Car networking market will exceed 150 billion yuan

Recently, the Analysys think-tank released a report predicting that by 2015, China's auto production plan will reach 25 million vehicles. The penetration rate of car networking applications and services may be close to 10%, and the market size is expected to exceed 150 billion yuan. The horn of listed companies entering the car network has been sounded, and has become the “vanguard” in the tide of car networking acquisition.

Forrester Consulting in the United States pointed out in its report entitled "Connected Cars - Preparing for the Next-Generation Computing Environment," pointing out that there are a variety of network connections, smart sensors, forceful cloud computing technologies, and lasting technologies. Innovation is driving the transformation of the automotive industry.

According to the research company SBD, the global connected car market, as a new industry, will grow into a market with a share of nearly US$53 billion in 2018. Funds are gathering from all directions to the connected car industry. From automakers, technology companies, startups, venture capitalists to telecom companies, all parties are moving into what Forrester calls "an unprecedented fourth-generation computing environment."

In fact, the above scene is also being staged in the Chinese market. At the seminar on the development of China's branded automobiles held on July 15 this year, Minister Miao Xie of the Ministry of Industry and Information Technology said when he talked about the development direction of the automotive industry: “We must pay great attention to the revolution brought by the Internet to the automotive industry.” China's car networking industry technology Fang Zhu, Secretary-General of the Innovation Strategic Alliance, reported to the reporter that China is the world's largest auto market and the world's largest mobile internet market. The integration of the two makes China a fertile ground for the Internet of Vehicles.

Listed companies have already sounded the horn to enter the car network. For example, NavInfo has already begun to "deeply plow" the hottest map products in the car networking industry. According to the company's vice president, Cheng Peng, the user has proposed new requirements for the development of the car network and the on-board system. There are three main functions that the user needs to optimize or add: The travel service includes navigation and positioning, and the surrounding search is accurate. Can provide congestion diversion and recommendation services; living services include drunk driving, maintenance reminders, providing discounted preferential information, entertainment information, disaster warning, multi-party calls, and videophone functions; security services include comprehensive vehicle condition detection and pressing Regular driving mileage reports, burglar alarms, etc.

It is worth noting that those listed companies with sufficient funds have become the "vanguards" in the trend of the acquisition of car networking. For instance, Rongzhi Lian acquired a 75% stake in Carnet at a price of 562.5 million yuan in early June of this year. It is estimated that the net profit after simulation of consolidated statements in 2013 will reach 160 million yuan, an increase of more than 30% from the same period in 2012. It is expected that the "car-person" interconnection will gradually develop into the "car-vehicle-car-road" interconnection.

Another example is Zhonghai Da, a major satellite navigation system service provider. Out of its appetite for the application of three-dimensional simulation map data, it announced in January this year that it would spend RMB 83 million to incorporate Guangzhou Metropolitan Area Network Technology Co., Ltd. into its “Nuggets” network of vehicles. "In-vehicle-side information system" in the industry.

However, it needs to be reminded that as of now, the emerging industry chain of the Internet of Vehicles also has the problem of profit model. At present, all system manufacturers have adopted a free trial mode. During the free period, the owners are willing to try the on-board service system. However, once the free period expires, the proportion of customers who continue to pay for the service will be significantly reduced. Taking NavInfo as an example, the company’s performance report released on July 30 showed that it achieved revenue of 354 million yuan in the first half of the year, a year-on-year decrease of 12.67%; and the net profit attributable to the shareholders of the listed company was 3,925,700 yuan, a year-on-year drop of 60.07. %. The company said that due to the delay in the time-to-market of some new models using company navigation map products and the fact that the sales volume of some customers using the company’s navigation electronic map products did not reach the expected factors, the revenue of the company’s navigation e-maps decreased year-on-year.