Market Trends of Automotive Navigation System Industry
Aftermarket Segment to Gain Traction during the Forecast Period
Apart from the factory fitment of the navigation system from the original equipment manufacturer's end, the fitment rate from the aftermarket channels is also likely to witness considerable growth during the forecast period.
Growth in the e-commerce industry worldwide has resulted in increased pressure on e-commerce companies to deliver products to customers on time. Due to this requirement, many e-commerce companies are forming alliances with existing logistic providers for business-to-customer (B2C) deliveries. To cater to the demand, logistics companies have been expanding their services by entering more vehicles into service. These vehicles are primarily equipped with satellite navigation systems to reach customers as per schedule. Furthermore, e-commerce companies have introduced offers like 'anywhere delivery,' 'same day delivery,’ and even 'same hour delivery’ to attract a larger number of consumers.
• The number of e-commerce users in the United States reached 240.72 million units in 2022 compared to 223.76 million units in 2021, showcasing a Y-o-Y growth of 7.5%.
• According to the India Brand Equity Foundation (IBEF), India gained 125 million shoppers between 2019 and 2022, with another 80 million expected by the end of 2025.
Most vehicles rolled out in recent years have been equipped with navigation systems that assist drivers in reaching their destinations while also entertaining their occupants. Older cars that were not originally manufactured with a factory-fitted navigation system can have aftermarket navigation systems fitted to their dashboards, or drivers can even use portable navigation systems. Moreover, customers looking to integrate advanced navigation systems that are not equipped in vehicle models offered by OEMs are also increasingly preferring to avail themselves of aftermarket sales channels for purchasing these products. Therefore, consumers' preference toward availing electric vehicles owing to an aggressive government push toward reducing carbon emissions is leading to the expansion of the aftermarket sales channel.
• According to the International Energy Agency (IEA), battery electric vehicle sales worldwide touched 7.3 million units in 2022 compared to 4.6 million units in 2021, representing a Y-o-Y growth of 58.6%.
With various navigation system suppliers listing their products on e-commerce platforms, the aftermarket segment of the market is expected to register surging growth during the forecast period.
Europe Leading the Automotive Navigation System Market
In recent years, the European automotive industry has emerged as a major exporter of automobiles worldwide, and European vehicle owners consider navigation a key safety measure in vehicles. Government authorities across regional countries are aiming to ensure that all cars must be connected with GPS systems over the coming years. The European Committee for Standardization (CEN) and the European Telecommunications Standards Institute (ETSI) recently issued an initial set of standards prescribed for cooperative intelligent transport systems.
The region is actively witnessing a surge in sales. It also has a notable presence of automotive OEMs like Renault, Mitsubishi Electric Corporation, Denso, Bosch, Nissan, Garmin, Hyundai, and Toyota. Safety and security service is the largest contributor to the automotive industry across the European market, with navigation considered a crucial safety measure for vehicles.
• According to the Germany Federal Motor Vehicle Office (KBA), in October 2023, new passenger car registrations in the country increased by 4.9% Y-o-Y to 218,959 units. During the first ten months of 2023, 2,257,025 new cars were registered (up 13.5% Y-o-Y).
• According to the Society of Motor Manufacturers and Traders (SMMT), in November 2023, passenger vehicle sales in the United Kingdom increased by 9.5% to 156,525 units compared to October 2023. Furthermore, passenger car sales in the country touched 1.7 million units in the first 11 months of 2023, showcasing a Y-o-Y growth of 18.6% compared to the same period in 2022.
Automakers and tier-1 suppliers across European countries are also consistently testing the strength of navigation platform providers in data-based solutions to develop digital services in fields such as mobility management and navigation technology. Various automakers in Europe are actively engaged in offering advanced navigation solutions to customers to enhance their driving experience and gain a competitive edge in the ecosystem. For instance,
• In May 2023, Lynk & Co., a China-based car manufacturer, announced the adoption of an innovative what3words navigation system for its European fleet, providing customers with an alternative to traditional systems such as Google Maps. The what3words' novel system has divided the world into 57 trillion 3 m squares, and each square has been given a unique combination of three words, forming its what3words address.
Growing demand for electric vehicles, high penetration of wireless communication technology, and increasing availability of advanced telecom infrastructure are among the major factors driving the market for autonomous cars and dependent navigation systems across European countries.
