MAutomotive Aftermarket D EPLOYING AFTERMARKET SOLUTIONS Challenges and Opportunities Presented by:...

mAutomotive Aftermarket

DEPLOYING AFTERMARKET SOLUTIONS Challenges and Opportunities

Presented by: Zaim AzrakCEO, Location Solutions

Date: 20 November 2013

©2013, Location Solutions Your World Within Reach!

2

Agenda

© 2013 Location Solutions Your World Within Reach!

• Who is “Location Solutions” (LS)?• Being a “mAutomotive Aftermarket” player• The Challenges in the Middle East• The Opportunities in the Middle East• The Stakeholders of an Emerging Eco-System

of Services in the Middle East.

Your World Within Reach! 3

LS in brief

© 2013 Location Solutions

History

Since 2004

Specialty & Expertise

Aftermarket Provider of:

• Fleet Management Solutions

• AVL - Vehicle Tracking Solutions

• Telematics & M2M Services

Regional & International

Presence

• Regional HQ: Dubai

• Development HQ: Rotterdam

• Regional Offices: Abu Dhabi, Riyadh, Jeddah, Doha, Cairo, and Beirut

• US Office: Detroit

Industries we serve

• Automotive• Transportation• Logistics• Construction• Oil & Gas

Market Position

• One of the leading and fastest growing Telematics Service Providers in the GCC

Your World Within Reach! 4© 2013 Location Solutions

Tran

spor

t Ind

ustr

y (P

asse

nger

/ G

ener

al)

Refr

iger

ated

Car

go

Indu

stry

Cons

truc

tion

&

Cont

racti

ng In

dust

ry

Oil

& G

as(R

oad

Safe

ty &

Driv

ing

Beha

vior

)

Cont

aine

r Tra

ckin

g

Car L

ease

& R

enta

l in

dust

ry

Stud

ent T

rack

ing

ATM

Tra

ckin

g

Verticals We Serve

And every vertical has its own Pain points, Technical Requirements, and Business Needs


Being A mAutomotive Aftermarket Player


Our Business Model

WHITE LABELED

Telematics Device

1. We are not a device manufacturer.

2. We procure the best of what OEMs have to offer.

3. Each model undergoes a solid QA assessment.

4. Hardware is a commodity.

OUR OWN ACCOUNT

Connectivity

1. We are not a Connectivity Provider - Connectivity is Provided by MNOs.

2. We procure Bulk SIM Cards from Local, Regional, and International MNOs.

Data Centers

Provisioning Tool

SIM Management Tool

Front End

Back End

Billing System

Account & CRM Management

System

+ Accommodate Several Hardware into a single platform

+ Ability to Customize The Solution

DEVELOPED OUR OWN IN-HOUSE

Sale

s,

Mar

ketin

g &

BD

Inst

alla

tion

Team

Tech

nica

l &

Sup

port

Deve

lope

rs

& S

oluti

on

Engi

neer

s

Solution is offered in Several Packages of Subscription-based Service to the client! All Under One Roof from a Single Supplier

Man

agem

ent,

Adm

in, A

ccou

nting

and

Colle

ction

SOLI

D P

ROCE

SSES

, DEF

INED

O

PERA

TIO

NAL

WO

RKFL

OW

, AN

D

VALU

E CH

AIN

Regulatory

Prices, Absence of M2M Platform, Detailed Billing….

Challenge?

Challenge?


Being A mAutomotive Aftermarket Player


AUTOMAKERS MNOS

Promoter?Early Adopter?Niche Player? Catalyst

CONNECTED VEHICLES / TELEMATICS / MOBILE

AUTOMOTIVEProvisioning of SIM…

Regulatory Issues…Privacy Policies…

What is the Best Business Model?

Service Delivery is still challenged!

In Fact• We consider ourselves as Industry Leaders• It is NOT important to manufacture telematics devices, equip the vehicle with

telemetry devices, or just offer connectivity it is mostly important to understand what your end-customer needs are and to adapt your services and solutions rapidly.

Third Party Player - Aftermarket Annoyance

Or maybe as:“Warranty Breachers?”

Just another Connectivity Client

“A potentially Future Competitor?”

How are we seen? How are we seen?

mAutomotiveAftermarket

Solution & Service Provider


Challenges for Being An Aftermarket in ME:Several Factors to Take Into Consideration


RegulatorsMNOs

Car Dealerships

Installation Management

Socio-Economical

Factors of each GCC country

Low-Quality Competition

Challenge Factors

Internal FactorsExternal Factors

Beyond Control

Time consuming

Can impact our business

Controllable

Easy to overcome

Require Proper Management

1. Client requirements differ (sometimes drastically)

2. Pricing3. Penetration Rate of

new Emerging Technologies varies

We try to adapt and turn some of these challenges into opportunities:• Innovative Solutions / Additional Features

• Customization• Integration of new Accessories

• Pricing Packages & Payment Methods• …and more

Self-contained, Geographically Dispatched “Smart installation Teams”


Challenges – MNOs: Service Limitations, Prices, and Relationship.


