Satellite navigation is increasingly a “must-have” option for new car buyers, but manufacturer-fitted and aftermarket equipment is facing tough new competition from cheaper route-finding functions provided by portable units, PDAs (Personal Digital Assistants) and mobile telephones.
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Meanwhile “off-board” navigation systems, which require subscription and on-going payments for route planning and information services, continue to struggle to find favour with cost-conscious motorists.
These are among the findings of a report on European telematics prepared by technical consultants SBD.
“Our detailed analysis of the market and developments in technology shows that manufacturers are facing pressure to bring costs down if they are to meet the competition provided by cheaper options, such as mobile phones and PDAs,” a spokesman said.
The report said the market for satellite navigation systems has continued to grow in the past four years, but with the dominance of traditional on-board systems under increasing pressure from cheaper alternatives.
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By GlobalDataIn particular, the falling price of PDA navigation systems has had a big impact on sales of aftermarket embedded systems and the take-up of off-board, subscription-based telematics services, such as those offered by Fiat and Vauxhall/Opel.
Although PDA-based systems have only been available since 2002, SBD predicts they will take 30% of the European navigation market in 2004, with sales in excess of one million. In response, manufacturers are expected to develop cheaper, CD-based entry-level systems, while creating more versatile and efficient equipment for the top end of the market, making greater use of touch-screen and voice recognition functionality.
The report said both embedded and off-board navigation systems potentially benefit in five to 10 years time, when GSM and GPS systems may be fitted as standard to all vehicles to support e-call and road user charging programmes.
SBD anticipates the market will be more diverse by the end of the decade, with the arrival of the first hard disc drive navigation systems which will also work as on-board music servers, too.
The highest take-up for manufacturer-fitted satellite navigation systems in the new car market is among premium brands, which have recorded a 20% take-up across Europe; the figures for high-volume brands are between 5% and 8%.
SBD forecasts that the largest growth area in the next five years will be in the medium and executive segments. Overall, about 8% of new cars in Europe are ordered with navigation systems: in Germany the rate is double the European average; in the UK it is about half average.
