Japanese Market for Car Navigation Systems Increases by 21 Pct. for 2002
September 24, 2002 (TOKYO) -- The Japanese market for car navigation systems is brisk.
A survey conducted by Nikkei Market Access estimates the total shipments of car navigation systems will increase by 21 percent on a year-to-year basis to 2.66 million units in 2002.
The rapid growth of the Japanese automobile output from now on and the fact that almost half of the latest cars on sale are pre-equipped with car navigation systems are developing concerns about a plunge in the growth rate of the car navigation market. On the other hand, working in the network of wireless infrastructures, including mobile phones and car navigation systems, are likely to become an indispensable information device to automobiles. Thus, the car navigation market is expected to continue expanding, with a smaller growth at a 6 percent to 10 percent annual rate, to have output of 3.78 million units -- almost 4 million units -- in 2007.
The Japanese automobile market already has matured in terms of unit sales. Annual sales of new cars, including light cars, have stayed around 4 million to 4.5 million units for several years. According to a survey of Nikkei Market Access, *standard car navigation systems make up 61 percent of the entire output for 2002. It suggests that about 40 percent of new cars should be furnished with car navigation systems on the assumption that sales of automobiles for 2002 are 4 million cars. These numbers bring out an idea that the car navigation market is already just a step from saturation. Actually, some car navigation manufacturers have a pessimistic forecast that future growth rates will turn down to several percent or less.
There is little hope for further prevalence of car navigation systems as long as they remain geared only to ongoing navigation capability. It would be very crucial to develop car navigation systems as an indispensable information device for drivers, on top of further price reductions from now on. Car navigation systems can spread as well as such car amenities as car audio and air conditioning systems.
In the meantime, automobile manufacturers are emphasizing an on-demand information service, telematics. Car navigation systems play a crucial role as a portal for input and output of such services.
Nissan Motor Co., Ltd. took a lead in starting such a service last spring, and Toyota Motor Corp. and Honda Motor Co., Ltd. are following it to introduce the service this autumn.
The content for telematics varies depending on automobile makers, but all the services emphasize compatibility with mobile phones. With this compatibility, car navigation systems will become important not only in obtaining information, but also in enabling drivers to call without holding a phone. Mobile phones are indispensable in the latest lifestyles of people. However, it is illegal for drivers in Japan to use mobile phones when they are driving cars.
In addition, further development of communication infrastructure would enable low-priced network services, and then enhance the importance of car navigation systems as an information terminal.
*1 standard car navigation systems are those pre-installed in cars on assembly lines, and those offered as an option by associated car dealers. On the other hand, those purchased privately by drivers at auto components stores or large-scale retailers of home electronic devices and attached to cars afterwards are categorized into marketed car navigation systems.
