Global Navigation Systems Typically are found in mid- to high-end vehicles, but MiTAC International Corp. means to change that by making the technology more affordable for moderately priced cars, a high-ranking executive says.
“We need a low-price (navigation) solution,” Justine Liv, senior manager of global brand marketing and investor relations, tells Ward's at the AutoTronics trade show in Taipei, Taiwan.
“In emerging countries like India, China, Russia and Eastern Europe, there's a huge potential for low-cost car navigation systems. It's a great opportunity, and nobody has tapped it yet.”
Taipei-based MiTAC, which specializes in personal-navigation devices, is hoping to leverage its expertise to provide navigation systems for manufacturers of inexpensive cars, such as those in India and China.
The company currently is approaching several auto makers, Liv says.
Key to MiTAC's plans is the development of an affordable navigation system that can be installed in some of the world's lowest-priced vehicles, such as Tata Motors Ltd.'s new $2,500 Nano car.
Liv says MiTAC, one of the largest producers of both hardware and software navigation solutions, is perfectly positioned to supply the low-end car market.
This can be done by leveraging its economies of scale and manufacturing capabilities in low-wage countries in order to bring in a vehicle navigation system at a profitable price.
“We have a very strong capability to provide a low-cost device,” Liv says. “If you look at traditional car electronic makers, they're not able to provide a low-cost model like we can.”
But there are drawbacks. Before entering an emerging market, Liv says MiTAC must secure accurate maps, which often only cover large urban areas.
In Russia and China, “a lot of the area is not covered yet,” she says. “But I think that's good enough for emerging markets, because you only sell the products in the big cities.”
Liv says a low-cost in-car navigation system likely would be similar to the small, portable devices the company already makes.
Unlike navigation devices in high-end vehicles, which often interface with other electronic systems such as audio components, a low-cost solution would have to operate independently. “(We'll) combine the cost structures of the portable navigation device with some technology to connect to the car itself,” Liv says, noting the device likely would connect to the car via a dash-mounted holder.
Interest in low-end navigation systems is not relegated to emerging markets, says Dominique Bonte, principal analyst-telematics and navigation, at New York-based technology research-firm ABI Research.
“In the U.S., there seems to be a trend to make built-in, factory-installed navigation systems cheaper,” Bonte says, noting there are two ways auto makers are looking to bring down the price of the technology.
“There have been a few partnerships between personal-navigation device vendors and car manufacturers to integrate (the technology) into the car environment,” he says. “A second way is car manufacturers are starting to look at standardized systems.”
These are cheaper than the closed systems traditionally found in vehicles today, Bonte says. As such, they will enable greater penetration of vehicle- navigation systems.
“We're forecasting factory-installed navigations systems will continue to grow,” he says. “By 2013, more than 30% of all new cars will ship with built-in navigation, compared to 15% now.”
Bonte says MiTAC's low-cost initiative has merit, especially in China where such systems are considered a status symbol.
The Chinese “are prepared to spend money on those systems,” he says. “Probably more than we would in the U.S. and Europe.”
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