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SAN FRANCISCO–The worldwide vehicle navigation market, with different cultures and consumer preferences, will begin to shape and mature in the next few years, speakers told attendees at the 1996 Etak User Group meeting here.

In Japan, where vehicle navigation sales will reach 750,000 in 1995, several important developments are occurring, said Kenji Kamiya, Etak Inc.’s director of Asia/Pacific business development. "Many experts understate why it is important to develop [vehicle navigation] strategies. In Japan, map displays and GPS-based systems are important," he said. "In Europe, particularly in Germany, turn-by-turn [navigation] and voice are important [to consumers]. In the United States, satellite-based security systems such as the Lincoln Rescu and GM’s Onstar and others [are taking off]."

Before 1991, when aftermarket sales exploded in Japan, automakers such as Honda, Toyota and Nissan sold 4,500 to 8,000 vehicle navigation units each year. However, as aftermarket systems kept doubling the market size each year as younger people bought systems, original equipment manufacturer (OEM) sales decreased, Kamiya said. "However, last year, OEMs achieved a 30 percent share of the market in Japan. This year they hope to get 40 percent," he said. "OEM manufacturers hope they can capture 100 percent of this market in the next few years. Whether that new product is handheld or portable remains to been seen. It was a bubble economy in Japan, then it was rapture."

About 400 of the Japanese vehicle navigation manufacturers belong to the Navigation Researchers Systems Association (NRA), Kamiya said. "Some are fielding NRA-proprietary format units and some a hybrid of the system," he said. "Japan has a block-oriented street scheme. Streets are unmarked there and it is not easy to find out where you are. In the United States, streets are designated very well. In the United States, driving is a daily routine. In Japan, people use public transportation every day. They use their car’s vehicle navigation units on weekends."

Life-threatening situations in America are much higher than in Japan. "An Electronics Industry Association survey indicated that security is the most important feature for location-based services [in the United States]," Kamiya said.

The Pacific Rim presents the greatest opportunity for companies wishing to develop car navigation markets because of the booming economy, Kamiya said.

"Thailand is ahead of South Korea, a market we thought would be the largest in Asia," he said. "Thailand has invested $30 million in its digital map data [infrastructure]. It also has the third-largest imports of the high-end Mercedes Benz vehicles [a vehicle navigation target]–and the cost per vehicle is three times that of an import to the United States."

However, Kamiya said that national security issues and trade conflicts are barriers to many markets in the Pacific Rim. "It is very difficult to go into one of those countries and try to set up a digital map infrastructure [because of national security issues]. The best way to get into those countries is to form joint ventures and get business partners," he said. "However, the need for intelligent transportation system products in those countries because of congestion is tremendous."

Overall, the U.S. vehicle navigation market is five to six years behind Japan’s, Kamiya said. "Almost every year in Japan, the market doubled. When the market goes above 1 million in unit sales each year, we believe, based on other electronics unit sales, that there will be a saturation limit," he said.

Future Japanese innovations include more precise mapping detail. "Zanavi is coming out with a bird’s view flying visual map. There should be turn-by-turn systems coming on and maybe hybrid systems," Kamiya added.

…European Vehicle Navigation Market Growing

Every European automobile manufacturer views vehicle navigation as a strong competitive advantage, said Alain De Taeye, Tele Atlas’ information technology and production general manager.

"It is such an important element [to this market] that they are pushing turn-by-turn guidance. Cities in Europe–Brussels, Berlin, Rome–all have complex street patterns," he said.

"If you make four left turns on a U.S. street, chances are you will be back at the same spot. In Europe, you will be lost. Some [manufacturers] believe that the vehicle navigation screen is too small and dangerous to look at. They want turn-by-turn capability and a voice output."

Overall, the market, with 50,000 units on the road, is not impressive, De Taeye said. He added that only represents a market that has been in existence about a year and a half. Tele Atlas and its largest competitor, Navtech/Europe, are continuing to complete map data bases in each country to increase the market, he said.

"We believe there will be huge growth in three to five years. We [predict] that by 2000, there will be 1.5 million installations," De Taeye said. "This market is driven purely by OEMs. But after-market sales will grow. You will see not just higher-end cars having vehicle navigation as an expensive gadget, but lower-end cars in Europe such as the Volkswagen Passat."

The major vehicle navigation players include Bosch-Blaupunkt, Philips, Alpine and Magnetti Marelli, De Taeye said. In addition, the largest map providers are Tele Atlas with 36,000 installations and Navtech/EGT with 12,000 to 13,000 installations, he said.

The future European vehicle navigation market will include multimedia type of units and connection to wireless communication, improved turn-by-turn guidance, icon displays and optional LCD displays.

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VEHICLE NAVIGATION IN JAPAN:

Sales each year

• 1991–35,000 units
• 1992–75,000 units
• 1993–150,000 units
• 1994–300,000 units
• 1995–500,000 units
• 1996–750,000 units (est)

Source: Etak Inc.

THE EUROPEAN VEHICLE NAVIGATION MARKET

Units Have Been Installed in:

• Mercedes S-series
• BMW 7-series
• Audi AS-series
• Volkswagen Passat
• Ford Mondeo (this month to be introduced at Paris Motor Show)