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Intelligent Vehicles: Maintaining Competition and Consumer Choice in the Aftermarket Industry

Vehicle technology continues to advance. As cars get more and more complicated, repairing and maintaining them becomes more and more complicated. The automotive aftermarket industry faces a number of challenges to stay competitive in this changing technological landscape. Through it all, AIA Canada continues to stand up for the aftermarket industry, the people who work in it, and the Canadians who depend on it to keep their vehicles safe and on the road. 


The Canadian Automotive Service Information Standard (CASIS)

While it may not have name recognition, the Canadian Automotive Service Information Standard (CASIS) serves an important purpose in Canada’s automotive industry. In 1998, it became the law in Canada for vehicles to be equipped with standardized on-board diagnostics (OBD-II). OBD-II is a computer system installed in a vehicle that monitors and reports on the health of vehicle systems. Technicians plug a scan tool into the OBD-II port to access diagnostic trouble codes that they use to diagnose and fix problems.

When OBD-II became law, independent auto shops did not have access to automaker resources that they needed to service OBD-II equipped vehicles. Without access, independent auto shops would not be able to compete on equal footing with automaker’s authorized dealerships.

To rectify this, automakers and the aftermarket became signatories to the voluntary CASIS agreement. The CASIS agreement provides a framework for automakers to equally share with independent auto shops and authorized dealerships the special diagnostic tools and official service and repair information needed to service vehicles equipped with OBD-II.

The intent and the objective of equal sharing of automaker resources is to “maintain an open, fair and competitive automotive manufacturing, import, distribution, service and repair industry for the benefit of Canadian consumers and all stakeholders.” Signatories to the agreement claimed that giving consumer’s choice was at the heart of their decision to sign the agreement:

“Obviously, if an independent repair facility cannot access tools, training, and repair information, it cannot complete services and repairs to a vehicle. Instead, it must send the customer to the nearest dealership for those repairs. In many parts of Canada, particularly in rural areas, not all manufacturers have a franchise dealership close by, so our members are the ones Canadian consumers turn to for automotive service. Even in urban centres Canadians want freedom of choice when it's time to take their vehicles for service or repair.”

Dale Finch, Executive Vice-President, National Automotive Trades Association

To learn more about the CASIS agreement, check out these resources:

  • An Agreement Respecting the Canadian Automotive Service Information Standard
  • About the CASIS

Intelligent Vehicles

The internal combustion engine was a great leap forward in transportation. Two new great leaps forward in transportation are upon us. They are zero-emission (ZEVs) and autonomous vehicles.

Before vehicles can be fully autonomous, they need to transition from being a mechanical device to an intelligent device. An intelligent vehicle is capable of making decisions related to the driving process. More and more, vehicles are outfitted with technology that supports their intelligence, including software, sensors and an Internet connection.

ZEVs are typically intelligent vehicles because ZEVs are easier for computers to drive. ZEVs are commonly built with drive-by-wire systems that replace traditional mechanical control systems with electronic controls. With fewer moving parts, it is easier for ZEVs to be outfitted with new technology. Autonomous vehicles will add an estimated 200 to 300 pounds of technology to vehicles. ZEVs can better handle this extra weight than vehicles with an internal combustion engine because they weigh less because they have fewer mechanical parts.

ZEVs sales are on the rise. The Government of Canada has set a goal to achieve net-zero emissions by 2050. To achieve this goal, emissions from the transportation sector which is the second largest emitter of greenhouse gases in Canada must decline. Because of this, the government is encouraging the uptake of ZEVs. The federal government has set the following targets for ZEV market penetration: 10% of light-duty vehicles sales per year by 2025, 30% by 2030 and 100% by 2040. The decreasing cost of ZEVs is also driving sales. Costs are decreasing because of increasing market saturation. Automakers are ramping up their ZEV production to meet regulator and consumer demand; by 2025, the market will be saturated with an estimated 300 ZEV models. Costs are also dropping because of advancements in battery technology, economies of scale in ZEV production, native ZEV design (vehicles built on a custom electric platform, rather than adapted from vehicles with an internal combustion engine) and cooperation among automakers.


Automaker Vehicle Telematics Systems

Telematics systems are a feature of intelligent vehicles. In 2018, 32 of 44 automakers installed telematics systems in their vehicle fleet. By 2030, it is estimated that all new vehicles will be equipped with automaker systems.

Telematics systems:

  • Receive and download software.
  • Collect diagnostic data on the health of vehicle systems that is generated by sensors outfitted on vehicles.
  • Establish a Wi-Fi connection.

