By 2015, SBD forecasts that in China over 1.5 million cars sold annually will be fitted with navigation systems that are capable of receiving traffic information, representing almost 10% of new car sales. However, this figure masks the challenges that lie ahead for the traffic information industry in this emerging market. Almost every part of the traffic information value chain in China is struggling with weaknesses that are holding back the market for traffic receivers from growing at an even faster rate.

As a result of the weaknesses, traffic information services are seen by many to be offering poor quality, and are therefore being poorly adopted by vehicle manufacturers. In the short term, the traffic information ecosystem is expected to undergo mild improvements due to:

• A larger number of data sources as local authorities mandate GPS/GSM units on a growing proportion of taxis, and as telecom operators (such as China Mobile) begin to more aggressively deploy cFCD solutions
• An influx of foreign traffic specialists partnering with local service providers in order to help them improve their traffic fusion expertise, thereby enhancing the quality of traffic services

Current health of the traffic information ecosystem in China

Longer term success and profitability will only be secured when the relationship between commercial service providers and local authorities matures. Currently, this relationship is forcing commercial service providers to overcome unnecessarily complex and expensive bureaucratic hurdles in order to obtain public traffic data. SBD believes that the only remedy to this problem will be a more proactive involvement from the central government in setting minimum standards for sharing traffic data across the entire value chain.

SBD have produced a new report, The future of commercial traffic information services in China, that answers the following key questions:

• Who are the key players within the traffic information industry in China, and what are their strengths and weaknesses?
• How widely are vehicle manufacturers adopting traffic information on their navigation systems and how fast are fitment rates expected to grow over the next five years?
• What impact is the low availability and high cost of traffic data sources having on the general health the traffic information industry?
• Which delivery channels are becoming critical for the delivery of traffic services in China, and how does this compare to other markets?  

To learn more about traffic information services in China or to buy the report The future of commercial traffic information services in China please contact kkuppuswamy@sbd.co.uk