In the last 4 years, the number of OEMs offering telematics services in China has exploded, surpassing mature markets such as Europe and USA where telematics took 15 years to become a commonly offered feature. In parallel to this, the number of companies scrambling to support OEMs with their telematics plans has also expanded. But is this intense level of competition good or bad for the industry?
Typically, competition in any market is perceived to be a positive sign of a healthy industry, leading to lower costs and greater innovation. In China, competition within the telematics industry has grown at a much faster pace compared to other markets, as service providers, content providers and hardware suppliers all battle for a slice of the telematics pie. The problem is that the pie remains relatively small.
As shown below, the number of players with contracts to support OE telematics services in China has now surpassed 70, far exceeding the number of players in Europe and the USA.
This is despite the fact that 2012 sales figures for connected cars in China are significantly smaller than the USA and Europe. The market in China will surely grow, but the current fragmentation within the value chain may hold the industry back from growing as the relatively small revenues are spread thinly across a large group of players.
A first step to addressing this problem is to understand who the key players are within the telematics value chain and what capabilities they can provide to vehicle manufacturers. For this reason SBD have just released the first comprehensive value chain database for telematics in China, outlining all of the key players, explaining what they do and even providing contact information. Whether you're looking for fuel information, App developers or TCU suppliers, this database provides an easy-to-use overview of who you should be contacting.
Understanding who does what in a complex market like China is a key step to choosing the right partners and launching successful services.
SBD's China Telematics Value Chain Database includes 150 companies and allows users to easily identify the top players. In addition to providing contact information for most of the companies, this tool allows users to see which of them have experience of supplying various services and hardware to OEMs.
Victor Zhang joined SBD in 2011. His research focuses on telematics and security in China. Victor monitors the Chinese market closely for SBD.
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