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China To Emerge As One Of The Largest Markets For Automotive Navigation And Telematics Services, Says Frost & Sullivan

SHANGHAI, April 1, 2013 /PRNewswire/ -- As vehicle sales keep rising, China is set to be one of the biggest markets for automotive telematics services as well as personal navigation devices (PND) and original equipment manufacturer (OEM) navigation systems. All vehicle manufacturers are following the embedded approach to offer complete packages to clients who demand connectivity and telematics services in vehicles.

New analysis from Frost & Sullivan ( http://www.automotive.frost.com), Key Trends and Forecasts for the Chinese Automotive Navigation and Telematics Services Market, finds that an era of low-cost navigation will emerge with the partnership of OEMs and PND manufacturers. Mobile phone-based telematics is to dominate due to high Smartphone penetration.

If you are interested in more information on this study, please send an e-mail with your contact details to Zhenhua Chen, Corporate Communications, at zhenhua.chen@frost.com.

In terms of overall navigation systems (embedded, aftermarket and PND), demand is set to increase from 10.4 million units in 2012 to 21.0 million units by 2018. Real-time connected services and co-operation with OEMs will help maintain the vitality of PND in China. However, the aftermarket embedded in-dash market share is projected to decline due to the rising penetration of Smartphone navigation and OEM navigation.

The number of Smartphone subscribers with navigation applications is estimated to expand from 93.2 million in 2012 to 400 million by 2018, making China one of the largest Smartphone navigation markets in the world. Higher Smartphone penetration and interfacing solutions, such as MirrorLink, coupled with competitive pricing strategies will also motivate the need for Smartphone navigation in cars.

"The Chinese market for telematics services will swell from 0.4 million subscribers in 2012 to nearly 4.0 million subscribers by 2018," noted Frost & Sullivan Senior Research Analyst Krishna Jayarman. "As decreasing costs boost adoption rates, more domestic telematics services participants are expected to participate in the market, which will focus on customer retention for services after the free period."

"Developing new business models for the mass market automotive segment will be pivotal," advised Jayaraman. "The idea is to offer navigation and value-added connected services to the mass market segment to leverage the exponential auto sales in China."

With increasing value chain integration, industry cooperation is required to ensure the development of the Chinese telematics market. For instance, to retain some level of control over navigation revenues, the most promising strategy for OEMs would to engage and collaborate with PND suppliers. Telematics service providers must find opportunities to bundle other value-added services, as well as include basic requirements, to differentiate their solutions in the market.

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