Telematics systems installed in vehicles by automakers will replace on-board diagnostics (OBD-II) as the source of vehicle diagnostic data. Because automakers own the telematics systems through which diagnostic data is collected, stored, processed and wirelessly transmitted, they are the de facto owners of the data and control access to it. This means automakers have direct, real-time and remote access to diagnostic data, while the aftermarket has to access diagnostic data from automakers on automaker terms, including price, timing and scope.


Threats to the Aftermarket

Intelligent vehicles pose a threat to the aftermarket parts and vehicle servicing sectors. Intelligent vehicles position automakers as both a competitor in and controller of these sectors. Intelligent vehicles put resources in automaker hands that give them the power to foreclose these sectors through exclusionary strategies and to leave vehicle owners with limited choice as to where they purchase vehicle services and aftermarket parts.

Intelligent vehicles threaten the aftermarket parts sector in a number of ways. First, automakers claim that aftermarket parts cannot be used in intelligent vehicles because of the unprecedented sophistication of them. Second, automaker telematics systems transmit data related to parts development. Because telematics systems installed in vehicles by automakers are the property of automakers, automakers have ownership and control of the data transmitted by them. This leaves automakers in a position to sell data needed for parts development on their own terms, including price, timing and scope. Since vehicle data is a matter of strategic importance as it defines who can innovate and create new parts, aftermarket access to this data on reasonable commercial terms is critical. Third, independent auto shops require up-to-date automaker service and repair information, including training information, to know how to properly integrate aftermarket components with new vehicle technology.

The vehicle servicing sector is threatened by automaker telematics systems. At some point, all new vehicles sold will be equipped with these systems that capture and transmit diagnostic data that technicians need to service a vehicle. Telematics systems will eventually replace on-board diagnostics (OBD-II) as the source of vehicle diagnostic data. Without intervention, automakers will control the terms through which independent auto shops access diagnostic data. This could, for example, lead to shops having to turn away jobs because they are unable to access the diagnostic data that they need to do a job need in a timely manner. A threatened vehicle servicing sector also threatens the aftermarket parts sector. If independent auto shops must access diagnostic data on automaker terms, there will be less traffic in shops which will lead to less demand for aftermarket parts that shops install and sell.

Automaker telematics systems further threaten the vehicle servicing sector because they give automakers direct, real-time and remote access to a vehicle which enables them to run applications inside a vehicle. This gives automakers and their network the capabilities to employ new and innovative services. These include over-the-air updates, predictive analytics and remote diagnostics. It also gives automakers the ability to communicate to vehicle passengers things like discounts and service reminders via the human-machine interface (modern dashboard). If the aftermarket does not have access to a vehicle, automakers and their networks will have a significant competitive advantage in offering services that the modern consumer has come to expect and desire.


Advocacy

To avoid threats to the vehicle servicing and aftermarket parts sector posed by intelligent vehicles, intervention is needed. The Canadian Automotive Service Information Standard (CASIS), the current agreement between automakers and the aftermarket, does not suffice to mitigate these threats. The CASIS addresses competition issues with vehicles that are equipped with on-board diagnostics (OBD-II). Specifically, it requires that automakers share service and repair information needed to service OBD-II equipped vehicles with independent auto shops and their authorized dealerships equally.

For a truly open, fair and competitive Canadian automotive aftermarket to continue to exist, new regulations at the federal level are needed that give the aftermarket direct, remote and real-time access to diagnostic data and the vehicle itself. To obtain this, AIA Canada advocates for vehicles that are equipped with automaker telematics systems to also be equipped with the Secure Vehicle Interface (SVI). The SVI is a communication protocol. It is hidden in the coding of vehicle technology and connects to the Controller Area Network (CAN). The CAN allows internal vehicle systems to communicate with one another without a central computer. If given authorization by a vehicle owner, data collected from the CAN that is stored on the SVI standardized, open data platform can be accessed directly, remotely and in-real time by independent auto shops. The SVI also gives the aftermarket direct, remote and real-time access to a vehicle, allowing the industry to execute applications inside the vehicle and to access the Human-Machine Interface - putting the industry on a level playing field with automakers.

On November 18, 2020, AIA Canada, in alliance with our aftermarket partners in the United States, launched the Your Car. Your Data. Your Choice.™ campaign. The goal of the campaign is to educate consumers, industry and government on the threat to competition and consumer choice posed by automaker telematics systems and to pressure the federal government to intervene to mitigate the threat. The campaign advocates for vehicle owners to have ownership of their vehicle data so that they can control which service providers have access to it. This is accomplished by equipping vehicles that are outfitted with automaker telematics systems with SVI.


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