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Originally Posted by mkaresh
This isn't a new idea. Jack Smith and friends hatched the idea to make GM into a service company a decade ago. Since they couldn't make money selling cars, they hoped to make money on telematic services. This was the thinking behind OnStar when they first launched it. GM goes from silver bullet to silver bullet, and for a couple of years this silver bullet was telematics.
Problem was, the implication was that the cars didn't have to be so hot if you were making money on the services.
VW opted to purchase OnStar to fulfill some of its obligation under the Lopez settlement. I think it agreed to buy $700m in parts from GM over a specific number of years. After they fulfilled this obglibation, they dumped OnStar.
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Of course it's not a new idea. But GM is now branching out into more services. And as I noted, there's a slight danger in GM focusing on these services instead of working the perception of their cars.
Telematics are a nice feature to have. BUt telematics can be expensive, and a recurring cost for the consumer. Good for GM. Bad for consumer, but good for the consumer should he/she really need them.
Point is... if you get lost on a road once a year, is it really worth $299 to get yourself unlost?