Second Innings for Telematics - but the On-going Auto Market Crisis will Decide the Future

Published: 19 Jan 2009

By Praveen Chandrasekar, Industry Manager, Telematics and Infotainment

Consider this - a growing European telematics market, stable North American one, 3.5 million subscriber base in South Korean space by 2010, and top events-driven Chinese telematics market. All these are showing signs of a second innings for a global telematics wave. However, this growth will face a big stumble block in wake of the recent auto market crisis sending ripples across the global auto fraternity. The most worrying factor is the sinking of General Motors (GM), which is the biggest contributor to the global telematics market through the success of its OnStar package.

The slowdown in the auto market, with major automakers such as GM and Ford facing looming crisis, will definitely put telematics in the backseat, especially in North America, as these automakers struggle to survive. Even in Europe, the crisis will force vehicle manufacturers, such as Mercedes Benz, Audi, and Volkswagen to postpone their telematics plan, focusing more on important aspects such as fuel efficiency and alternative powertrain concepts. As per Frost & Sullivan's analysis, the global telematics market, including Europe, North America, South Korea, China, and India, is projected to grow from 6.2 million units in 2008 to 16.5 million units by 2013, growing at a compound annual growth rate (CAGR) of 21.4 percent. However, with the current crisis impacting the market, the success of this conservative forecast depends on how fast things are back on track.

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