As the United States takes the early lead in the Connected Car segment, other large markets in the world are laying down their own plans to expedite the growth in the number of cars equipped with Internet connectivity. Just south to United States, Brazil and Mexico, the two largest countries in the Latin American region, are expecting over 1.6 million subscriptions in total for car telematics services by 2020, says an analysis from Frost & Sullivan, a leading growth partnership company.
According to Frost's 'Strategic Analysis of the Automotive Connected Services Market in Brazil and Mexico', Brazil will be seeing the number of telematics service subscriptions increasing from 4,800 last year to 1.3 million in 2020 with 26-28% of new cars sold in 2020 featuring connected services. For Mexico, the subscriptions are expected to grow from 2000 in 2013 to 330,000 in 2020 with the share of vehicles featuring connected services hitting 23-25% in 2020.
Frost said that these markets are already strong in the automotive aftermarket services, particularly for vehicle tracking, monitoring and immobilization solutions. With the new range of services that can now be made available on connected cars, ranging from navigation facilitation, internet browsing, music streaming, social media access and car telematics information, auto-makers are expected to work closely with service providers to develop in-built connectivity in cars that allows these services to be accessible on new car models.
The report also highlighted a number of issues in both countries that can pose a challenge to the rapid deployment of connected car services. In Brazil, price sensitivity among car buyers and the fact that vehicle insurance purchase and anti-theft equipment installation are currently not compulsory are some of the factors that could temporarily hamper the demand for connected car services in the short run.
“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. Likewise, the market in Brazil will expand as more vehicle OEMs venture towards offering telematics services."
"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). 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."
- Yeswant Abhimanyu, Automotive & Transportation Industry Analyst, Frost & Sullivan
