Car Navigation Market in South East Asia

by

Vivek Vaidya Vice President - Asia Pacific Automotive & Transportation

29th Nov, 2011 Automotive Practice

2

Overview Southeast Asian Automotive Market I

Agenda

New Market Trends

II Drivers & Restraints

III Navigation Market Trends

IV Market Forecasts and Future Outlook

V

Key Conclusions and Opportunities VI

3

Overview ASEAN is home to more than 2.5 million light vehicle sales in 2010

39% 34%36% 36%

37% 37% 38% 38%39%

31% 31%31%

32%

30%30%

29%29%

28%6%

4%

5%5%

5%

5%4%

4%4%

25%31%

27%27%

28%

28%

28%

29%29%

39% 34%36% 36%

37% 37% 38% 38%39%

31% 31%31%

32%

30%30%

29%29%

28%6%

4%

5%5%

5%

5%4%

4%4%

25%31%

27%27%

28%

28%

28%

29%29%

39% 34%36% 36%

37% 37% 38% 38%39%

31% 31%31%

32%

30%30%

29%29%

28%6%

4%

5%5%

5%

5%4%

4%4%

25%31%

27%27%

28%

28%

28%

29%29%

Market Overview: Light Vehicle Sales, 2007 - 2015

Brunei

Cambodia Indonesia

Laos

Burma (Myanmar)

Philippines

Vietnam Thailand Singapore

Malaysia

• The light vehicle market in in South East Asia 4 countries (Thailand, Malaysia, Singapore and Indonesia) accounted for more than 1.5 million vehicles in 2010

• Thailand is the largest light vehicle market in the region which account for nearly 40 percent

4

Toyota, 32%

Honda, 10%

Perodua, 8%Isuzu, 9%

Proton, 7%

Nissan, 6%

Others, 28%

Overview Thailand is the largest light vehicle market in the region which account for nearly 40 percent Market Overview: Light Vehicle Sales by

Segments, 2007 - 2015 Market Overview: Market Share of Top

Vehicle Manufacturers, 2010

• Toyota holds the largest market share in South East Asia 4 countries with more then 30 percent of the market share, followed by Honda, Perodua, Isuzu, Proton and Nissan

• MPV and Pickup segment will remain major segment which account for nearly half of the market because of popularity in Thailand and Indonesia, although A and B segment will grow gradually

Continental brands such as Mercedes-Benz, BMW and Audi holds less than 1 percent of the market

22%

26%

26% 26%

25%

25%25%

24%24%

27%

20%

20%

19%

19%

19%

18%

18%18%

17% 18%18% 20%

20%21%

21% 21% 21%

22%

26%

26% 26%

25%

25%25%

24%24%

27%

20%

20%

19%

19%

19%

18%

18%18%

17% 18%18% 20%

20%21%

21% 21% 21%

22%

26%

26% 26%

25%

25%25%

24%24%

27%

20%

20%

19%

19%

19%

18%

18%18%

17% 18%18% 20%

20%21%

21% 21% 21%22%

26%

26% 26%

25%

25%25%

24%24%

27%

20%

20%

19%

19%

19%

18%

18%18%

17% 18%18% 20%

20%21%

21% 21% 21%

22%

26%

26% 26%

25%

25%25%

24%24%

27%

20%

20%

19%

19%

19%

18%

18%18%

17% 18%18% 20%

20%21%

21% 21% 21%

5

Navigation Market Characteristics by Country

• OEMs has offered navigation systems for their passenger cars but recently introduced for pick up trucks

• Japanese OEMs fit navigation systems in production line in Thailand, while continental OEMs import CBU vehicles with navigation.

Thailand

• Proton is currently offering PNDs and will change to embedded type, and even plan to start telematics services in 2015.

• While, another local OEM, Perodua is currently offering PNDs for limited models but no intention to increase models with navigation.

Malaysia

• Singapore can afford more embedded navigation systems than other countries, but necessity of navigation systems are very low because the land is small and traffic systems are well established.

• The market is too small for OEMs to develop navigation systems for Singapore.

Singapore

• Although Indonesia has large population and land, navigation systems are still very expensive for most of Indonesian.

