After recently announcing a new $37 million funding from investors, INRIX has quickly put that cash to good use by acquiring one of its competitors, ITIS Holdings. This represents the latest sign of consolidation within the traffic information industry, as service providers push to expand both their coverage and their customer base beyond their local markets.
 
But what does this mean for the automotive industry?
 
In Europe it means that the decision of which service provider to choose has narrowed further to three main players: INRIX, Navteq and TomTom. Although there remain a large number of country-specific service providers, these will increasingly be sidelined infavor of pan-European agreements with one of these three players.
 
It also means that INRIX will have acquired a wider customer base with many new vehicle manufacturers. INRIX will be hoping to grow these relationships further and carry them across to new markets as it expands its coverage.
 
Which brings us to the third significance of this acquisition: the ability to more quickly expand into emerging markets. The traffic information industry in developed countries is already saturated with too many competing services, making it harder for many service providers to differentiate their solutions and grow further.
 
Various service providers, including INRIX, therefore see the expansion into new emerging markets such as South East Asia and South America as a key opportunity to expand their revenues. However, deploying services in these new markets is no easy task. The lack of traditional roadside sensors increases the need for scalable probe-based data sources. This is where INRIX is hoping to further benefit from its acquisition of ITIS, which has a long history of successfully deploying NetFCD probe services across emerging markets. The technologies and business models developed by ITIS will undoubtedly help INRIX ramp up the pace of its international expansion.
 
As vehicle manufacturers begin to expand and adapt their own navigation offerings in emerging markets, they will be looking for safe partnerships with well-known companies. If INRIX is able to succeed in its ambitious expansion, it will become an attractive option for many of those vehicle manufacturers.

Be the first to know of the latest developments in the traffic industry with SBD's range of insightful, accurate, and easy to access automotive research. Do not miss our reports on Global benchmark of real-time traffic information services and The future of commercial traffic information services in China. You might also be interested in our End User Survey on opinions on Traffic Information in Beijing. To learn more about these reports or to buy contact Alessio at ABallatore@sbd.co.uk.