Already the world’s largest car market since 2009, China now is on the path to become the leading country for embedded automotive telematics systems made by original equipment manufacturers (OEM), with sales expected to grow by more than a factor of eight from 2012 to 2019, according to a new IHS Automotive Research report from information and analytics provider IHS.
OEM-embedded telematics sales in China will rise to more than 9.5 million units by 2019, up from 1.1 million in 2012, as presented in Figure xx. Shipments will expand to 1.8 million units this year, and then climb to 2.7 million units in 2014, 3.8 million units in 2015 and 5.1 million units in 2016.
At least 12 vehicle OEMs will add telematics systems to their cars in China from 2013 through 2015, IHS believes. These will be mostly embedded mechanisms, as the systems have a strong start in the country given the impressive sales of OnStar by General Motors, and also because of the introduction of similar efforts by other OEMs in China.
Domestic OEMs take the lead
With the exception of Honda, all the top-selling carmakers in China are active in telematics. However, domestic automotive OEMs are the ones taking the lead on telematics deployment in the country, with many already having launched services or planning to do so soon.
For their part, foreign-based car companies are being more cautious, fearing it may not be the right time to launch China services. BMW, Mercedes-Benz, PSA and Ford have all talked about offering a local version of their connected infotainment systems for two years, but it wasn’t until April 2012 when the brands started to roll out services in full force.
A unique telematics market
The potential for telematics services in China is huge. But to succeed in a unique market like China, global infotainment platforms must deal with the tricky business of adapting to the country’s rich culture and all its nuances, deploying the proper language, maps and connectivity offerings in order to strike the right tone.
One of the biggest issues is localizing the human-machine interface for the Chinese language and finding the appropriate local map partner, let alone identifying local partners that can offer a full suite of mobile apps. These problems, IHS believes, are the reason why OEMs in general have experienced delays in launching their offerings, and why foreign-based OEMs in particular waited so long to initiate services in China.
But the tide may have turned at the 2012 Beijing International Automotive Exhibition, as a number of OEMs actually rolled out services during the event. This indicates car companies may finally be getting a handle on the problem—and have begun to understand Chinese market dynamics as well as the Chinese consumer—when it comes to telematics and in-vehicle infotainment.
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