Stephen Longden, ITS and Telematics Specialist, speaks about the fundamentals of the market for telematics in China including Toyota’s launch of G-Book and the future trends in traffic information.
Q: Compared with the telematics market in America and Japan, what are the key differences for China in terms of deployment, scale and volume?
Stephen Longden: The Chinese telematics market is still at its infancy with only Toyota having launched full cellular services. However, there is a slightly longer history of traffic information services with both Audi and Nissan having launched services in 2008.
SBD expects that 1 million vehicles equipped with OE telematics systems will be on the road in China by the end of 2013. This represents fast growth but will leave China still a long way behind the fitment levels of the US, in particular.
Q: Traffic information has become an inseparable part in telematics. What does SBD think about the current status and future trend for traffic information services in China?
SL: Traffic information is a fundamental telematics service as it can facilitate dynamic navigation avoiding congestion. This function is very important to consumers and is a benefit of telematics that can be easily demonstrated by the vehicle manufacturer.
Traffic information collection and distribution activities are flourishing across much of China with services emerging in many cities through local organizations. The data is being collected through a combination of GPS monitoring of taxi fleets and also through roadside traffic control infrastructure.
In terms of the delivery of traffic information in China, there are still two rival broadcast technologies; RDS TMC from Europe and RTIC based on the Japanese VICS system. SBD thinks these two methods will continue to coexist for as long as the demand exists from vehicle manufacturers.
As OE telematics services become more widespread in China, delivery of traffic and routing information via a cellular link will gain in importance.
Q: China is the second market for G-BOOK and Toyota has invested a lot in the roll-out in China. Does this mean Toyota has found how to differentiate its brand in the Chinese market?
SL: Toyota’s decision to launch G-Book in China has given it the opportunity to market itself as an innovative technology leader, according to SBD’s recent report titled An Analysis OE Telematics Services. Although the services are only currently available in luxury Lexus and high-end Camry and Crown models, Toyota hopes that this image of a leading-edge company will help it sell low-end models even if they are not fitted with G-Book.
Q: Has G-BOOK greatly improved customer satisfaction?
SL: It is still very early to gather conclusive data on the consumer response to G-Book in China. However, information released by Toyota in Japan last month indicates that G-Book has had a high level of influence on the vehicle purchase decision and that using the operator to set the destination of the navigation system is by far the most popular service.
SBD is currently performing a series of G-Book Consumer Surveys to gather insight into the opinions of drivers that have actually used the system and also drivers of other vehicle brands that will be given test drives of Toyota models equipped with G-Book. Some initial results from this research will be shared with the delegates at this year’s Telematics@China event in Shanghai.
Q: Shanghai GM will launch OnStar by the end of this year, which is an example of a more mass market product. What do you think about OnStar's development in China?
SL: GM plans to launch OnStar initially on its luxury Cadillac models in China this December 2009. It will follow this by expanding availability to its mid-range Buick and Chevrolet brands. The service will provided without charge for one year.
This strategy is aimed at giving high numbers of drivers experience of the different services in the hope that a many of them will pay a monthly subscription fee to continue to receive OnStar. In the US, this tactic has generated nearly six million OnStar users.
Stephen Longden will be presenting “Developing OE telematics services in China ~ the impact of consumer response and government legislation” at this year’s Telematics @ China event being held on December 8 and 9 in Shanghai.
For more information about how SBD can help you with market strategy and expansion into the emerging Chinese market or to receive information about our G-book survey, please contact Juanita Appleby at jappleby@sbd.co.uk.