The Hindu Business Line : In-car navigation systems — Not positioned yet in Indian market

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In-car navigation systems — Not positioned yet in Indian market

S. Muralidhar

In terms of market size and penetration, digital in-car navigations systems represent a small percentage of the total passenger vehicle population. However, there appears to be sizeable growth potential for the device.

Driving in many Indian cities can be a nightmarish experience for the uninformed and inexperienced traveller. With roads that don't sport any names, building blocks that don't particularly follow a progression, addresses that even have the locals flummoxed and traffic regulations that change overnight, finding the way around can be quite task on your first visit.

Now, with travel by road picking up speed among car owners and domestic travellers, some kind of navigation tool could soon become a necessary addition to the luggage they pack up. Printed maps, advice and tips from friends and directions from roadside dwellers have been the standard sources of information for travellers in the past. But the future is set to herald a whole new wave of in-car navigation systems that are easy to use, employ cutting-edge technology and are far more accurate than the techniques that have been in use till now.

In terms of market size and penetration, digital in-car navigations systems represent a small percentage of the total passenger vehicle population. However, the potential for sizeable growth for GPS/GPRS-based navigation systems could come from two sets of buyers. One segment will be companies in the logistics sector, fleet operators and large taxi operators. The other segment will be the individual car owner who travels a lot and is looking for a navigational aid.

Globally, these types of navigation systems are grouped together and broadly classified as telematics systems. The market for these systems is estimated to be about $20 billion, with the biggest chunk (over 70 per cent) being the American and Japanese markets.

In addition to on-road navigation, these systems provide access to facilities such as email, news, weather updates, movies, video games, emergency roadside assistance, remote monitoring, automatic accident notification and for stolen-vehicle tracking.

Currently, a huge portion of the systems development (including chip design) and integration work is done by subsidiaries of multinationals, which have their software development centres in India. But the user segment for these systems is, as yet, miniscule here. Currently, commercial applications for telematics systems is the fastest growing segment in the domestic market, constituting about 75 per cent of the $8.5-million market .

Most of the business for this segment comes from the commercial vehicles market with applications such as vehicle tracking, driver communication and remote vehicle diagnostics.

But with the sales of luxury passenger cars growing at a fast clip, demand for such a navigational aid may also witness simultaneous growth.

After all, with increasing market segmentation even in the luxury passenger car segment and the felt need among carmakers for further value addition to ensure brand differentiation, in-car navigation systems are expected to be offered as a OE fitment option in many future D and E segment cars. According to a recent paper presented by Frost & Sullivan, a global research and corporate growth-strategy consulting firm, the Indian market for navigation systems from both the OE and after-market segments is expected to nearly double every year from 2006-07. Sales of navigation systems — integrated and handheld type — started from 2005, with a few players making tentative forays.

The Frost & Sullivan paper states that while a big chunk of the growth in sales, particularly from the OE segment, will probably happen from the year 2008, by 2010-11, a significant percentage of even B-segment cars could be using these on-board systems.

Despite the availability of a few such navigational systems, currently, the level of practical features that this technological aid offers is still limited. Owing to a number of restrictions and reasons the technology is, as yet, in its infancy in India. For one, these systems don't come cheap and prices could be as prohibitive as Rs 50,000 for a navigator with decent specs.

Another big restriction comes from the Government's strictures on making available digitised maps, which are required to ensure greater reliability in performance of in-car navigation systems.

Digital mapping may require aerial surveying, as terrestrial surveying cannot provide the level of accuracy and speed of conversion that is required for such navigation systems.

In spite of these drawbacks, the availability of roadside assistance and the need for digital security systems could drive future demand for these systems.

But until such aids reach the level of versatility of the ones sold as OE fitment in the US, they will be used more for other purposes — for example, as an entertainment interface rather than for the primary function of navigating.

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