Frost & Sullivan: Explosion of OEM's Investments in Automotive Connected Services in Brazil and Mexico

(Photo: http://photos.prnewswire.com/prnh/20140811/135074)

New analysis from Frost & Sullivan, Strategic Analysis of the Automotive Connected Services Market in Brazil and Mexico, finds that the total number of telematics service subscribers in Brazil will go up from 4,800 in 2013 to nearly 1,300,000 in 2020. Mexico's telematics subscriber base, on the other hand, will grow from 2,000 in 2013 to approximately 330,000 in 2020. By the end of the forecast period, automotive connected services is expected to penetrate between 26 to 28 percent of new cars sales in Brazil and approximately 23 to 25 percent of new cars sold in Mexico. The study covers automotive connected services offered by vehicle OEMs and independent aftermarket solutions.

"In Mexico, the provision of automotive connected services in vehicles from General Motors, and the expected introduction of these services by other premium vehicle OEMs, will propel the market," said Frost & Sullivan Automotive & Transportation Industry Analyst Yeswant Abhimanyu. "Likewise, the market in Brazil will expand as more vehicle OEMs venture towards offering telematics services."

However, the high cost of vehicles in markets such as Brazil could dampen sales volumes, considering that over 60 percent of cars sold are from the price-sensitive A- and B- segments. Also, since purchasing vehicle insurance is not mandatory in Brazil, insurance-coupled telematics services might not find much acceptance among cost-conscious customers. As customers begin to realize the value of insurance in the event of car theft and other situations, insurance-coupled telematics offerings will grow in popularity.

The continued delay in the implementation of the Conselho Nacional de Transito (CONTRAN) 245 mandate that requires the installation of anti-theft equipment in all new vehicles in Brazil is also understood to be slowing market development. In light of the different possible scenarios, vehicle OEMs and other participants along the value chain are unsure whether to introduce telematics services just yet. This, along with a debate regarding the right mix of automotive connected services to offer customers, is slowing market introduction and current potential.

"Partnerships among vehicle OEMs and SPs are expected to pave the way for the advancement of the automotive connected services market in Brazil. While vehicle OEMs can take advantage of the bandwidth and scope that SVT and immobilization service providers have in the country, the SPs can move towards complete, high-end telematics service providers (TSPs)," noted Abhimanyu. "Vehicle OEMs might even extend their partnerships to hardware manufacturers and other value chain participants, using innovation and flexibility as key decision-making criteria to choose appropriate partners."

SPs across Mexico could also consider partnering with vehicle OEMs to broaden their service offerings and thereby attract more customers. Focus should lie in providing advanced telematics services such as turn-by-turn navigation and automatic crash response.

Strategic Analysis of the Automotive Connected Services Market in Brazil and Mexico is part of the Automotive & Transportation (http://www.automotive.frost.com) Growth Partnership Service program. A complementing study, Voice of the Consumer (End Consumers – Car Owners) that looks at the consumer's willingness to pay for connected services, the features of interest, and the effects of the smartphones, is also in progress.

For more information on this and related studies, please email Francesca Valente, Corporate Communications, at [email protected].

About Frost & Sullivan

Frost & Sullivan, the Growth Partnership Company, works in collaboration with clients to leverage visionary innovation that addresses the global challenges and related growth opportunities that will make or break today's market participants.

Our "Growth Partnership" supports clients by addressing these opportunities and incorporating two key elements driving visionary innovation: The Integrated Value Proposition and The Partnership Infrastructure.

For more than 50 years, we have been developing growth strategies for the global 1000, emerging businesses, the public sector and the investment community. Is your organization prepared for the next profound wave of industry convergence, disruptive technologies, increasing competitive intensity, Mega Trends, breakthrough best practices, changing customer dynamics and emerging economies?

Contact Us:     Start the discussion

Join Us:           Join our community

Subscribe:       Newsletter on "the next big thing"

Register:         Gain access to visionary innovation

Strategic Analysis of the Automotive Connected Services Market in Brazil and Mexico
NB81-18

Contact:
Francesca Valente
Corporate Communications – Latin America
P: +54-11-4777-5300
F: +54-11-4777-5300
E: [email protected]

http://www.frost.com