Fitch predicting lucrative connection.
Fitch Solutions, a subsidiary of Fitch Ratings, this week said the recent tie-up between Vodacom and Toyota in a groundbreaking Wi-Fi initiative will prove to be profitable for the two companies.
Vodacom Business partnered with Toyota and technology company Altron last month to launch Toyota Connect. The connected car service will support in-car Wi-Fi and additional value- added features for all Lexus and Toyota models produced in SA from this month. In a research note, Fitch Solutions said the deal will allow Vodacom to tap into a consumer base demanding additional sources for data use, beyond their mobile phones and homes, while Toyota will benefit from greater product differentiation and increased appeal to price-sensitive
“The Toyota Connect service will also require each vehicle to be fitted with a Vodacom SIM card and the operator will leverage its experience as an advanced data services provider to lift user spend through promotional offers as well as innovative data plans,” Fitch Solutions said.
“The partnership will also be beneficial for Toyota as the South African market is experiencing a decline in passenger vehicle sales. South Africa’s weakened macroeconomic environment has impacted automakers’ sales.”
The deal means that every Toyota and Lexus will come standard with in-car Wi-Fi – including 15GB free data on activation. Thereafter, customers can top up using Toyota Connect or their
banking apps. Fitch Solutions noted that Vodacom’s mobile data revenues have come under strain in the South African market. William Mzimba, chief executive at Vodacom Business, said: “Just like smartphones, cars today will need to be connected to provide a dynamic user experience. We’re witnessing an increasing number of car buyers ranking in-car technology as important as vehicle performance.”
President and CEO of Toyota SA Andrew Kirby said: “We are thrilled about the imminent
addition of benefits such as licence renewal, which will allow Toyota Connect users the ability to renew their vehicle licence disc via the technology.”
By Kabelo Khumalo