Renault, TomTom Have High Expectations for Low-Cost Nav System

PORTO, Portugal – Renault SA and TomTom NV plan to sell 1 million units of the integrated navigation system they developed together between now and the end of 2011, and after one year of exclusivity, Renault expects to see it in competitors’ cars.

The system is offered as a E490 ($651) option or standard on models of the facelifted Clio now going on sale in Europe.

An equivalent nomad system from TomTom would cost about E250-E300 ($333-$400). For less than E250, a customer gets the benefits of integration: a bigger, 5.8-in. (14.7-cm) screen permanently attached to the car; a more robust product with a longer guarantee; and connection to the car’s sensor network, so antilock brake sensors on wheel speed can offer guidance in tunnels.

Integration also means music imported on an MP3 player with USB connection can be controlled by the steering-wheel switches, with titles displayed on the screen.

“All the other manufacturers came to see it at Geneva,” Renault spokesman Philippe Boy says at the press launch of the latest Clio here. “We think most people will take it.”

Boy says 70% of customers indicate they would like a navigation system. However, a price of about E1,200 ($1,600) dissuades most from buying the auto makers’ onboard systems.

Of those who actually buy a GPS device, 80% choose a nomadic system from TomTom, Garmin or their competitors; 10% use systems on their cell phones or PDAs; and only 10% purchase integrated systems.

Renault offers a E1,200 Carminat system, developed with partner Nissan Motor Co. Ltd., in its larger cars, but Boy acknowledges it will be driven out of business by what Renault calls the Carminat TomTom system.

Renault-TomTom system less than E250 more than handheld device.

The more expensive device has a bigger, prettier screen, but lacks the personalization features of the Carminat TomTom system, such as the ability to add information to maps or subscribe to TomTom’s service of locating fixed radar speed traps common in Europe.

The partnership approach lets Renault get an extra E490 million ($653 million) of revenue in the next 2.5 years and gives TomTom extra customers for its services, including free route planning.

Owners can remove a 2GB SD card from the system in the car and connect it to their home computer, linked to the Internet. Once connected, they can update map information, preprogram a route or add photographs that can become an on-the-road slide show.

Renault plans to introduce the system next in the Scenic, Megane and Laguna.

In the Clio, the device is operated with an independent controller. The larger cars will offer a fixed-button system on the central console, as well. Replacements for a lost controller cost about E55 ($73).

“We worked very well together,” Boy says. “We established the goals and worked toward them. It wasn’t a case of taking bids for the lowest price.” TomTom developed the navigation and Renault the integration.

“We invented the market for nomadic navigation,” says Franck Lafarge, TomTom’s program manager for the Renault system. “In five years, we sold 30 million units. It only took us one year from beginning the project with Renault to the introduction.”

Boy says he expects all competitors in Europe to adopt the partnership approach to low-cost navigation systems. Lafarge acknowledges TomTom already is working with other auto makers.