Automotive Online

The increasing sophistication of new cars, with their broadening range of electronic control and entertainment systems, and the pressure on independent garages to fend off the increasing desire of OEM’s to capture more of the aftermarket both during and beyond the warranty period, has resulted in the growth of a vibrant automotive data and diagnostics market. Independent garages need these tools to carry out their business, and the complexity of engine control systems is only set to increase with the wave of new efficient and hybrid engines under development.

Livingstone is seeing increased M&A activity and consolidation in this space, with recent transactions, such as Autodata receiving significant interest from both trade and private equity acquirers.

But as this market consolidates, where is the next high growth opportunity in Automotive?

The next five years will see the widespread roll-out of vehicle telematics. While many cars already store driving, fuel consumption and multimedia data (fuel consumption and engine performance data is already available on the BMW M4 and Audi A8 for example), the most important application of this technology will surely again be the lucrative aftermarket.

Connected cars, that can have their problems diagnosed remotely, their software ‘plugged’ and even new parts and repairs ordered or arranged directly from the car is the golden goose for OEMs who wish to control the revenue generated by their cars long after they have left the showroom. As with all automotive innovation, the early movers in this space are the premium marques but the size of the opportunity in the aftermarket, and the ability to roll this out to main platforms is likely to see a rapid development of this technology across other brands.

With the current strength of the UK premium automotive sector, this country is well-placed to take a lead in this space and we are already seeing a growing number of technology companies within telematics and communications for automotive emerge. Expect to see new automotive software champions step forward and competition to capture this new market to be fierce.

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