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Strategic Analysis of European Market for Low Cost OEM Navigation Systems
Frost & Sullivan, June 2009, Pages: 86
This Frost & Sullivan research service titled Strategic Analysis of European Market for Low Cost OEM Navigation Systems provides market trends, forecasts and roadmaps. In this research, Frost & Sullivan's expert analysts thoroughly examine the following markets: low-cost OEM navigation, including fixed in-dash, integrated personal navigation device (PND) and mobile phone-based navigation systems.
Market Overview
Low-cost OEM Navigation Systems Set to become More Ubiquitous
The European automotive navigation market will witness a shift towards integration and be the centre point of innovation, resulting in integrated infotainment platforms. As consumer electronics vendors increase their level of participation, automakers will face intensifying challenges in terms of matching the former’s pace of product innovation. This is projected to occur as the market recovers from the current recession. The infotainment market will experience a greater number of products and services shifting towards the mobile phone-based medium, which is more cost effective, with the active involvement of the telecom community. Market expansion will be supported by the steady growth in fixed in-dash, mobile phone and integrated PND systems, coupled with the fact that some of these systems are set to be offered as a standard feature in select vehicle models.
“Low cost OEM navigation will usher the era of infotainment integration which will eventually lead to the second lease of life for telematics”, notes the analyst of this research. “PNDs have dominated the market and will continue to challenge automakers in providing a low cost solution in the short term.” However, automakers have embraced low-cost OEM navigation and, in future, in-car navigation will be ubiquitous. Automakers are using navigation as a differentiation factor to sell vehicles in the current recession. Renault is the first car manufacturer to introduce a low-cost fixed in-dash navigation system into the market. To boost sales, it offers navigation as a standard feature on the Clio on select trim levels. Similar developments such as Garmin’s offering of an integrated PND in Suzuki as a standard feature, as well as Fiat’s Blue&Me, have experienced considerable success. The prospect of low-cost OEM navigation is more a question of when rather than how.
Automakers to Adopt Twin Approach to Navigation
The biggest challenge facing the market currently is the dramatic slowdown in Europe. Eastern European markets have also been affected by the ongoing recession. The short-term focus of automakers has shifted towards more fuel-efficient vehicles. At the same time, the dominance of PNDs will be adversely affected by consumer perception, wherein consumers are unwilling to spend additional money to buy a fixed navigation system when a portable unit is available for a nominal price. “The recession comes at the wrong time for the navigation market, which was looking at an upswing with a lot of initiatives emerging in the European markets,” cautions the analyst. “The current situation will force many vehicle manufacturers to postpone their plans.”
Promisingly, the more developed European markets are expected to stabilise as soon as government measures have addressed consumer concerns and created a favourable climate for sales. To maximise growth opportunities, automakers should use navigation as a differentiating factor to sell vehicles. Currently, with the rapid growth in the GPS-enabled mobile handsets segment, it is ideal to use these devices and bundle them with a service package that is ideally handled by telecom operators. This model has proved to be highly successful in Asian markets. “Auto manufacturers need to segment navigation in two clear ways during these difficult times; one, a low cost portfolio based on GPS-enabled handsets and fixed in-dash for low segment vehicles and the other, a high-end, premium embedded package, packing in a lot of features for high-end vehicles,” advises the analyst. “The low-cost portfolio should be managed by a partnership between auto manufacturers and navigation providers.”
Market Sectors
Expert Frost & Sullivan analysts thoroughly examine the following market sectors in this research:
- Low-cost OEM navigation
- Fixed in-dash
- Integrated personal navigation device (PND)
- Mobile phone-based navigation systems
Technologies
The following technologies are covered in this research:
- OEM navigation
- Mobile phone based navigation
- Integrated PND
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