A world of opportunities ~ Emerging markets for navigation and telematics in Brazil and India

FOR IMMEDIATE RELEASE
(Free-Press-Release.com) August 22, 2008 -- The in-car navigation and telematics industry is undergoing a dramatic period of change. New markets are emerging in countries such as Brazil, Russia, India and China (BRIC) that are experiencing rapid personal motorisation.

The emergence of the BRIC countries as potential hot spots for navigation systems and telematics services follows their dramatic economic growth in recent years. This growth has seen the appearance of a new middle class with a high demand for private cars.

As new motorists in Brazil, Russia, India and China buy their first vehicles they are exposed to some of the downsides of motoring ~ vehicle theft, traffic congestion, getting lost, breakdowns and collisions. It is these problems that are an opportunity for the navigation and telematics services industry to sell their solutions.

The combination of fast growth in vehicle ownership, mobile phone usage, and disposable income in the BRIC countries is a recipe that many navigation system suppliers and telematics service providers expect to produce growth opportunities. However, these markets are at a very immature stage and not much has been known about the specific demands and features of each country, until now.

“While many of the BRIC countries share similar characteristics of economic growth and immature markets, the specific conditions for navigation and telematics vary greatly,” says Stephen Longden, ITS and Telematics Specialist at SBD.

“Up to last year the Brazilian market for all in-vehicle navigation systems had been blocked by legislation aimed at preventing driver distraction,” he explains. “This legislation has now been lifted and this is expected to kick-start the navigation market in Brazil.” This growth spurt will cover both embedded OE navigation systems and Portable Navigation Devices (PNDs).

Legislation has also emerged as a major market driver for telematics in Brazil as the federal Government has announced plans to mandate the installation of tracking devices in all new cars sold from 2009. This new law is aimed at reducing the very high levels of vehicle theft currently experienced in Brazilian cities. Many of these thefts are accompanied by violence and firearms.

Once vehicle manufacturers have installed the stolen vehicle tracking systems in their cars, other telematics services may piggyback on the technology, says the SBD research. This should lead to a considerable market opportunity for vehicle manufacturers, hardware and software suppliers and service providers.

The situation in India is very different to Brazil with the drive for the telematics market coming from fleet management services rather than stolen vehicle tracking as car theft is less of a problem. The vast size of India, severe traffic congestion and the poor quality of much of the road infrastructure means that many truck and taxi fleet operators need to use telematics systems to keep track of their businesses.

While the Indian population has a much lower GDP per capita than Brazil, there is a rapidly growing middle class of many millions with wage levels approaching that of Europe. These affluent Indians live in the major cities, are highly IT literate and are keen users of mobile phones. They are a strong customer base for mobile phone-based navigation that is growing steadily within this market. PNDs and embedded systems lag behind due to their comparatively high price.

The vehicle market in India is dominated by simple, small cars with few accessories. In Brazil the market is more sophisticated with many vehicle manufacturers already offering integrated PND solutions while the technology leaders are planning OE embedded navigation systems

Although markets in Brazil, Russia, India and China all show growth opportunities for telematics and navigation, the socio-economic drivers for this expansion vary country-by-country, according to the SBD research. All of these factors ~ vehicle theft, road safety, traffic congestion, personal spending power and government legislation ~ need to be understood by vehicle manufacturers, system suppliers and service providers before they enter these new markets.
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