Telematics Mileage Data
Can telematics be used to stop the clockers?
(Extract of presentation made to motor sales personnel February 2003)
I'd like to tell you a little about a new concept that is likely to be deployed in the near future. Can telematics be used to stop the clockers? Clocking, the habit of turning back the mileage of cars, is a trick that is used by the unscrupulous to artificially inflate the value of cars. But if the dealers of Britain are to be able to maintain their argument that high residuals are an integral part of their explanation for high showroom prices for new product, it is essential to have a level playing field. The buyer of a second-hand Jaguar, Vectra or whatever needs to be assured that the mileage shown on the car's instrument panel is genuine.
Although it has yet to start registering on the radar, with only the tiniest micro-percentage of the world's vehicle parc being equipped with location-sensing packages, one day every new vehicle will be thus equipped, straight from the factory. This is sufficient an incentive for several major service companies within the auto industry - on both sides of the Atlantic - to begin taking a keen interest.
According to a conversation I had recently with somebody from the research department of one of the world's leading vehicle authentication companies - San Francisco-based Experian - telematics technology is perceived as a key weapon in their future armoury. So far as my chap sees the situation unfolding, the ability of a vehicle to remotely provide details of its overall mileage - to keep a floor beneath residual values - could be used to verify the distance that it has covered.
For those of you who are unaware of telematics - what it is and what it does - I'll take a few seconds to explain. In its most basic current form, a car or truck's telematics package - its black box - uses the constantly-fired string of time signals from three or more satellites to provide a fix of the vehicle's location. That information can then be processed, and passed back via an in-built mobile telephone to a control centre. The positioning data can be constantly updated, at no cost to the vehicle operator, and stored on a microprocessor inside the black box. Most systems also have a connection from the speedometer into the black box, and between that and the satellite fixes it is possible to get an accurate picture of the distances that the vehicle has covered. Every so often - and the frequency can be programmed to suit the vehicle operator - that stored data is fired back to the control centre, from where it can be processed. But I'm getting a little ahead of myself.
At present, mileage checks are reliant on dealerships telling whichever data logging company they subscribe to the mileage covered by outgoing stock. This involves physically checking each vehicle, and then passing the details on. But the system is corruptible. Firstly even the most sophisticated electronic odometers can be hacked; this is simply a more sophisticated variation on the old process of taking apart the mechanical roller mechanism, or hitching an electric drill up to the speedometer drive cable and leaving it running until the desired reading has been reached. Secondly, a salesman keen to maintain the optimum vehicle value can pass on a falsified reading; this happens when old stock is about to be 'lost' by off-forecourt theft. And that happens more often than many people realise.
By using data transmitted directly from the vehicle, the likelihood of false readings is much reduced - which is good news for everybody but the bent salesman. The working life of a vehicle, and its incremental mileage at anniversaries or other preset intervals can be logged, making it easier to spot any discrepancies.
However, there are problems. Firstly, the system will have to comply with data protection requirements - and these vary from country to country, and even from state to state. Lawyers will probably make a fortune from assisting the Experians of this world, or from civil liberties organisations fighting against what they perceive as infringements. Secondly, the system is reliant on a telecoms connection.
Which begs the question of who will pay for the calls to the database centre? It is feasible that the desired data could be transmitted as part of the standard vehicle identification string whenever the car is in contact with the driver's chosen telematics service centre. If this is so the database centres could be linked to manufacturers' own control centres, but at this moment the entire telematics industry is in a state of disarray. Some are fixed on the idea of staying with pay-per-call GSM packages, others are looking towards GPRS or G3 data-packet systems, and others are advocating the use of closed radio systems. Somebody needs to establish a standard, but right now I haven't much of a clue who. It is likely that linking up control centres to national mileage databases will be fairly low on any list of priorities; far more pressing is the need to establish working telematics services which will achieve the desired result of providing a value-added service to individual drivers. It will need to be a pretty compelling package of benefits to persuade drivers that they should be paying for any of this technology. I was talking recently with a chap I know at the RAC Foundation - the good causes arm of that organisation - and he reckons that sooner or later government will become involved. I suspect that that might be some time, because firstly they'll have to find somebody inside the bureaucracy who understands the way that this technology works.
Having said all that, it is in the interests of car manufacturers to ensure that mileage recording of second-hand vehicles entering the market is validated - given that it affects vehicle residual values - and it has been hinted at that Signant, Europe's new cross-manufacturer telematics service founded by Ford, Peugeot-Citroën and Nissan-Renault, will be capable of integrating such a facility. Those of you to whom I have spoken previously will realise I maintain a healthy - some might even claim unhealthy - degree of cynicism about the way that there is a need for a joined-up solution. As with so many other aspects of the industry, it will be interesting to see how the telematics world shakes out over the next couple of years.
Dennis Foy
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Automotive Telematics
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