• Richer people who can afford navigation systems do not need navigation systems because they have drivers.

Indonesia

6

Thailand Navigation Market: PNDs dominate the car navigation market

with nearly 96 percent of the market due to reasonable price and plenty of choices

74,400114,700

176,700

247,800

322,300

418,800

544,500

652,400

779,000

Market Size by Stage: Frost & Sullivan Scenario (Thailand), 2007-2015

• PNDs dominate the car navigation market with nearly 95 percent of the market due to reasonable price and plenty of choices

• Embedded type is used by OEMs but will not penetrate into the market due to high price and availability in the aftermarket

PND 96.0%

Embedded 4.0%

• Currently mainly luxury and larger vehicles in D segment and above offer navigation systems but it will shift to smaller segment such as C and B segment in the future • Garmin and MIO are major PND players in Thailand which account for more than 70 percent of the market share

7

Malaysia Navigation Market: Aftermarket is still major contributor,

accounting for 90 percent of the market

Market Size by Stage: Frost & Sullivan Scenario (Malaysia), 2007-2015

• The navigation market in Malaysia has been growing very fast in the past 2 years, although the market is still small.

• Currently the car navigation market is dominated by PND and embedded type is not favored by national automakers due to the complexity of the system integration on their current product and higher cost

• Garmin and Papago are major PND players in Malaysia

• Mobile phone map is a threat for PNDs as the functions of

mobile phone map have improved dramatically in the last few years and the screen size is getting bigger which is easier to see

PND 98.9%

Embedded 1.1%

24,40060,400 69,600

104,400155,800

238,100

353,300

524,800

781,100

8

Singapore Navigation Market: Embedded type is available as OE

fitment but not available in the aftermarket

Market Size by Stage: Frost & Sullivan Scenario (Singapore), 2007-2015

• Car navigation systems are not indispensable in Singapore because the land is small, road network is relatively simple and busy traffic time is predictable.

• However, car navigation systems , especially PND type, are getting popular because of reasonable price, convenience and multi-functions

• Garmin dominates the PND market in Singapore with more

than half of the market share in the aftermarket.

• Embedded type may penetrate into the market if more attractive telematics services such as maintenance reminder, breakdown calls, emergency calls are available

PND 94.7%

Embedded 5.3%

5,200

18,400

31,200

38,00042,200

45,70048,000 48,000 46,800

9

Indonesia Navigation Market: OE and dealer fitting is not common and

yet to see signs to become popular

Market Size by Stage: Frost & Sullivan Scenario (Indonesia), 2007-2015

• The car navigation market in Indonesia is currently very small but will grow very fast toward 2015 due to increasing public awareness and affordability.

• The car navigation market is dominated by PND and embedded type may not able to penetrate further into the market due to high price.

• Garmin and Mio are the major market players in Indonesia

which have about 90 percent of the market share.

• Garmin holds about half of the market share, while MIO has about 40 percent of the market share.

PND 99.5%

Embedded 0.5%

12,20018,100

37,700

52,900

79,100

110,600

143,800

158,400

174,600

10

Generation Y: Goods and Services Catered to Values, Beliefs, Interest and Lifestyle

Personalization

and

Individualization

Techno Savvy and

Connected 24 X 7

Civic and

Environmentally

Friendly

Demanding and

Impatient – “Fast

and the Furious”

Personalized Search and

News

Social Networking Profiles

Personalized Products

Gaming Gizmos

Smart Phones

Facebook-on-the Move

Microblogs

Eco- Transport

Bag-For-Life (Paper Bags

Instead of Plastic)

Paperless Banking

Instant Text Messaging

Instant Chat

Speed Oriented

Gaming (Car Racing)

M65B-18

11

Queue for iphone It is very common for people to take picture

of food they are about to eat and post it on

Facebook…before they finish the dish they

get hundreds of likes

Cell Phones are commonly used while

travelling, for voice as well as data service.

