Internet-of-vehicles Looms for Oil Changes


Internet-of-vehicles Looms for Oil Changes

An increasing number of vehicles in China are equipped to transmit information about their operations across the internet, and this is expected to impact the supply chain of lubricants, an industry analyst told Lube Report recently.

The internet-of-vehicles will change the sharing of information about automotive maintenance, including oil changes, according to YCP Solidiance, an Asia-focused business consultancy.

“China is recorded to have approximately 17.8 million IoV [internet-of-vehicles] users in 2017 and is becoming the most important market in the world,” the firm said in a recent report, “The Future of Mobility in China.” “The penetration rate of IoV is expected to increase from 8.3 percent in 2017 to about 22 percent by 2020.”

“This [oil change] data is obtained by [original equipment manufacturers] and in-vehicle terminal equipment service providers and usually only shared with car dealers or 4S stores – which is not good news for independent workshops as the data may be valuable for car repairs and maintenance,” Nicholas Pechet, senior partner and head of Greater China for YCP Solidiance, told Lube Report.

He said Chinese e-commerce platforms like JD are expanding into the internet-of-vehicle market with “substantial bargaining power.” Although lubricant companies can gain through collaborations with such platforms, independent workshops will need to form alliances with OEMs and be part of the manufacturer’s repair and maintenance channel.

He described how the future consumption scenario may play out. “The IoV system will send a signal when a vehicle is running out of oil and push some oil product introductions on the application, allowing the owner to order the oil online,” Pechet said. “Alternatively, it could display nearby workshops, which are part of the maintenance network of the OEMs.

“Car manufacturers will have firsthand information on the condition of the vehicle and can choose whether to share [that information] with suppliers and workshops. More independent workshops and after-market product suppliers will join the OEM’s maintenance system to attract more customers,” he added. The report says over 70 percent of new vehicles in China, Russia, Western Europe and North America are now equipped with internet interfaces.

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