Vehicle manufacturers planning to launch OE telematics services in China have a difficult job to select their partners for the value chain. This is particularly true for the crucial role of Telematics Service Provider (TSP) that coordinates the collection and provision of data between the vehicle and other service providers such as call centres.
Those international TSPs with experience in providing services to vehicle manufacturers have significant challenges in gaining the necessary licences while the domestic players that can get licences have very little experience of providing the automotive industry with telematics services. The early adopters such as GM and Toyota have overcome this obstacle by establishing their own in-house capabilities. However, this strategy is expensive and not appropriate for all vehicle manufacturers, and it will become increasingly difficult in China as the government becomes more active in enforcing its regulatory and licensing requirements.
Categories of TSPs emerging in China
Many carmakers in China have already started RFQ processes for telematics services and have been surprised by the number and variety of responses from Chinese companies offering to act as TSPs. These vehicle manufacturers - both independent domestic carmakers and the international joint ventures - need to understand the strengths and weaknesses of each of these potential partners as they establish their telematics value chains.
Strong domestic TSPs are emerging in China along with growing involvement by international TSPs through partnerships with these Chinese entrants. One China-specific development is the emergence of new types of TSPs into the market; companies from other parts of the telematics value chain (such as mobile network operators, content providers and call centre operators) are promoting themselves as TSPs. Some of these new types of Chinese TSPs will be more successful than others. Success, or otherwise, will be based on a combination of factors including the ability to partner with the international TSPs to gain IT expertise, access to the correct licences through their influence with the Chinese government authorities, and their ability to adapt to working with the domestic and international automotive industry.
Read our latest report Who will win the race to become China’s leading telematics service provider? to learn details partnerships forged by domestic and international vehicle manufacturers with TSPs such as China Unicom, Navinfo and 95190. This report will help you create your partnership strategy by analysing the different types of TSPs emerging in China are with case studies and clear explanations of their strengths and weaknesses. To buy this report contact Alessio at ABallatore@sbd.co.uk.
