the best of both worlds and allows us to offer the service at a pretty good cost,” Krafcik recently told Ward’s.

BlueLink has not been priced and rolls out on the ’12 Sonata, Hyundai’s volume vehicle. It will include infotainment options similar to Ford’s Sync system.

“It really merges the best of both those systems and puts it together in an appetizing package,” Krafcik says.

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