Ignoring static, makers advance on telematics

Wireless partners
Automakers and their telematics partners Acura: OnStar Audi: OnStar BMW: ATX, Cross Country DaimlerChrysler: AT&T Wireless Mercedes-Benz: ATX Ford: Wingcast General Motors: OnStar Lexus: OnStar Lincoln: ATX, Motorola, Sprint PCS Subaru: OnStar

Despite industry and government concerns about driver distraction, automakers are forging ahead with telematics partnerships and plans.

The North American market for factory-installed telematics is expected to reach almost $7 billion in 2007, projects market research firm Frost & Sullivan of San Jose, Calif. That would be more than 18 times larger than last year's $380 million telematics market.

Factors contributing to the growth include more automakers offering telematics, improved telematics services and lower hardware and service prices.

"Lower prices will cause unit growth, which will grow the market," said Joerg Dittmer, an automotive industry analyst for Frost & Sullivan.

Ford Motor Co. is depending on Wingcast of San Diego, its joint venture with Qualcomm Inc., to develop its system. The system is expected to debut in the 2003 model year. The automaker also is launching a telematics system called Vehicle Communication System for its 2002 Lincoln sedans. Service provider ATX Technologies Inc. of Irving, Texas, Motorola and Sprint PCS helped Ford design the system.

DaimlerChrysler is working with AT&T Wireless to develop its telematics system and will announce additional partners this fall. Mercedes-Benz will continue to work with ATX to offer TeleAid.

BMW in August said it also will work with ATX. The automaker will continue to use Cross Country Automotive Services of Boston. The three companies will work together to offer emergency and concierge services as well as roadside assistance.

OnStar continues to increase its customer base beyond General Motors. Audi this fall will offer OnStar in its vehicles. Subaru will put OnStar in its six-cylinder 2003 Outback wagon and sedan scheduled to launch next year, and likely will add it to other models, said Subaru spokesman Tom Johnson.

The number of new vehicles sold with telematics systems will jump from an estimated 2 million this year to 12.4 million in 2007, said analyst Dittmer.

Despite the domestic and European automakers' push to bring telematics to the masses, Honda Motor Co. and Toyota Motor Corp. have made no announcements regarding Honda and Toyota brand vehicles in North America.

Both automakers have limited telematics offerings for their upscale brands. Honda offers OnStar on its Acura RL sedan; Toyota has OnStar for its Lexus LS 430 luxury sedan.

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