Issue: Oct 2011


Telematics Valley´s Conference September 6-7th first in Europe to focus on Chinese Telematics



by Steve Barclay

The main theme for Telematics Valley’s Internationl Conference 2011 in Gothenburg was, ”How to do Telematics Business with China ”. This proved to be very interesting for the telematics industry and attracted100 attendees and the chinese theme was the first day of the conference.

To give the attendees the full picture, speakers representing Guangzhou Motors, SAIC, China Telecom, Autonavi and Long March Partners Development were invited to speak. Also European companies that are doing business in China shared their experiences. As IPR in China is a critical question the attendees were updated on the situation.

”We have always the ambition in our conferences to deliver more insight into a few carefully selected topics than offer a broad and big event”, says Jan Unander, Executive Director of Telematics Valley. ”For us it is important to give the attendees more time to deepen their knowledge as well as to build long term relations. As we are a non-profit organisation our focus is not on the commercial aspects of the conferences and therefore we do not compromise on quality.”

”For us as an organisation and our members representative, an important step was taken during the conference when Telematics Valley signed a MoU with SVCTA (Shanghai Vehicle Connectivity and Telematics Alliance, a part of STEA, Shanghai Transportation Electronics Alliance)” Jan Unander says.

”We always measure how the attendees perceive the conference and are very pleased to note that our more focused approach pays of when compared to other conferences in the Telematics area as 40% rate it better than other conferences.”

The conference made it clear that China has an astonishing rapid consumer acceptance of mobile services and applications and the environment for chinese developers allows a lot more freedom, also for apps used in vehicles as less focus on drivers distraction applies .

Toyota’s G-Book and GM’s On Star are solutions copy pasted from the western world that were launched in 2009 in China. Since then chinese solutions like inkaNet (Intelligent Network Traffic System) from SAIC and SGM’s eMotion has been introduced. An interesting function in inkaNet is the Walkie Talkie functionality that enables the inkaNet community to be in direct contact with each other.

We can also expect a rapid evolution within telematics for commercial vehicles. As an example, pushed by the Ministry of Transport’s program “The fourth energy-saving & emission-reducing demonstration projects”, the bus manufacturer Higer have developed a system for e.g. safe driving, fuel consumption reduction and vehicle maintenance.

The ECO-system looks the same but in China MNO’s do also take on the role as a participator in providing applications to the market, a role that is disputed in other geographical regions as climbing too high on the value chain and compete with the customers.

China faces a huge challenge as the number of cars per 1,000 inhabitants has increased from 19 in year 2000 to 58 in 2010. In Europe the figure is just below 500 cars per 1,000 so there is a long way to go. However, compared to Europes 250+ million cars China still have only reached approx a third (80 million cars) of that. But with a Chinese population of more than 3 times of Europe’s and a road network half of the stretch of Europe’s we can foresee an environmental challenge as the roads become more and more congested.

Congestion highlights environmental issues but infotainment will also be cruical to address as people spend more time in their cars . Infotainment is the key driver of consumer telematics in China in contrast to US where safety and security are key areas and in Europe, navigation and traffic information are considered important.

A huge difference between China and Europe is the OEMs business models. In Europe 70% of the profit is from the aftermarket business (spares and labor) generated through the branded workshops. In China still most workshops are not exclusively branded and also the fact that the demand for cars exceeds the production, the majority of the profit comes from selling the vehicles.

In Europe OEMs have realized that their goldmine is the internal business case i.e. see to that cost for warranty and service contracts is kept to a minimum by remotely receving information from the diqgnostic systems in the vehicles. This applies for cars as well as commercial vehicles.

This fact will have a big impact on how Chinese OEMs will handle their after market strategies in the future and we might see a change as the governmental advise is to reduce number of OEMs to follow the overall Chinese growth strategy.

The Independent Product – Joint Venture Plants – Independent Innovation – From Big to Strong

” After this conference and our MoU we within Telematics Valley and SVCTA will build up a mutual trust and share experiences to the benefit of both organsations members. To create business relations for the members we have to see the common denominators but also be aware of the large differences in consumer behavour as well as the industrial structure and business models” says Jan Unander.

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