SiriusXM, the North American satellite radio monopoly formed in 2008 with the merging of rivals XM and Sirius, has announced the acquisition of the connected vehicle unit of Agero, formerly known as Cross Country Motor Club, the leading contractor of roadside vehicle services to automotive manufacturers. The acquisition will help SiriusXM compete in the increasingly important area of vehicle connectivity. Some see the emergence and growth of digital streaming radio services as a potential competitive threat to satellite radio’s business model. By providing vehicle connectivity services, SiriusXM can potentially make money on providing the virtual “pipeline” to the vehicle, regardless of whether or not the customers are SiriusXM subscribers.
Agero was originally founded in 1972 as the Cross Country Motor Club, which began service in the New England area, before going nationwide a few years later. By the mid 1980s, Cross Country had become the leading roadside services provider contractor to car companies. By the mid-1990s, Cross Country began offering telematics services, around the same time General Motors launched its similar OnStar service in 1996.
In a press release, SiriusXM said the acquisition will accelerate the company’s ability to provide connected vehicle services over both satellite and cellular networks. Following the acquisition, SiriusXM will be the connected vehicle services provider to BMW, Honda, Hyundai, Nissan and Toyota products. The merger is expected to be finalized in the fourth quarter of 2013.