GM Makes Wireless Service Standard on All Models
In a major development for the telematics industry, GM and OnStar announced that the service will be standard on all GM cars in 2007. That means the wireless service will automatically come on all cars GM makes in the U.S. starting that year. It made 5 million last year.
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“It’s a big development for OnStar and telematics,” said Chris McLean, an attorney and expert on telematics. “It’s a major step forward in safety and… it represents the continuing convergence of transportation and telecom technology.”
“This is a big announcement,” said a source who represents companies on telematics issue. “They've expanded the offerings of telematics over the years and this is sort of a continuation. They feel that customers value it. You see that in the marketing. They believe people are distinguishing GM vehicles in part because they offer telematics…. What this announcement says is it’s now going to be available to a wide variety of customers and not just those who can afford the bells and whistles of the more expensive models.”
The development is expected to put pressure on U.S. automakers Chrysler and Ford to offer telematics on more models, sources said. OnStar is the largest U.S. provider, with ATX in 2nd place. Mercedes Benz and BMW, working with ATX, provide service as a standard offering on some models.
The development could be a shot in the arm for Verizon Wireless as well, which has a partnership with OnStar through its America’s Choice with OnStar plan. In Dec., OnStar announced it had hit the 3 million customer mark.
GM tied the development to a 2nd announcement that it would make electronic stability control a standard feature on its models by the end of 2010. “These moves are consistent with GM’s continuing effort to strengthen its brands, build on our history of innovation and leverage our global capabilities,” said GM N. America Pres. Gary Cowger.
OnStar is available as an option on more than 50 GM models. Customers who take that option get a year free but then must pay $16.95 a month to retain the service. About 60% do, an OnStar spokesman said. “The reason we're making this standard is there is significant customer demand for this service,” the spokesman said Mon. “Over 70% of customers say they need it on their next vehicle.”