Unlike Japan it is not considered rude to

make a call while travelling

Smartphones are integral part of life

12

Embedded systems in Southeast asia are set to grow…but

-

50.00

100.00

150.00

200.00

250.00

2010 2011 2012 2013 2014 2015

Embedded Systems in South East Asia

Embedded

13

The volumes of PND would be significantly higher… but what is more exciting is…

-

500.00

1,000.00

1,500.00

2,000.00

2,500.00

3,000.00

3,500.00

4,000.00

2010 2011 2012 2013 2014 2015

Embedded Vs PND growth

Embedded PND

14

Smart Phones are likely to outnumber PND and Embedded systems in order of magnitude!

-

50,000.00

100,000.00

150,000.00

200,000.00

250,000.00

300,000.00

2010 2011 2012 2013 2014 2015

Smart Phones Vs PND Vs Embedded

Embedded PND Smart Phones

15

Southeast Asia shows one of the highest intentions to purchase smartphones at global level

16

Built-In Beamed-In

Brought-In

Features like eCall which are built into the vehicle

embedded telematics unit e.g. Ford Sync 911, OnStar

ACN

Features like Ford Service Delivery Network (FSDN) which allows real time services to be sent to user using his mobile

phone with data and Bluetooth

Bringing in apps from platforms like Apple App

store through users smartphone for use in

vehicle through vehicle HMI, e.g. Syncast in Ford Sync

Built in Apps Already Exists like 911, Beamed-in and Brought-in are the ones in focus Currently

Built-In – Source of revenues are from hardware

and apps subscription for OEMs, hardware

providers and service providers

Beamed-In – Source of revenues are App

Subscription fees for OEMs and

associated service providers

e.g. Mercedes Mbrace $280

subscription for 3 years service

Brought-In – Source of revenues for OEMs are only through

interfaces for using Smartphone apps inside the car, e.g. Smart iPhone cradle, Ford Sync, etc

17

Internet in the Car: From an automakers perspective Brought-In method the most cost effective and way to bring internet radio into the car

Beamed - In

Brought - In

Built - In

These are head-units which are installed when the vehicle is assembled.

A dedicated SIM card built into the vehicle

Bluetooth is the primary method of data transfer from the portable device to the car speakers

These are portable devices such as mobile phone or music players. The mobile phone network is used for connectivity

These are mobile phones used as a modem or have a USB modem

Connectivity is provided by tethering consumer mobile phone or having a modem in the car

BMW Connected Drive

Ford SYNC

Source: Frost & Sullivan

Smart drive kit for iphone + smart drive app

GM OnStar**

**OnStar has some safety features built in but a variety of media features are beamed in only on request

USB Modem

ClarionMIND Pioneer in-dash unit

Aftermarket

These are aftermarket head-units that provide access to internet with use of consumer mobile phone

18

Southeast Asia has the potential to leapfrog the conventional steps in development of navigation and telematics market

Built - In

These are head-units which are installed when the vehicle is assembled.

Aftermarket

These are aftermarket head-units that provide access to internet with use of consumer mobile phone

Beamed - In

These are mobile phones used as a modem or have a USB modem

Brought - In

These are portable devices such as mobile phone or music players. The mobile phone network is used for connectivity

19

Critical Development Points for Vehicle Centric and Consumer Centric Apps

Emergency Assistance, Stolen vehicle tracking, usage-based insurance,

advanced diagnostics and breakdown assistance

Internet radio, Vehicle information, breakdown

assistance, Social networking, parking

information, dynamic POI information, EV charge

spots location information, EcoDriving, etc

Embedded

Tethered Built inside the car by OEMs

and tier 1 suppliers

Hosted from Smartphone inside

car using tethered connectivity

Critical

Good to Have

Ecodriving,

Diagnostics

, Internet

radio, etc

20

Telematics Related Apps

BMW Roadside Assistance

Mercedes Mbrace App

BMW Connected App

Continental TPMS App

Vehicle Information

Apps

Audi Car Monitor App

myChevrolet App

Ciao Fiat Smartphone

App

Dynolicius – Diagnostics App

Entertainment Apps

Toyota I Heart Internet Radio

App

Ford - Sync Enabled Pandora

Ford – Sync Enabled Stitcher

BMW/Mini Connected App

Location Based Service Apps

Toyota Park Smart App

OnStar Mylink App

Trapster – Speed Camera

App

Viper Smart Start Remote

App

Navigation Related Apps

TomTom Navigation App

Bosch Navigation App

Toyota Smart G-Book App

Mercedes Smart Drive App

Others

EV Apps – BMW Active E, Nissan

LEAF apps

Zip Car – Car Sharing App

Fauercia Smart Fit – Seat

Related App

Green Apps – Green Meter

App

Source: Frost & Sullivan.

