GM to expand OnStar by offering it to Other Automakers
In this harsh economic time, GM is turning to its economics book for help. In a move to exploit the cost advantages that a business obtains due to expansion, the company is looking to offer OnStar to other auto companies.
In Econ 101 we called it economies of scale, and this isn’t the first time GM has tried to grow its service subsidiary. OnStar has had past dealings with Acura, Volkswagen, Audi, Subaru and Isuzu and a private label deal with Lexus. Those former deals have fizzled out due in part to the switch to digital service in 2007.
Now, OnStar President Chet Huber said the company is looking to once again bring OnStar to other vehicles in the U.S. and Canada as well as branching out other parts of the world. Huber says that OnStar has remained profitable despite a slow down in new subscribers due to falling new vehicle sales. It currently has 6 million users.
Source: Automotive News