Fleet News

Fleets face high costs for in-car 'net services

FLEET budgets across Europe will come under severe pressure in the next few years as internet technology enters company cars.

The e-car has seized the imagination of vehicle manufacturers in 2000, with Ford unveiling its 24.7 concept, and PSA Peugeot Citroen creating the 'Wappi!' web portal for European drivers.

Car makers accept that customers are not prepared to pay upfront for the additional cost of this new technology. Instead, manufacturers will look to provide the in-car technology as standard in their vehicles, and then charge customers on a menu basis for each online service they use.

These services will range from traffic congestion warnings and satellite navigation, to facilities for drivers to find a hotel, check share prices and even download their favourite music and films from the web.

The danger for fleets is that company car and van drivers will be free to activate these in-vehicle telematics and 'infotainment' services, but will expect their employers to pay for them just as they pay for fuel and vehicle maintenance.

This will force fleets and their fleet management companies to develop disciplines and controls to prevent costs spiralling upwards.

At the launch of the Wappi! Internet portal in Geneva, Vivendi chairman Jean-Marie Messier said emergency and traffic information services would be free, and that other facilities would cost 'a monthly fee of five to seven Euros'.

But at the Economist Conferences' Automotive Conference in Geneva, Graham Bell, director of marketing, sales and planning at Delphi Automotive Systems, said in-car services would range from $20-$100 a month.

'Sales from mobile multi-media electronics are set to grow by 25%-30% a year over the next several years,' he said.

For a Saab 9-3, General Motors' OnStar system - a satellite-based safety and security service that enables drivers to summon roadside assistance and personalised medical aid at the touch of a button - has an annual subscription fee of $299 in the USA.

Jack Smith, GM chairman, said GM will have one million OnStar subscribers in North America by the end of this year, and four million by 2003.

Similar services will soon become available in Europe as manufacturers seek brand differentiation - and the opportunity to generate income from a vehicle throughout its life.

At international courier firm TNT, group fleet procurement manager Simon Boggis, said a corporate decision to subscribe to in-car online services would depend on whether the benefits outweighed the costs. 'The driver may want these services, but how is payment made, is it a taxable benefit, and how do we recoup the costs?' he asked. (April 2000)

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