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Auto Manufacturers Seek Younger Buyers for Telematics Systems and Services

    MINNEAPOLIS--May 15, 2002--Auto manufacturers have offered telematics systems for a few years but most are sold in luxury cars or upper trim levels. But a new generation of telematics systems and services are showing up in mass-market vehicles.
    The movement to introduce second-generation telematics in something other than luxury cars represents different assumptions about the utilization of telematics systems and services. "It is done on the premise that these customers have a strong desire to be "connected" while in their cars," says Phil Magney, principal analyst at Telematics Research Group.
    "There is a changing mindset about telematics from some auto manufacturers who are targeting their second-generation platforms at a different market segment." A case in point is Nissan's Carwings -- a telematics system and suite of services currently only available in Japan on the Nissan March. "Nissan has chosen an inexpensive mass-market vehicle to debut their latest generation of telematics," adds Magney. "Buyers of these vehicles, who are in their 20s or early 30s, represent the "i-mode generation" who have become dependent on messaging and connectivity with information devices."
    According to Telematics Research Group, other automotive manufacturers are making similar moves with new systems from Toyota, Honda and Daihatsu in Japan, and Opel and Mercedes in Europe. These telematics systems are based on new platforms and services designed to meet the needs of younger buyers who may be less interested in safety and security.

    Telematics Forecast:

    These new assumptions will ultimately impact the adoption and deployment of telematics-enabled autos. According to TRG estimates, there were nearly 2 million telematics-enabled vehicles sold last year, with the majority of those being OnStar-based vehicles sold in the US. By 2008, annual sales of telematics-enabled autos will have jumped to 12.4 million. Both Western Europe and Japan lag the US in the deployment of telematics today but new systems like Nissan's Carwings will help stimulate those markets.

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              Worldwide Sales of Telematics-Enabled Autos
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                                      2001    2003    2005    2007
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USA TM-Enabled Auto Sales (#M)        1.85    2.96    4.52    7.56
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USA TM-enabled Auto Share (%)         92.5    77.2    57.6    46.7
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USA TM Share of Auto Sales (%)        10.8    17.6    26.2    42.2
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W. Europe TM-Enabled Auto Sales(#M)   0.03    0.25    1.0     2.7
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W. Europe TM-enabled Auto Share (%)   0.2     1.5     5.8     14.9
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Japan TM-Enabled Auto Sales (#M)      0.02    0.11    0.5     1.2
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Japan TM-enabled Auto Share (%)       0.3     1.9     7.4     17.8
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Worldwide TM-Enabled Auto Sales (#M)  1.94    3.44    6.33    12.4
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Worldwide TM Share of Auto Sales (%)  3.48    6.1     10.7    19.8
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    About Telematics Research Group:

    Telematics Research Group tracks, analyzes, and forecasts the worldwide market for automotive telematics. TRG's latest report: Worldwide Telematics: Regional Markets and Forecast, examines the worldwide market for in-vehicle telematics by profiling the current market and likely evolution within North America, Western Europe and Asia.
    See Telematics Research Group at EyeForAuto's Telematics Detroit. Dr. Egil Juliussen, TRG's principal technology analyst will address telematics technologies on May 15th.
    For information on TRG go to www.telematicsresearch.com