Frost&Sullivan analyst talks about Telematics in China:
China, the largest automobile producer in the world, has also grown into a large automobile consumer, with annual automobile consumption growth of over 7 percent.
Telecom operators, software developers and content providers will play an increasingly important role in the development of a telematics market in China, although the market will initially be led by automobile manufacturers.
Traffic information service providers are emerging in China. Companies such as NavInfo Co. Ltd., AutoNavi Software Co. Ltd. and China TransInfo Technology Corp. (CTFO) are exploring the market by either cooperating with automobile manufacturers or seeking partnerships with telecom operators.
NavInfo and AutoNavi have so far cooperated with Toyota to provide the latter with navigation maps and real-time traffic data for its telematics services in Beijing, Shanghai, Guangzhou and Shenzhen, while CTFO is talking with China Telecom and China Unicom over the provision of real-time traffic data.
Nevertheless, the market is in its early stages, with the concept of telematics still new to Chinese companies.
During the preliminary stages of China’s telematics market development, there will be competition between automobile manufacturers and telecom operators over control of the industry chain. However, the two parties will eventually negotiate a reasonable split of revenues and control, as each party is essential to the development of a telematics market.