RegulatorsMNOs

Car Dealerships

Socio- Economical



Absence of Unified

Roaming Rates

No M2M Platform

Expensive Connectivity

Rates

Not in Control of SIM Card

Services

Intermittent Billing

Problems

No Data log per SIM

SIM billing starts from day

1 of delivery

Not seen as Technology Partners yet

Replenishment of SIM is a

slow process

Intermittent Technical

Glitches that harmed our

image


Challenges – Regulators: Privacy Policies, GCC-wide Standardization…


RegulatorsMNOs

Car Dealerships

Socio- Economical



Regulatory Policies and

mandates can vary drastically

Absence of Unified

Approval Process across

GCC

Cumbersome Submission

Process sometimes

Privacy Policies are of high concern in

some countries

High Approval fees in some

countries

Lack of Trust in Private

Telematics Service Providers

Should Play a significant role

in unifying roaming rates

in GCC

Better Control on illegal and unregistered competitors


Challenges - Relationship withCar Dealerships


RegulatorsMNOs

Car Dealerships

Socio- Economical



Cannot adopt any solution without his

manufacturer approval

Too much worried about

Warranty Breach even for OBD

devices

Fleet Sales Managers do not

see the value proposition yet to promote it

Dealers are conservative

with aftermarket products: Tint Film and that’s

it!

They come back to us only when

a corporate client requires

the solution

Some dealers lack the proper

technical knowledge

about Telematics

They should be an active

stakeholder in this ecosystem


Challenges - FacingLow-Quality Competition


RegulatorsMNOs

Car Dealerships

Socio- Economical



Market flooded with low-quality

cheap devices

Hardware that may affect the car electronics

Low prices with barely no

margins to sustain their

business

Very limited or zero after-sales

support

Outsourced installers –

Higher Risk & Liability

Usually a one or two-man-show

company

Import devices without Telecom

Regulatory approvals

They sell IT Solutions and

not focused on Telematics


Challenges - Different Socio-Economical Factors among GCC countries


RegulatorsMNOs

Car Dealerships

Socio- Economical



Solution Requirement differs from country to

another

Detecting of Idling in UAE is a prime feature, in

KSA it is not!

Diesel monitoring is

not looked after in KSA, while in

UAE it is.

Web User-Interface must

support multiple-languages

Pricing of Subscription Packages differ from country to another due to MNO Rates, Competition, and Internal Expenses

Connectivity Coverage is

limited still in some rural areas

Some fleet managers are

conservative and do NOT believe in

technology whatsoever


Opportunities for Being an Aftermarket in the ME: Sweet Spot for Emerging Technologies


The MENA region and the GCC in particular are considered to be a Sweet Spot for the Emerging Technologies

3G/4G (LTE) and widely spread GPRS connectivity

Internet / Smartphones and Tablets high

Penetration

A solid road transportation infrastructure

Sustainable Economy and transformation from Oil-dependant economy to knowledge-based economy. Modern Trade &

Logistics hub

Backbone of Wireless

TechnologiesHigh Demand

Buying P

ower

Promising Market for Automotive Telematics

Solutions


Opportunities are increasing due to several factors


Technology

High Dependence on Vehicles for Land Transport

Government Support for New

initiatives

Environment

2G/3G Availability, Devices: OTA, New Features, Wide Selection of Sensors, OBD-based Devices, Faster Chipsets and GPS/GSM Components, Availability of APIs or Real-time OS inside device

FLEET OPTIMIZATION, MANAGEMENT, UTILIZATION, SAFETY, SECURITY, VISIBILITY, DATA, REDUCTION IN

RUNNING COSTS

Harsh Climate Condition, Vast Distances, Absence of Road Landmarks, Heat

Local Authorities are rapidly adopting Telematics solutions to enhance road safety, limit accidents, increase public

safety, promote sustainable transport, and optimize traffic


Opportunities are increasing due to several factors


Construction & Contracting

Transition towards a knowledge-based

economy

Multicultural Society

The Oil & Gas Sector

Huge increase in the number of commercial vehicles and heavy equipment in the GCC. Requirement for electronic solution that can solve the pain points of plant hire and workshop managers.

GCC countries are promoting knowledge-base economy; Service, Manufacturing, Trade, Science/R&D firms are establishing

themselves in the region.

Highly depended on Land Transportation. Road Safety is the PRIME concern for the QHSE department in government-owned

Oil & Gas operators and regulators.

More then 8 languages are widely spoken in the GCC region.Uneducated drivers form the largest portion of the drivers in GCC: Lack

of proper driving ethics and skills.Blame Culture


The Stakeholders of an Emerging Eco-Systemof Services in the Middle East - The M2M


Telematics Solution/Service

ProviderMNOs

TelematicsHardware Vendors

The Cloud / Repository

Automakers & Dealerships

Fleet Owners (Corporate End-

Customers)

Consumer

The Beneficiaries

Banking & Finance

InsuranceVehicle

Recovery Service

Car Lease & Rental Firms

The Technology Providers

Government


• What is the Future holding?o Connected Livingo Smart Citieso Internet of Thingso Big Data


Thank You

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