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GM confirmed as Connexion Media’s US partner
Linked in: General Motors will use the Australian-developed Commercial Link fleet management system in its cars in the United States.
Connexion shares jump after GM revealed as its fleet system marketing partner
7 January 2016
SHARES in Connexion Media rocketed 40 per cent in early trade on the Australian
Stock Exchange after the Melbourne-based software developer revealed that
General Motors would distribute its fleet management product in the United
Investors pushed Connexion shares up from 25c to as high as 35c in early trade
before the price settled back at 28c, valuing the company at $45.6 million.
Connexion media chief executive officer George Parthimos said that the deal
with GM will give the company a massive boost.
“This is a game-changer for Connexion,” he told GoAuto from Las Vegas, where he
is attending the Consumer Electronics Show.
“It puts Connexion squarely at the forefront of connected car technology.
It is probably the first connected car solution for an embedded car directly
targeting consumers that’s even been done,” Mr Parthimos said.
GM has dubbed the system Commercial Link and it will be sold through 4000 GM
dealerships across the US starting later this year.
The American car-making giant was able to adopt the Connexion Media fleet
management system – marketed as Flex in Australia – because it has been
installing the OnStar concierge system, and the necessary communication links,
in its vehicles for years.
“GM has been quick off the mark because they are in a pretty strong position
because they already have embedded cars out on the road,” Mr Parthimos said.
“They made the heavy investment in connected cars years ago and that’s why they
were so fast to get a product as good as Commercial Link almost ready to go to
Mr Parthimos said there was an opportunity for GM to take Commercial Link to
other markets in Europe and Asia.
GM currently installs the OnStar 4G system in 30 different models, including
all cars made in the US.
“Each one has a built-in 4G connection for OnStar and GM is the biggest
connected car maker on the planet at the moment in terms of installed base,” he
According to Mr Parthimos, the Flex system is currently being evaluated by
eight other car-makers and aftermarket distributors, with five trials being
held in Europe and three in the US.
“All those trials are progressing and none of them have said no, so we are
still going through the process.”
Connexion had to dramatically upgrade its hardware when it won the contract
with GM. The company had previously expected to have around 20,000 vehicles
online, based on its Australian business.
When it won the Commercial Link contract, it had to raise $2 million in order
to boost its processing capacity to 1 million vehicles simultaneously, as well
as install a suitable call centre in Melbourne.
Like its other product, the miRoamer internet radio infotainment system
installed by Volkswagen and other car-makers, the Commercial Link system
involves no up-front payment.
“The deal is a straight-out revenue share. There are no retainers. It’s all
based on a rev-share between us and GM.
“GM look after all the sales, marketing and promotion at the front end and we
look after all the technology, the back end support, the call centre, that kind
of stuff,” Mr Parthimos said.
“This is a world first. When people look back in 10 years time, when all the
cars are connected, and ask what was the first service that consumers could use
that was embedded, this is it.”