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Intelligent vehicles hit the road

By Chen Limin and Li Fangfang (China Daily)
Updated: 2010-03-12 10:32

As the number of China's car owners increases at an amazing pace, in-vehicle integrated information systems are gaining popularity. PROVIDED TO CHINA DAILY

Onboard integrated information systems are growing in popularity

BEIJING - Lost in his Cadillac SLS on a foggy night on the outskirts of Chengdu, Sichuan province, a driver surnamed Cao desperately needed help finding his way home.

Remembering his car was equipped with GM's OnStar communications system, he quickly pushed a button on his vehicle's rearview mirror and was promptly connected with an operator that offered turn-by-turn navigation to get him out of his predicament.

While this is but one example of how the newly introduced technology in China could work for GM car owners, other domestic carmakers are also adding the technology to their vehicles.

OnStar Corporation is a subsidiary of General Motors that provides subscription-based communications, in-vehicle security, hands free calling, turn-by-turn navigation, and remote diagnostics systems.

In China, GM has been offering similar services for just over two months.

As the number of China's car owners increase at an amazing pace, in-vehicle integrated information systems, known in the industry as vehicle telematics, are growing in popularity.

Telematics includes but is not limited to Global Positioning System (GPS) technology integrated with computers and mobile communications technology in automotive navigation systems.

In addition to GM, more local companies are offering similar services to generate new revenue growth in China by providing niche, in-vehicle services, a move designed to further tap the world's largest auto market.

Last year, Shanghai OnStar, a joint venture between GM subsidiary OnStar, SAIC subsidiary Shanghai Automotive Industry Sales Co Ltd and Shanghai GM that was established in 2007, began rolling out its telematics services to GM's selected models in China after it signed an agreement in June with China Telecom to co-provide a range of wireless in-vehicle safety, security and information services across the country.

Later in December, Toyota launched GBOOK, a similar telematics system, for Lexus and Camry models.

OnStar is currently used by more than 6 million drivers worldwide. The vehicle-based service has been activated by drivers over 253 million times in the decade since its inception.

Jonathan Hyde, general manager of Shanghai OnStar told China Daily that to date, similar services have been used by 1,000 GM customers.

Chinese high-tech telematics service provider, Shenzhen Cheyinwang Technology Co Ltd, also has its sights on tapping the niche market in China.

The company, founded in 2007, currently has 40,000 users of similar services and expects to net 100,000 by the end of the year.

Shen Kangqi, founder and CEO of the company, said nearly 70 percent of the firm's 40,000 users are white-collar workers. He said the company began to turn a profit last year, with revenue of 13 million yuan and gross profit margin of about 30 percent.

Apart from charging yearly fees ranging from 1,899 to 3,699 yuan, the company also generates revenue from commissions charged for directing users to other service providers.

"The yearly fees are likely to decrease in the following years as commissions and advertisements become our main revenue generator," said Shen.

China's telematics market is less than 100 million yuan, said Shen, while the global telematics market will reach $42 billion by 2010, according to IDC, a global market consulting firm.