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Navigation Head Unit Aftermarket to Decline in China, Bad News for Local Suppliers
Date: 19 January 2012

In a recent research report, IMS Research estimated that the aftermarket for navigation head units in China is experiencing its peak at the moment, with the market set to shrink rapidly from 2013 onwards.

IMS Research predicts that shipments of  aftermarket  navigation head units in China will fall from nearly four million units in 2012 to 1.8 million units in 2018. Over the same period market revenues are forecast to shrink by two thirds.

Michael Liu, an automotive analyst in IMS Research’s Shanghai office commented, "There are three main reasons for this market decline. First, the fitment rate of OEM navigation head units is projected to increase quickly in the short term. Second, an increasing number of people in China own smart phones or PNDs, negating the need for an aftermarket head unit. Third, a growing percentage of aftermarket navigation head units are predicted to feature a telematics module in the future. As a result, ‘navigation only’ head units will become increasingly redundant.”

This market decline is bad news for local Chinese suppliers. Unlike the OEM market for navigation head units, the aftermarket is dominated by Chinese suppliers. Coagent and other Tier 1 suppliers such as Rotiss, Foryou, Roadrover and FlyAudio are estimated to account for 60% of this market, with many smaller Chinese local suppliers also serving the market. Market competition is very intense, leading to low prices and even lower profit ratios. Substantial declines in overall market volumes could be very painful to suppliers in the future.

Chinese suppliers would be wise to improve the functionality of their products, particularly as consumers begin to demand connectivity and telematics. Furthermore, expanding export volumes will be one way to offset the shrinking domestic market. However, with strong competition from OEM products and smart phones, aftermarket suppliers have significant challenges ahead.

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Editors Note :

About “In-Car Audio, Infotainment & Driver Information Systems - China – 2011’’ report


This is the 2nd edition of the IMS Research report on the Chinese Market for In-Car Audio, Infotainment & Driver Information/Telematics Systems. This 2011 edition continues to offer IMS Research’s most comprehensive coverage of the light vehicle entertainment, navigation and telematics markets, including forecasts of important trends to 2018. This report should be valuable for market personnels in system suppliers, vehicle manufacturers, semiconductor and software companies in the supply chain.

About IHS Inc. (www.ihs.com)

IHS (NYSE: IHS) is the leading source of information, insight and analytics in critical areas that shape today’s business landscape. Businesses and governments in more than 165 countries around the globe rely on the comprehensive content, expert independent analysis and flexible delivery methods of IHS to make high-impact decisions and develop strategies with speed and confidence. IHS has been in business since 1959 and became a publicly traded company on the New York Stock Exchange in 2005. Headquartered in Englewood, Colorado, USA, IHS employs more than 5,600 people in more than 30 countries around the world.

About IMS Research:

IMS Research is a leading independent supplier of market research and consultancy to the global electronics industry, offering syndicated market studies, custom research and consultancy services. Clients include most of the household names in the industry. IMS Research has offices in Europe, the US, China, Taiwan, South Korea, and Japan. To find out more, contact IMS Research: enquiries@imsresearch.com; T: +44 (0) 1933 402255; http://imsresearch.com