On your way with trusty GPS

Written by Kavitha Venkatraman | Updated: Aug 23 2009, 02:02am hrs
So you thought global positioning system (GPS)-based security systems are meant only for luxury vehicles segment Think again! According to a recent Frost & Sullivan report, they are breaching the confines of the luxury vehicles segment and are making forays into other categories. The report says the revenues of the passenger vehicle telematics and navigation systems market in India was $23.2 million in 2008 and is expected to reach a chunky $44.1 million in 2013.

The maps and navigation marketespecially in markets like the US, Europe and some parts of Asia Pacifichas exploded in recent years. They have started gaining consumer acceptance in emerging markets like China and Korea over the last two years and is fast becoming popular in India, point out experts.

While it is difficult to put down the exact sales figures for these systemsgiven that they are largely aftermarket in natureindustry analysts say there has been a more-than-two-fold increase in the sales of these fitments in the last three years. Even though they still have to make in roads into the subcompact car categories, which constitute 60% of the total car sales in the country, they certainly are sold in enough numbers to gather attention, says CV Raman, chief general manager (engineering), Maruti Suzuki.

Attribute it to the increasing level of awareness and consumer interest or to the dropalbeit marginalin prices of these systems as a result of focused marketing and decreasing costs of components, the bottomline is the concept is finding wider acceptability among consumers and is working out as a nice brand differentiators for manufacturers.

Take Volvo Car India, the Indian arm of the Swedish car major Volvo Car Corporation which offers on-board GPS navigation system on both its S80 and XC 90 carlines. Says Paul de Voijs, managing director of Volvo Car India, Most of our customers opt for the GPS navigation system. For mainstream brands, typically the younger, more technology-savvy audience would be attracted to a GPS navigation system; but it would eventually be accepted even by older audience, he says, adding, As with every new technology, GPS navigation systems will be expensive in the beginning but once the solution providers attain economies of scale it will be financially accessible to a wider sector of car buyers and owners.

For their part, executives at Maruti Suzuki India, say if GPS devices become more viable and the necessary infrastructure is developed in the country, the company can look at introducing the solution as a standard fitment in some variants of its models. Says Raman, GPS system is fitted in cars as an aftermarket accessory in the premium compact and premium mid-size category cars. It is mostly opted by the mid-size, upper mid-size and SUV customers.

According to Voijs, Volvo Car is the first brand to provide on-board GPS navigation system atop the dashboard on the carlines currently selling in India. This also provides minimum distraction to the driver as the screen is next to the instrumentation cluster. We currently offer over 400 cities across India and the software can be upgraded, he adds. The software provider is Garmin Solutions.

P Balendran, vice-president, General Motors India, says compared to the pre-2008 days, there is now a real consumer demand for such systems. The growth has been fuelled by the availability of low cost electronic components, satellite technology and ease of adapting to the electrical architecture of existing vehicles. The uptake among passenger car owners can only increase in the coming years.

There is also a huge penetration among the taxi fleet operators. Needless to say, with more flyover coming up and one-way streets designated, a GPS enhances maneuvering capability in traffic and helps in reaching destinations with minimum fuss.

But the question is, are Indians tuned to the concept of reading maps on the go Is the market for such devices poised to take off

The answer seems to be an overwhelming yes. According to an analyst with Frost & Sullivan, The increase in long distance-driving for recreation and exploration purposes has boosted the prospects of navigation devices. The rise in the instances of employee transfers to other states where the issue of language barrier comes into play, also augurs well for the industry. As the demand for safety and fuel optimisation becomes a priority among fleet operators, telematics is seen as the most efficient solution.

One may argue that India will take some time before it catches up with the European market for car navigation systems, things have started looking up with the availability of good maps, both in the printed and digital formats and is likely to improve as uptake increases and the software becomes more friendly.

We are a developing nation and the road infrastructure is still being developed. So it wont be fair to draw parallels, says Raman. The main reason for the mass acceptability of such devices in the West was the fast development of related infrastructure where value added services like online traffic advisory and congestion data is shared real time with drivers. If a similar development takes place in India, there is no reason why these systems would not penetrate further. One more factor that will hasten growth will be the availability of digital maps and upgrades. Says Voijs of Volvo, Solution providers would eventually need to upgrade software to include location-based and value-added services as is the case in other developed markets.

A beginning has already been made. Car manufacturers are tying up with navigation systems suppliers, says the Frost & Sullivan report.

Balendran points out that India being a price sensitive market, value for money would be the key for higher acceptance of this product. Low-cost GPS can be the USP of a vehicle. We are seeing an increasing number of options being developed and made available in the after-sales market.

Price remains a critical factor. These devices are currently priced anywhere between Rs 15,000 up to Rs 35,000. The Chinese systems in the market are available for about Rs 10,000 apiece.

But their reliability is a major concern. Above all is the issue of consumer education. Manufacturers of telematics systems also need to focus on educating customers about the service aspect of the technology. Improving service will help customers trust the technology and boost sales through word-

of-mouth marketing, notes Frost & Sullivan report.