Michael Sena, Vice president – European Development for Hughes Telematics, spoke really well on the emerging markets of Brazil, India, China and Russia at Telematics Munich 2009 Conference & Exhibition.
There are several individuals sitting in this audience who can deliver exceptional presentations on the state of the telematics markets in the BRIC countries, Phil Magney and David McClure to name just two. I am not planning to give their presentations. I suggest you purchase their excellent reports. I will present a personal perspective on the process of deciding whether or not to invest in developing a telematics solution in an emerging market, rather than in an established one.
In 2004 I received an assignment from a European car manufacturer to assist them in answering the question: Should we develop a telematics system for the Chinese market. This was three years before I made my first visit to, and I had not yet studied the Chinese business climate for ITS applications. My perspective on China was, therefore, based on a reading of the business press and information I have gathered from individuals who have worked or done business in China. At the time, the country had approximately four-and-a-half times the number of people as the United States, but its citizens purchased less than one-fifth the number of cars sold in the US (2.9 million in 2002 in China versus 17.2 million in the US). Sales were projected then to nearly double by 2007, to 4.9 million units, while they should increase only slightly in the US. All estimates made projected that by the end of this century’s first decade, China would still not be a market much larger than Japan. The country is adding motorway pavement at a faster rate than anywhere else in the world, but by 2010 it will still have only approximately double the length of expressways as Germany’s 11,515 km (a country with 4% of the land area and 7% of the population of China), and less than one-half the number of cars as on the German roads. What did I say to the client? Wait until after 2010.
While CO2 emissions are not necessarily a sign of transportation development, it is sign of industrial activity.
Imigrantes Highway in Sao Paolo, Brazil
The business case
The minimum set of data is delivered via a standard 112 call
They can make you wealthy, or they can break both your heart and your bank account.
Telematics in Brazil, Russia, India & China
Telematics in BrazilRussiaIndiaChina<br />Telematics Update Munich<br />November 2009<br />
Telematics in the BRIC Countries<br />Russia<br />China<br />India<br />Brazil<br />The term BRIC is an acronym coined in 2001 in a report by Goldman Sachs. It refers to the emerging economies of Brazil, Russia, India and China, which , in 2001, were viewed as the titans of the future. <br />
In 2008, The People’s Republic of China became the second largest producer of motor vehicles, following Japan and ahead of the United States. Nanjing Auto bought Rover in 2006, and Geely is lining up to buy Volvo from Ford.<br />
India ‘s TaTa Motors purchased Jaguar and Land Rover in the spring of 2008 for $2.9 billion. Ford had bought both companies (Jaguar in 1990 and Land Rover in 2000) for a combined total of $5.23 billion). TaTa has taken loans to keep JLR afloat. <br />
Brazil was the sixth largest car and truck producer in the world in 2008, just behind South Korea and ahead of France. In 2007, the government issued a game changing edict (Res. 245/07): all new cars would have a tracking systems installed by 1 February 2011.<br />
Russia ‘s GAZ was poised to take over control of Opel/Vauxhall from GM when the GM board pulled the plug. This was symbolic of Russia’s current economic crisis. Following explosive growth from 2001 to 2008, the Russian juggernaut has crashed.<br />
Telematics in the BRIC Countries<br />Implementation Criteria<br />4<br />5<br />Car Production Scale<br /> Vehicle Density<br /> Car Industry Sophistication<br /> Electronics Industry Sophistication<br /> Telecommunications Coverage<br /> Emergency Services Coverage<br />Enabling Government Regulations<br /> Map Data Availability<br />3<br />6<br />2<br />7<br />1<br />8<br />
Telematics in the BRIC Countries<br />Implementation Criteria: 5<br />5<br />4<br /> Telecommunications<br />Voice and Data Connectivity in 100% of country<br />Voice and Data in most cities and along major connecting roads<br />Voice and Data in major cities and along major roads <br />Voice only<br />1<br />2<br />3<br />6<br />3<br />4<br />7<br />2<br />8<br />1<br />
Telematics in the BRIC Countries<br />Comparison EU-15<br />4<br />5<br />Production by domestic companies<br /> Vehicle Density<br /> Car Industry Sophistication<br /> Electronics Industry Sophistication<br /> Telecommunications Coverage<br /> Emergency Services Coverage<br />Enabling Government Regulations<br /> Map Data Availability<br />3<br />6<br />7<br />2<br />8<br />1<br />
Telematics in the BRIC Countries<br />Example Russia<br />Production by domestic companies Avtovaz and Gaz 25% of total<br /> Vehicle Density 152/100 inhabitants (2007)<br /> Domestic car industry is in sore need of upgrading<br /> Electronics Industry Sophistication is reasonably good<br /> Telecommunications Coverage is excellent in city regions.<br /> Emergency services must be supplemented with private services<br />There are no enabling laws, but insurance requirements<br /> Map Data Availability for positioning is good, but not for navigation.<br />4<br />5<br />3<br />6<br />7<br />2<br />8<br />1<br />
Telematics in the BRIC Countries<br />A view of the automotive industry in the established markets—North America, EU-15 and Japan.<br /><ul><li> There is no or negative growth.
Cost control and close following of competitors is essential for survival.
Complexity is created to achieve differentiation.</li></li></ul><li>Telematics in the BRIC Countries<br />China, India and Brazil are growing vehicle markets and investments in expanding capacity are justified.<br />Russia, China, India and Brazil are all high risk countries for political, social and governmental reasons.<br />There is even less complexity in the BRICs, especially in China and India compared to EU-15, Japan and North America, so price is more important than features.<br />
Telematics in the BRIC Countries<br />High Demand<br />Potential<br />Low Demand<br />