Demand for in-car navi systems to grow

Demand for car navigation systems in Malaysia is expected to be 49.2% higher in 2011 compared to the estimated 104,400 units sold this year. According to Masaki Honda, Senior Consultant at Frost & Sullivan’s Automotive & Transportation Practice, Asia Pacific.

This growth is due to consumer awareness on the benefits of such navigation systems which make use of the Global Positioning Satellite (GPS) network locate and track the vehicle’s position.

“The market is expected to expand dramatically from 2013 due to the increase of consumer awareness on the benefits of the device via campaign efforts by personal navigation devices (PND) distributors,” he added, noting that even though the market is still small, its growth has been very fast in the past 2 years.

He noted that Proton plans to install embedded navigation units to its Exora and Persona high-line versions in 2013 and expects to see 90% of Proton’s vehicles equipped with navigation systems by 2015. That can popularise the devices very quickly in the same way that automatic transmissions became more popular when Proton began to offer them in its cars from 1988.

Due to system integration complexity, high pricing and also warranty issues relating to integrated navigation systems (the type which is installed within the dashboard), the car navigation market here is still dominated by PNDs that typically mount on the windscreen or on top of the dashboard and are powered through the cigarette lighter socket.
 

 

Mr. Honda however noted that almost all the luxury car models have embedded systems which are mainly integrated with telematics, but due to the reliability of the map and low awareness of the function, most car owners opted not to activate the telematics function.

New analysis from Frost & Sullivan’s Strategic Analysis of ASEAN Market for Navigation Systems finds that the car navigation systems market in four ASEAN countries – Indonesia, Malaysia, Singapore and Thailand – is expected to grow at a compound annual growth rate (CAGR) of 33.5% (2009-2015) to reach 1.7 million units in 2015. Malaysia’s car navigation systems market is expected to grow at a faster CAGR of 49.6% (2009-2015) to reach 781,100 units in 2015.

Mr. Honda added that PNDs will remain the most popular car navigation system, accounting for more than 95% of the total navigation market in the four ASEAN countries due to affordable pricing and high functionality.
 

“New features such as 3D views and junction views are becoming standard features in PNDs,” he said, adding that PNDs also incorporates non-navigation features such as playing audio and video files, receiving radio broadcasts and Bluetooth connectivity, extending their appeal and functionality. “Navigation device providers are promoting car navigation systems, especially PNDs, through media and exhibitions, and consumers are becoming more aware of the convenience navigation systems in the cars.”

Navigation devices are very useful when in another city or country where the driver is unfamiliar with the roads, eg for Malaysians driving into Singapore on holiday

Mr. Honda also said that currently, PNDs dominate the market in Southeast Asia due to  affordable prices. These prices are expected to reduce further due to reducing component prices such as microprocessor chips, he added. He also said that original equipment manufacturers are expected to increase production of models with embedded navigation systems but these will still remain niche, mainly due to high prices. 

“With factory-installed embedded systems costing 30 to 50 times more than PNDs, vehicle manufacturers tend to shy away from providing them as standard features, resulting in a penetration rate of just 1.8% in the total new car population in 2009,” Mr. Honda said.

He noted that currently, navigation systems are still considered as “nice-to-have” items by consumers as they do not need navigation systems when they drive roads which they know through driving along them daily. However, real time information such as locations of toll plazas, traffic jams, accidents, available parking spaces, service stations, etc will change navigation systems to “must-have” items as they use navigation systems even on the road which they know, he added.

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