Big Potential For China's In-Vehicle Navigation Market: ABI Research

DRAGON SPACE

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Oyster Bay NY (SPX) Sep 23, 2004
With only two models of automobile offering in-vehicle navigation systems in China, this industry is in its infancy. But the growth potential for navigation technologies in this large country can't be ignored.

Several barriers impede development of an in-vehicle navigation market, according to ABI Research analyst Junmei He. The technology analysts have just released a study, "The Chinese Market for In-Vehicle Navigation Systems," which examines this market in its formative stages.

Little of China has been digitally mapped, mainly due to strict government control over map source data. Only 20 cities are covered by both models of automobile with in-vehicle navigation systems to date, and only three companies are authorized to make and sell digital maps.

According to He, "China is undergoing a massive upgrade to its infrastructure and road network. This rapid rate of change means that expensive map updates will be needed frequently."

Most GPS-based navigation systems are imported, but chipsets and components are also imported by Chinese vendors who assemble them into semi-domestic products. Imported systems cost US$1200-1800 (another inhibitor) while locally assembled units sell for two-thirds less.

Politics raises its head, too. The government, fearing dependence on the US-developed GPS satellite constellation, is promoting solutions based on China's own Beidou satellite, though in the near future Beidou will serve only industrial clients rather than individual clients.

Standards for maps and equipment are also lacking. But the government recently established a team to establish satellite navigation application standards, a task estimated to take three years.

That has not stopped Toyota Tsusho Corp., from entering a joint venture with the Beijing Siwei Tuxin Navigation Information Technology Corp. to produce and sell digital maps in China.

China's burgeoning auto industry will provide in-vehicle navigation's best support. The large volumes it will deliver should see wider adoption and significant price reductions by 2009.

DRAGON SPACE

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