Ask toyota motor corp. about Gazoo, its e-retailing operation that goes well beyond autos, and the boasting begins: Gazoo has 480,000 members, is adding 2,000 a month and is aiming at 4 million.
But ask Toyota about its Monet in-car telematics business, and the response is an embarrassed silence. Sorry, no figures are available on the number of subscribers. So far, telematics in Japan is a flop. 'We are outside our area of expertise,' admits Toyota Managing Director Masanao Motonami.
Japanese carmakers haven't given up, though. Toyota, Nissan Motor Co. and Honda Motor Co. each has launched a telematics service, complete with real-time news and weather updates, plus information on everything from concerts to restaurants. Japanese consumers say they want much of that information. The telematics services, though, have run into the same problem that plagued early Internet ventures: Consumers want the information, but they don't want to pay for it.
Part of the problem is that some information that consumers want already is available. Most cars in Japan are available with optional navigation services. For a slightly higher purchase price, consumers can get a navigation system that offers real-time traffic updates without a monthly fee.
That leaves the fee-based services scrambling for other goodies to offer. An example is Inter-Navi, the service sold by Honda. Inter-Navi's most popular feature lets members plan a trip from their home computers and store the route in Inter-Navi's server. This lets customers either print it out at their home computers, or call it up later by cell phone from the car.
Honda has snared 27,000 Inter-Navi members, well beyond the 10,000 that it targeted when it launched the service two years ago. However, only 4,000 have paid the initiation fee of 2,500, or $24, to become 'mobile' members who can call up Inter-Navi from their cars. The rest are 'Web' members who only can use the service at their computers, and who pay no initiation fee. Honda originally charged a yearly fee of $57 as well but waived it to attract more customers.
Toyota's Monet, for 'mobile network,' had even grander ambitions. Toyota initially aimed for 100,000 subscribers by April 1999. Each subscriber pays a $24 initiation fee, plus $57 a year. According to an article in the Nikkan Kogyo newspaper, Monet had attracted fewer than 5,000 members by then.
Likewise, Nissan's CompassLink service aimed for 100,000 subscribers but had barely 2,000 by last September, Nikkan Kogyo reported. Neither Toyota nor Nissan would confirm the Nikkan Kogyo figures. Nissan added a cheaper 'holiday plan' in late 1999 to woo members. Whereas the base subscription fee was $24 a month, the holiday plan allowed members to use the service only on weekends and holidays for half that price, plus about $2 per use.
CompassLink's most attractive feature has been the 24-hour availability of customer service representatives who can answer questions, but that also has pushed up the service's operating costs.
Japanese carmakers are not ready to give up on telematics, however. Mazda Motor Corp. plans to launch an Internet telematics service this summer. Former Mazda President James Miller had ordered his staff to find a way to offer the service for free. Mazda President Mark Fields will not comment.
Meanwhile, Toyota plans to expand Monet to include Internet links and thus online shopping and ticketing. Toyota's Motonami blames the public's resistance to Monet on slow baud speeds, which limit Web capabilities, plus costly equipment. Both, he adds, will improve. In addition, 'The functionality is not as personalized as it could be,' he says.
Monet's most widely used features are its traffic information plus news and weather updates. Toyota has installed video cameras atop street poles at key intersections in major cities, allowing Monet users to call up a live image of traffic in those locations. In addition, sumo fans who are gridlocked in traffic often log on from their cars to get the sumo results shortly after the tournaments end at 6 p.m.
Those hardly are the sort of telematics selling points that will lead buyers to sign up in great numbers. Still, Motonami is insistent. 'It is inevitable that this technology will proliferate,' he says. 'Toyota will never give up on this technology.'
You can e-mail Staff Reporter ' James B. Treece at [email protected]