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The company that powers GM’s marketing strategy

May 19, 2021

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The company that powers GM’s marketing strategy

Connexion Telematics (ASX: CXZ) is a software company that services US automotive companies like General Motors with its proprietary software, OnTRAC.

Connexion Telematics (ASX: CXZ) is a software company that services US automotive companies like General Motors with its proprietary software, OnTRAC.

OnTRAC powers General Motors’ courtesy, demo and rental car programs around dealerships in the US. 

“Imagine that you go into a dealer with a 2010 Chevy to get a service, the dealer will give you a 2021 model for free for a couple of days whilst yours is being serviced,” said Connexion’s CEO Aaryn Nania, when he presented on The Insider: Meet the CEO.

“This delivers a high level of customer service and it also gets the consumer thinking about upgrading to that nice 2021 model vehicle.” 

As well as delivering a good customer experience, OnTRAC enables both the dealer and the manufacturer to monitor maintenance and insurance of the cars.

Connexion’s business strategy is to embed the software into the daily work lives of its Dealership users. Connexion services circa 4,000 dealerships around the US, representing around 22% of all franchises. Currently, 10,000 employees use OnTRAC every day.

“Compared to potential competitors, as a company we benefit from a number of barriers to entry. There is the development cost, the training aspect, customisation for General Motors, we have integrated with their systems, and we are a trusted partner having built the relationship over quite a number of years,” said Aaryn.

“The feature enhancements that we develop improve customer experience but also improve the product’s stickiness, which entrenches our competitive position over time,” he added.

The automotive industry faces ongoing structural change in the form of the shift to Online Retailing, Electric Vehicles (EVs) and Autonomous Vehicles (AVs). Aaryn commented that “for dealers to remain competitive as we move through these three trends, they need to reduce their cost of doing business, and they need to improve the customer experience. Both of those objectives are increasingly reliant on technology, the likes of which we provide to dealers today, and are enhancing week to week”.

As a profitable company with good cash flow and a clean balance sheet, Connexion is in a good position to take advantage of its many strategic opportunities.

“We intend to grow outside General Motors by selling to other manufacturers and commercialising our dealership distribution as well, with our own products, third party products and commercial partnerships,” said Aaryn.

Aaryn Nania recently joined us for our fortnightly webcast ‘The Insider: Meet the CEOs’. This article summarises some of the information he shared with us during the session. You can watch a full recording below, or you can click here to book into our next session.

 

‘The Insider’ is a great way to hear directly from the CEOs of fast growing Australian businesses. You will get valuable insights to their industries and companies future prospects.

The Insider: Meet the CEOs – Event Details:

Date: Wednesday, 26th May

Time: 12pm AEST

Format: Online, 3 x 15 minute presentations

This is a free event. Click here to book your spot.

 

 

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