Connected VehicleVehicle Telematics

Telematics-One Group explains Russian auto telematics market in light of ERA GLONASS

The introduction of equipment with the support of ERA GLONASS will give a serious impetus to the sale of additional services including services related to the connected car.
Igor Kheresh, Business Development Director | Telematics-One Group

The government is the main driver of telematics implementation in Russia. Several state projects help to accelerate the penetration of telematics solutions in everyday life not only of private car owners, but also of corporate and public transport.

Among these initiatives,there is the mandatory fitting of tachographs in vehicles build to carry more than eight passengers and in vehicles allowed to carry a total weight of over 3.5 tons. By January, 1 2018, all vehicles of types N2, N3, M2, and M3 should be equipped with tachographs. First of all this measure helps to comply with the conditions of work and rest, and it will improve safety on the roads.This measure also resulted in the fact that some companies bought tachographs with monitoring modules and implemented the fleet management system. This single solution has increased safety on the roads and the efficiency of transportation costs.


For private car owners was introduced the saving time possibility to register a minor accident without calling the police, the so-called European accident report. Thanks to the equipment installed in the framework of ERA GLONASS, the insurance company can get the data from the accelerometer,so it will significantly simplify the procedure of settlement of losses and improve the quality of customer service.

The most important initiative in the domain of telematics that will concern all vehicles is the introduction of the system ERA GLONASS. It aims to reduce mortality in accidents, the severity of their consequences and the number of cases of irreversible injury. In Europe, it is analogous to the eCall system.

It is expected that the system will save at least 4000 lives every year. It will decrease the response time of emergency services by 30% and in that way reduce the severity of injury and the duration of treatment and bring great economic impact.

In Russia from January 1, 2015, all cars for the new type vehicle approval must be equipped with on-board devices that support the ERA GLONASS. From January 1, 2017, this requirement will apply to all new cars sold in Russia.
Every year in Russia are sold 2-3 million cars and car manufacturers’ models range is renewed every 4-5 years. Taking into account these facts we estimate that by the beginning of 2017 there will be about 200 thousand cars equipped by ERA GLONASS system, and by the end of 2017 we will count 2.5 million, and every year this number will increase by about 2-3 million. However, much will depend on the dynamics of the automotive market in Russia.
Sales of 2-3 million cars a year will provide reasonable prices for telematics equipment, and the right to choose its supplier will remain with the automakers. Therefore, we cannot say that the implantation of telematics hardware will severely affect the car price or the automaker profits.

The introduction of equipment with the support of ERA GLONASS will give a serious impetus to the sale of additional services including services related to the connected car. Telematics equipment with a basic set of functions necessary for the ERA GLONASS is already by default installed in a new car, while an additional set of options for insurance telematics (UBI), stolen vehicle recovery(SVR) and information services can be added at will of motorists and depending on car manufacturers policies. Actually, telematics comes in every new car. To obtain telematics services you will no longer have to install the equipment, just to connect to it. The service cost becomes lower and car owners perceive telematics services not as some extra services but rather as a more complete use of the capabilities of their car. In that way, it is easier for the client to try some services because he does not have to pay for the equipment and can always reject the service if he did not like.

The possibility to use the data from ERA GLONASS equipment for the car accident settlement in the insurance company on the European accident report will make the client appreciate the advantages of recording in automatic mode of his movements. It will facilitate the transition to smart insurance, when the equipment regularly not only records but also estimates driver’s behavior. Many insurance companies have this kind of offers. They help to install the equipment and the driver uses it for 3-6 months depending on his insurance program. After that, he gives it back and gets the well-earned discount.From this time the drivers style is not tracked and may change and not always in the best interest of the insurer. Therefore, the presence of built-in equipment will allow monitoring driving style on a regular basis, giving the client statistics and evaluation and motivating to safe driving. According to the survey, clients consider partner programs between insurance companies and automakers with special discounts on the CASCO price as extremely important. “Smart insurance” just offers these significant discounts and strengthens its positions.
The equipment for the ERA GLONASS can also be used for stolen vehicle tracking and recovery,a very popular service in Russia.

Thus, the equipment for the ERA GLONASS becomes the central base element for the creation of Connected car, with the ability to expand the number of services, depending on the desires and needs of the client. Now in Russia there are different programs of automakers offering services for the Connected car, but their functionality is significantly inferior to what is offered in Europe and U.S. On the one hand, this is due to the national peculiarities of Russian consumers. They have different preferences on services and functions that they want to see in the Connected car, for example, the warming up of the engine in winter. On the other hand, the localization of the parent company telematics platform is very expensive and it becomes economically more advantageous to turn to local telematics operators and service providers and to use their platform.

As an employee of a commercial company, I can say that the automakers interest for telematics service providers with their own platform has grown. In the connected car services there is a great potential of competitiveness for car manufacturers, because vehicles technological base of different brands is becoming more and more similar. Connected car services give an additional value to the client and build brand loyalty. The large diversity and amount of services will give to automakers the possibility to differentiate themselves. Moreover, the government will also participate in the development of the range of services by providing the infrastructure of ERA GLONASS system to commercial companies.

Russia has spent about 3.9 billion rubles to create the system ERA GLONASS, and its annual maintenance will come to several hundred million. To reduce budgets costs for the creation and maintenance the government is preparing a road map for commercializing ERA GLONASS by the use of its infrastructure for the provision of additional paid services. It can be state services, such as online tachographs control, heavy vehicles use tax payment or services for companies from various business sectors, for example, transport monitoring, and services for private clients(drivers and passengers) in the field of insurance telematics, vehicle remote diagnostics, etc. However, the service of emergency response will remain free in all cases.

The government do not intend to monopolize the market and actively works on the search for mutually beneficial mechanism of interaction between the state system and commercial providers and operators of telematics services. I think that in the near future Russian telematics services market including Connected car will develop and maybe even more actively than in the U.S. and Europe due to the support of the state.

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