Beijing Motor Show points to booming in-vehicle telematics market in China

The recent 2012 Beijing International Automobile Exhibition will be remembered for beautiful models, enthusiastic audiences, new car model launches; as well as several eye-catching in-vehicle telematics systems.

05/11/2012


The recent 2012 Beijing International Automobile Exhibition will be remembered for beautiful models, enthusiastic audiences, new car model launches; as well as several eye-catching in-vehicle telematics systems such as Ford’s SYNC, Hyundai’s BlueLink and SAIC’s iVoka. According to an ongoing research project named “OE In-Vehicle Telematics - China – 2012”, IMS Research, recently acquired by IHS Inc., points out that the in-vehicle telematics market in China is booming right now, with the next few years being critical for the future development of the market.

Currently there are three main types of telematics system in China: there are standalone telematics systems like GM’s OnStar, embedded telematics systems such as Toyota’s G-Book, and connected telematics systems like Ford’s SYNC. Although connected systems were introduced to the Chinese market most recently, they are forecast to grow more quickly than the other two types, due to their relatively low cost and the bridge they offer to connect smart phones to cars, which younger drivers value highly.

Michael Liu, market analyst with IMS Research’s Automotive and Transport Group comments, “Besides the three major global brands (OnStar, G-Book and SYNC), it is encouraging to see some local Chinese telematics systems popping up. For example, iVoka is actually like the early stage of Apple’s Siri. You can ask it to do things like make hands free calls, send messages, provide navigation, check for weather, or even just talk with you for fun. But the system is far from mature; lots of things need to be improved in the near future. For example, you need to wait for at least 2 seconds before iVoka comes back to any of your inputs. This wait time will be too long for most people, especially young drivers. That said, it’s still a good start and is pointing to the right direction for future development.”

Although in-vehicle telematics seems quite appealing to Chinese consumers, there are some critical factors needed for the market to grow healthily in the future. Finding good and successful business models is an important one. At the moment, the subscriber renewal percentage for OnStar and G-Book is very low, making it hard to be profitable. It is critical for vehicle manufacturers, TSP providers and telecom companies to find the balance amongst themselves so that the whole supply chain benefits.

Another key factor for the future of in-vehicle telematics in China is to provide drivers with truly useful functions that they love to use. Navigation based on real-time traffic information can be one, but there needs to be more. Only when drivers use some functions frequently, will they be willing to pay.



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