China's automotive telematics market shifts to consumer-electronics-based systems
Embedded telematics systems from original equipment manufacturers (OEM) currently dominate China's automotive telematics market, generating sales of 1.5 million units in 2013, according to an IHS report.
When it comes to automotive telematics systems, Chinese consumers prefer embedded solutions that come from the factory installed in their vehicles. However, the country's motorists during the next seven years increasingly will embrace systems that are based on consumer electronics (CE) wireless devices such as smartphones, with these solutions set to take the lead in the country's telematics market in 2020, according to IHS Automotive, driven by Polk.
Embedded telematics systems from original equipment manufacturers (OEM) currently dominate China's automotive telematics market, generating sales of 1.5 million units in 2013, based on data from the new report entitled "Infotainment Market Overview: APAC." This compares to sales of just 119,000 for CE-device-based systems, and a mere 104,000 for hybrid systems that combine wireless devices with telematic control units (TCU).
But by the end of 2020, OEM-embedded solutions will be passed by CE and hybrid alternatives, as presented in the attached figure. OEM embedded solution sales will rise to 4.3 million units in 2020, but CE-device and hybrid systems each will amount to about 4.6 million during that year.
Telematics for the masses
Automotive telematics is defined as the integrated use of telecommunications and informatics, allowing information to be sent and received automatically from cars. One of the highest-profile telematics services is GM's OnStar, which can remotely detect when a car's airbags have been deployed, alerting an operator to call for assistance. Other telematics services include remote diagnostics—i.e., the capability to remotely monitor vehicle performance and determine whether a car is encountering mechanical troubles.
OEM embedded systems use a factory-installed embedded telematics module to connect to a service network. This can either be integrated into the in-vehicle infotainment system or come as a standalone unit. Such systems often are supported by operators, as in the case of OnStar. Embedded solutions are required for most telematics safety and security purposes, such as remote diagnostics, remote vehicle control and anti-theft tracking.
CE-device-based services represent a lower-cost alternative to embedded solutions, using consumers’ mobile devices to establish a two-way data connection for services. Hybrid systems feature both an embedded TCU and the option to use a connected CE device to provide a data connection.
Secretary of transportation
"For Chinese consumers, embedded telematics solutions represent luxury," said Celina Li, senior automotive analyst at IHS. "Motorists in China treasure the capability of embedded systems to access call-center operators for services, such as concierge and destination download. They associate these operator services with high social status, almost like having their own personal secretary. As a result, higher-end car buyers in China at present favor embedded systems over a pure CE-device approach. Easy access to cheap labor also makes deploying call-center services less expensive to maintain for OEMs in China compared to other regions."
Because of strong consumer demand, the OEM embedded telematics market underwent a major growth phase in 2010 and 2011. However, expansion slowed somewhat starting in 2012 as the market shifted toward CE-device and hybrid solutions.
The introduction of Chevrolet’s Epica model in April 2011 started the era of CE-device telematics in China. Since then, nine additional brands have adopted CE-device telematics solutions.
The hybrid market will grow as quickly as the CE-device telematics segment.
IHS expects the CE Device telematics and hybrid telematics markets in China to undergo a robust expansion during the next three years, with triple digit annual expansions. By 2020, IHS expects that the sales of these two market segments will finally surpass embedded telematics. The embedded, CE-device and hybrid market segments will split the total market into three nearly equal shares in 2020.
"The Asia-Pacific region now trails North America and Western Europe in terms of embedded OEM telematics systems availability," Li added. "However, led by China, the region is set to see its profile rise in the telematics business. China already is the world’s largest car market, and with consumers now buying more high-end vehicles and using more wireless devices, the deployment of OEM telematics in the country will increase at a rapid pace."
Case Study Database
Get more exposure for your case study by uploading it to the Plant Engineering case study database, where end-users can identify relevant solutions and explore what the experts are doing to effectively implement a variety of technology and productivity related projects.
These case studies provide examples of how knowledgeable solution providers have used technology, processes and people to create effective and successful implementations in real-world situations. Case studies can be completed by filling out a simple online form where you can outline the project title, abstract, and full story in 1500 words or less; upload photos, videos and a logo.
Click here to visit the Case Study Database and upload your case study.
Annual Salary Survey
In a year when manufacturing continued to lead the economic rebound, it makes sense that plant manager bonuses rebounded. Plant Engineering’s annual Salary Survey shows both wages and bonuses rose in 2012 after a retreat the year before.
Average salary across all job titles for plant floor management rose 3.5% to $95,446, and bonus compensation jumped to $15,162, a 4.2% increase from the 2010 level and double the 2011 total, which showed a sharp drop in bonus.