Vehicle Manufacturer Developed Apps OEMs are Currently working on API’s to Control Entertainment Apps on Smartphones through Vehicle HMI and are Also Developing Dedicated Apps in many Areas

21

A growing user base for mobile phone-based Navigation and location based

services is prompting interfacing these devices to vehicle display

Implications

Source: Frost & Sullivan

Few major PND manufacturers

dominate the market however, Mobile phones

are a threat to PNDs

Gen Y Influence very high in future HMI designs and infotainment concepts –

touch screen, voice commands critical

requirements

Market is still nascent to many

evolving technologies around

telematics and infotainment

ASEAN Market is mainly dominated

by PNDs with slower growth for

Embedded systems

Mobile phones may become the preferred navigation and connectivity devices for

majority of the car users

In-dash unit market may never take off in this region

Conclusions and Opportunities

Vehicle manufacturers and connectivity service providers need to evolve a

different road map for these markets

22 22

Appendix – Frost & Sullivan Research Content

23

2011

2011 Apps, HMI and Telematics Voice of Consumer Study (In-progress)

US Consumers’ Attitudes, Perceptions, and Willingness to Pay Towards Mobility Apps, HMI

Concepts and Telematics Services

2011

2011 Apps, HMI and Telematics Voice of Consumer Study (In-progress)

European Consumers’ Attitudes, Perceptions, and Willingness to Pay Towards Mobility Apps,

HMI Concepts and Telematics Services

2011

2011 Comfort and Convenience VOC Study (In-progress)

European Consumers’ Attitudes, Perceptions, and Willingness to Pay Towards Multiple

Comfort and Convenience Technologies during Different Driving Phases

2010 US Voice of Customer Study: Telematics & Infotainment and App-Store Applications

2010

2010 Infotainment Voice of the Customer: European Consumers’ Attitudes, Perceptions, and

Willingness to Pay Regarding New Generation Infotainment, App Concepts, and HMI

Solutions

2009

European Consumers’ Desirability and Willingness to Pay for Connected Navigation,

Location-Based Services and Features

2009

Russian Consumers’ Desirability and Willingness to Pay for Connected Navigation, Location-

Based Services and Features

2008

Voice of Customer Study – Desirability and Willingness to Pay for Navigation Systems and

Telematics Services (US)

2008 Consumer Desirability & Willingness to Pay for Navigation Systems and Features (Europe)

2007

European Consumers’ Attitudes, Perceptions, and Willingness to Pay Towards Multiple

Comfort and Convenience Technologies Forthcoming

Telematics, HMI, Connectivity and Navigation Related Existing and

Upcoming Consumer Research

24

2012

Strategic Analysis of the European Telematics Services Market - Focus on Emergency

and Breakdown Assistance

2012

Strategic Analysis of the European Telematics Services Market - Focus on Stolen

Vehicle Tracking

2012

Strategic Analysis of the North Telematics Services Market - Focus on Emergency,

Breakdown and Vehicle Tracking Features

2012

Strategic Analysis of Tracking Legislation and its Impact on the Telematics Services

Market in Brazil

2012

Strategic Analysis of ERA GLONASS Legislation and its Impact on the Telematics

Services Market in Russia

2012

Strategic Update of the In-Car Audio Systems Market in North America - Including Focus

on Audio Systems, Amplifiers, Speakers, Aux-in Features, Sound Processing Software,

etc

2012 Strategic Update of New Developments in the European Automotive HVAC Market

2012

Impact Assessment and New Developments in Smartphone Interface Technologies Such

as Mirrorlink in the European and North American Automotive Market

• Location-based

services

• GPS / Navigation

systems

• Infotainment systems

• Wireless

Communication /

Bluetooth

• CV Telematics

• RVD

3G, GPRS. HSDPA, UMTS, WiFi

Completely

Off board

Navigation

Real Time

Dynamic

Traffic

Information

Mobile TV

- DVB H

Audio

& Video

Downloading

Social

Networking

Tools

Parking

Information

&

Reservation

Pedestrian

Navigation

eCall

- Aftermarket

Solution

Games

Variable message signsVariable message signs

Forthcoming

Telematics, HMI, Connectivity and Navigation Related Upcoming

Research – 2012

* Draft titles subject to change based on other customer feedback as well

25

2011

Key Trends and Forecasts of Navigation Systems and Telematics Services in China, India and

