China Automotive OEMs Face Telematics Challenges

BOSTON--July 19, 2011: In China, the Car OEM telematics market represents a lucrative opportunity in terms of both revenue and unit volumes. According to a recent Strategy Analytics report, 'China: The OEM Telematics Landscape,' shipments will rise 12-fold to nearly six million units between 2011 and 2018, a compound annual growth rate of 40 percent.

“Market developments are being held back by the lack of usability and user friendliness of interfaces, as well as by the high cost of mobile communication-data, lack of standards, industry fragmentation, inadequate business models and typically long development cycles in the automotive industry.”

"With the roll-out of telematics technology in cars, Chinese consumers will have access to a wide range of optional safety and infotainment-type telematics services by subscription," said David Xu, Senior Analyst in the Strategy Analytics Automotive Multimedia and Communications Service. "However, quality of service remains an issue as there are barriers to precise traffic information and comprehensive map data which are compounded by a lack of user awareness."

This report highlights the nature of industry participants from the perspective of the OEMs, Independent Telematics Service Providers and Wireless Carriers. The Strategy Analytics automotive team in China found that Chinese automotive OEMs were eager to provide consumers with comprehensive telematics services. These local automotive OEMs currently have the strongest position in the value chain. Mobile Operators and other service providers are eyeing this space, but are currently farther down the value chain.

Commenting further, Xu said, "Market developments are being held back by the lack of usability and user friendliness of interfaces, as well as by the high cost of mobile communication-data, lack of standards, industry fragmentation, inadequate business models and typically long development cycles in the automotive industry."

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Strategy Analytics, Inc. provides timely and actionable market intelligence focused on opportunities and disruptive forces in the areas of Automotive Electronics and Entertainment, Broadband Connected Home, Mobile & Wireless Intelligent Systems and Virtual Worlds. Headquartered in Boston, MA, with offices in the UK, France, Germany, Japan, S. Korea and China, Strategy Analytics works with clients through annual multi-client services, management team workshops and custom consulting engagements.