The urban per capita area of paved roads only approximates 10.6 square meters in China, far lagging behind foreign countries which boast 15-20 square meters of paved road per capita. Meantime, the urban vehicle ownership is ballooning at a growth rate of 15%, while the growth rate of road areas only reaches around 3%. Therefore, intelligent transportation system (ITS) has become an important means to improve the efficiency of road use and reduce the imbalance between traffic supply and demand.
In accordance with the planning of Science & Technology Division of the Ministry of Transport of P.R.C., China will realize the sensing and monitoring of expressways, national and provincial arterial highways, important sections, large bridges, vehicle areas and transportation conditions, and the drivers will be able to obtain the required travel plans and real-time travel information at any time and any location in their familiar way by 2015, so as to enhance the attractiveness and sharing power of public transport, and ease urban congestion. Moreover, China will carry out the monitoring of dangerous goods transport vehicles, vessels, coaches, buses, taxies and rail traffic through the whole journey.
The data on the orders of the industry in H1 2012 suggested that the ITS industry was still flourishing. In spite of economic slowdown, the local governments continued to advance project construction in BT mode, showing that the demand for ITS from local governments did not shrink.
In order to stop the economic downward trend, China National Development and Reform Commission announced its approval of 25 urban rail transit planning and projects, 13 highway construction projects, 10 municipal projects and 7 port & waterway projects? in September 2012, with total investment of more than RMB 1 trillion. The investment in these projects will undoubtedly boost the development of ITS industry in China.
Along with the expanding investment in ITS industry and the accelerating industry growth, new companies rush into the market.
There are currently three major types of enterprises in market competition. The first type of them is represented by Digital China and ZTE that march into the ITS industry with the concept of smart city. In early July 2012, the Municipal Government of Ningbo and ZTE Corporation signed a cooperation framework agreement to build ITS.
The second type covers security companies like Hikvision and Dahua Technology which tap into the ITS area through the combined tender of urban security and ITS construction. In recent years, as the end-users of security monitoring and urban ITS are public security and traffic police departments, the traffic monitoring and electronic police are also equipped with security administration function, which provides an opportunity for security companies to enter the ITS industry.
The third type includes such system integrators as Enjoyor and E-Hualu. These firms are in a dominant position by possessing strong problem-solving skills in ITS market and complete marketing channels, and maintaining sound partnership with relevant government departments. An integrator like E-Hualu is extending to the upstream products to lift its gross margin.
According to the development plan, China will make more effort in urban ITS construction. It will promote the construction of traffic information service platform in around 50 major cities to provide traffic information inquiry and traffic guidance service, develop intelligent signal control system in more than 200 cities to shape intelligent traffic command system, and carry forward regional scheduling of public transport and construction of related systems in over 100 large cities to strengthen the construction and application of electronic ticket service.
Additionally, China ITS (Holdings) Co., Ltd. and Anhui Wantong Technology Co., Ltd. that previously engaged in intercity ITS also shift their business focus to urban ITS field, which shows that the urban ITS industry becomes more attractive to enterprises due to its rapid development.
This report provides the industry executives with strategically significantcompetitor information, analysis, insight and projection on thecompetitive pattern and key companies in the industry, crucial to thedevelopment and implementation of effective business, marketing andR&D programs.
Both primary and secondary research methodologies were used in preparing this study. Initially, a comprehensive and exhaustive search of the literature on this industry was conducted. These sources included related books and journals, trade literature, marketing literature, other product/promotional literature, annual reports, security analyst reports, and other publications. Subsequently, telephone interviews or email correspondence was conducted with marketing executives etc. Other sources included related magazines, academics, and consulting companies.
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