Select APAC Markets

2011

Key Trends and Forecasts of Navigation Systems and Telematics Services in North and Latin

American Markets

2011

Key Trends and Forecasts of Navigation Systems and Telematics Services in Western and Eastern

European Markets including Russia

2011

Strategic Analysis of European and North American Automotive Human Machine Interface Market -

Part 2 Display and Instrument Clusters

2011

Connectivity, App Stores and Cloud-based Delivery Platforms - Future of Connected Infotainment

and Telematics Market

2011

Strategic Analysis of Global Automotive Market for IT Mobility Platforms

Billing and Smart Charging are Two Key Opportunity Areas in the EV Infrastructure Segment

2011

Strategic Analysis of European and North American Automotive Human Machine Interface Market -

Part 1 Steering Wheel Controls, Voice Interfaces and Multifunctional Switches

2010

Executive Analysis of European Consumers’ Awareness and Preferences for Usage of

Smartphone Apps Inside and Outside Car

2010

Strategic Analysis of the Impact of Smartphones and Apps on the European and North American

Infotainment Market

2010

Strategic Analysis of the North American Market for Telematics-Enabled Usage-based Insurance

Market

2010 Strategic Analysis of North American Embedded-Connected Hybrid Telematics Market

2010 Strategic Analysis of the European Market for Telematics -enabled Usage-based Insurance

2010 Automotive Telematics Application Stores – Will it Succeed like the Apple App Store Concept

• Location-based

services

• GPS / Navigation

systems

• Infotainment systems

• Wireless

Communication /

Bluetooth

• CV Telematics

• RVD

3G, GPRS. HSDPA, UMTS, WiFi

Completely

Off board

Navigation

Real Time

Dynamic

Traffic

Information

Mobile TV

- DVB H

Audio

& Video

Downloading

Social

Networking

Tools

Parking

Information

&

Reservation

Pedestrian

Navigation

eCall

- Aftermarket

Solution

Games

Variable message signsVariable message signs

Forthcoming

Existing

Telematics, HMI, Connectivity and Navigation Related Existing and

Upcoming Research – 2010 and 2011

26

• Lighting Systems

• HVAC Systems

• Body Electronics

• ECU’s

• Tire pressure

monitoring systems

• Aftermarket

Electronic

Components

Electrical, Electronics, Comfort and Convenience Related Existing

and Upcoming Research

2012 Strategic Update of the Automotive HVAC Market in Europe

2012

Strategic Analysis of Automotive Electronics Market for Electric Vehicles in Europe and North

America

2012

Strategic Analysis of Automotive Interior and Exterior Lighting Systems Market in Europe and

North America

2012 Strategic Analysis of Automotive Seating Systems in Europe and North America

2009 Strategic Analysis of the European Automotive Human Machine Interface Market

2009

Executive Analysis of the Market for Solar Technology Applications in the European Automotive

Industry

2009 Strategic Analysis of the North American Automotive Software Market

2008 European Automotive Original Equipment DAS, ESP, Passive Safety and Rain Sensors Market

2008 Strategic Analysis of European Market for Electric Corner Modules

2008 Strategic Analysis of the European Automotive Advanced Electronic Controller Market

2008 Strategic Analysis of the European Automotive Exterior Lighting Market

2008 Strategic Analysis of the European Automotive Interior Lighting Markets

2008 Strategic Analysis of Automotive Human Machine Interface Systems in North America

2007 European Automotive Original Equipment (OE) Heating Ventilation and Air Conditioning (HVAC)

Systems Markets

2007 European Automotive Original Equipment Position, Pressure and Temperature Sensors Market

2006 Analysis of European Automotive Wiring Harness and Connectors Markets

Forthcoming