Wednesday 17th August 2005

Satnav costs too much: report

Carmakers need to compete with standalone devices

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Satnav costs too much

Cut the price of satnav, is the call from an automotive industry consultancy.

According to telematics specialist SBD, navigation systems have moved from being expensive niche products to mass-market items stocked on supermarket shelves. As a result, sales have soared and SBD predicted that six million systems will be sold this year.

Change of approach required

A new report from SBD points out that car manufacturers need to change their approach if they are to increase the number of vehicles sold with embedded, factory-fitted satellite navigation units. The report said that consumers understand and are familiar with electronic devices and that car makers are falling behind. In effect, they need to lower their prices to compete with standalone equipment, and make sure that dealers understand the in-car systems and know how to sell them.

SBD’s research shows that at present only around 10 per cent of new cars in Europe include satnav. Few buy it because it's expensive and it isn't available on most cars. At the present rate, SBD estimated that fitment rates might hit 12 per cent next year.

It contrasted this with the performance of portable systems, which have doubled sales levels in 2004-2005. It found that rapid growth has been fuelled by the success of new personal navigation devices (PNDs), which it said "are smartly designed, simple to use and competitively priced".

Add satnav, sell more

SBD's David McClure said: "Manufacturers have an opportunity to turn increased customer awareness into increased sales of embedded systems, but it requires a fresh approach, both in the way they position the equipment within their model ranges and the way it is sold to the customer on the showroom floor."

SBD's report recommended that simple turn-by-turn navigation systems be integrated as standard in most cars, and that that car makers improve training for car dealers on the advantages and benefits of embedded navigation equipment.

"If car makers are willing to adopt more cohesive marketing and technical strategies, we think there is an opportunity for fitment rates on new cars to rise as high as 30 per cent by 2008-2009", said McClure.

Cutting prices and explaining products to customers hardly sounds radical -- but sometimes big companies need the obvious spelt out. However, SBD didn't say who commissioned the report...

[LayZ]

Well Vx have caught on giving a tomtom Go away with new Corsa SXi. These things are so good (just spent the week in Germany with tomtom 5 on a pocketpc) I don't see why anyone would pay 2 grand of their own money to spec a factory BMW (or whatever) system. There is way too much profit in this particular option.