Automatic Car Locators Stuck In A Small Niche Market

The fledgling automatic car locator market continues to struggle to get off the ground, although many suppliers are hoping for a bright future for the segment.

During the past 18 months few products, including those announced to the press, have survived past the test phase. Yet nearly a dozen suppliers say they are investigating the market or planning to offer an automatic car locator in the future.

Apart from LoJack, the companies selling car locators at present include InterTrak, Frisco, Texas; Omega Research, Douglasville, Ga.; Elite Logistics, Freeport, Texas; and Autostart, Montreal, Canada. Additional suppliers have announced products that were delayed in their market debut, including Audiovox and DEI. Those claiming they are investigating the market include Clarion, Black Widow and Applied Securities Technologies (AST).

Despite all the interest in car locators, the roadblocks to successfully selling the product are significant. They include finding reliable service providers to monitor the units and educating retailers on how to sell the products. Price is an obstacle as well.

DEI expected to launch its Automatic Vehicle Locator in March 2003 but said it was forced to change plans when telematics service provider, Wingcast (a Ford and Qualcomm company) went out of business in June 2002. "We wanted to enter into the arena with a service provider that was rock solid," explained director of marketing Jim Jardin. "We thought we had that with Ford and Wingcast. It's just like a cellphone, anyone can make one but getting the nationwide service is different." DEI said it expects to show a new locator system at International CES.

Autostart, which sells locators in Canada, is branching into the United States. "It's slow to get a product going like this because we have to educate the retailers, not only about the product, but about the service fees. A lot of companies with high budgets didn't last in this business. Their burn rate was too high," said sales director Pete Fazi, commenting on the demise of companies such as Immobilizer, Houston, and SecuraTrak, San Francisco, which recently exited the consumer market.

As InterTrak sales and marketing VP Barnet Fagel elegantly summed up, "The road to telematics is pockmarked with companies that believed all the analysts' research. Unfortunately, the only people that really know what will happen are the consumers."

Suppliers however, continue to find ways to circumvent the obstacles. InterTrak has been on the market for approximately 10 months and has sold to over 5,000 clients, said Fagel. At present, the company is finding success helping 12-volt retailers sell to fleet operators who need to keep track of their vehicles.

"We're convincing dealers they can go into fleet businesses in their own area and sell the locators for driver control and dispatch. The device keeps track of accumulated mileage on the vehicle without tapping into any speed sensor wires. Because of the GPS, as the vehicle moves, it accumulates mileage data," said Fagel. He said the locators are important, as well, to guard against driver "moonlighting."

"At many companies, the drivers take the vehicles home at night with them. Then you can get drivers using vehicles in off hours or running side jobs when the company's supposed to get the revenue," he explained.

Another market for the locators, Fagel said, is the sub-prime finance business where cars are sold to people with "less than stellar" credit. Dealers can put the device in a car and if the customer is overdue, he can disable the starter.

InterTrak said it aims to sell to 800 to 1,000 12-volt dealers by the end of the year.

InterTrak's aftermarket unit is called AutoTrak and it also sells a unit to new car dealers called Aegis. AutoTrak offers location, notification and convenience features. The system can be linked to a security and remote start system. Features include live Web tracking, door lock and unlock by phone, remote start, horn sounding and light flashing in Morse code, and low car battery notification. It also allows users to initiate remote start to charge the battery.

If the alarm is triggered, the customer receives a notification through either e-mail or phone. InterTrak uses the control channel on the Cellemetry network, which has agreements with all major carriers, says Fagel.

Omega Research and Development has sold its GPS2000 car locator for about a year, although it has been in a limited launch phase. According to a spokesman the company has "ramped up slowly" and now has 700 active subscribers. "We wanted to test all the areas of the country before upping our production," he said, noting that the company is just now increasing production.

The GPS2000 offers live Internet tracking and also allows users to track via phone. A computer-generated voice will inform the caller of the car location by address, street location or distance from the nearest highway exit. It also offers theft notification, when connected to an alarm system, via phone and e-mail. And users can control, via phone, features such as remote start, door lock/unlock, horn honk, trunk and sunroof.

The GPS2000 uses Aeris.net MicroBurst technology. It includes a black box with back-up battery for $500 installed for a basic locator. By adding outputs for door locks, etc., the price can rise to $700. Omega Research has a minimum activation fee of $48 for the first year, which allows 150 uses. The service fee after that is $50 per year.

Elite Logistics has been on the market since 1999 and said its sells 1,000 to 1,500 units per year. Its PageTrack unit uses the SkyTel and Weblink paging networks, and starts at $15 per year for basic alerts such as a triggered alarm for stolen or towed vehicle. For conveniences, such as door unlock, the user is charged at a per-use rate of $1.50. Fleet prices are approximately $45 per month and the basic unit fee is $615.

PageTrack features include Internet tracking, theft notification, remote start capability and door lock/unlock. PageTrack also has a manned control center for operator assistance.

Audiovox, which showed a Pursuitrak locator last January, said it is performing final testing and will begin shipping the product at CES. The system will offer vehicle tracking and other functions such as remote door lock/unlock and alarm arm and disarm functions. Code Systems, which Audiovox purchased earlier this year, is developing its own version of the car locator, said Audiovox mobile electronics senior VP Tom Malone.

"We've held back a formal introduction because we wanted to make sure we tested the unit in almost every region of the country before doing a national rollout. We want to make sure there are no issues with coverage. We are now at the point where we are comfortable with the operation of the product and will ship at CES," Malone said.

Autostart began selling its AutoTrax product in the U.S. in July on a limited basis, although it has sold in Canada for almost two years. The company said it has a commitment over the next 12 to 16 months for 16,000 units in Canada.

Autostart says AutoTrax requires only a two-wire connection. It offers Internet tracking in real time, theft notification, Internet-based lock/unlock, remote start capability, vehicle disabling, geofencing and low-battery protection. The unit has a suggested retail price of $549.99 installed with a basic service fee of approximately $10 a month. A second, downsized unit that can plug into the cigarette lighter or be hardwired into the vehicle is due from the company.

Both Autostart units allow users to hook into a laptop or PDA to view their driving position in real time on a screen-based map. Autostart says it is currently expanding its presence in the U.S. and therefore expects to expand the sale of AutoTrax here.

Noted Autostart's Fazi, "The American public is always willing to listen about a product for personal safety. Your children are out late and you want to know where they are or to make sure your wife or husband is OK. Or if your daughter locked her keys in the car, you can unlock on the Internet. We have found Americans will not shy away from this type of product if the price is right. People will pay $10 a month and $600 to get this."

Apparently several other companies subscribe to the same belief. Black Widow said it is considering entering the market, although its chief concern is price. Said sales manager John Martin, "I think prices will come down in the next 18 to 24 months. The magic price is $199. I don't know if we'll get there in two years, but that's what everyone wants to achieve."

AST, Alberta, Canada, which produces UltraStart remote start units said it may offer a car locator next June.