Despite strong gains in OEM-navigation shipments, aftermarket in-dash navigation shipments will continue to grow at double-digit percentage rates in North America through 2018, a Strategy Analytics study contended.
Shipments of portable navigation devices (PNDs), on the other hand, will continue to shrink through 2018.
In aftermarket in-dash navigation, the study forecasts a 17.6 percent gain in 2012 shipments to 2.6 million units, with 2012 OEM navigation shipments rising 20.1 percent to 5.1 million. PND shipments, however, will fall 8.6 percent to 10.7 million in 2012 following an even larger 2011 decline of 22.2 percent.
Beyond 2012, aftermarket shipments will rise at annual rates ranging from 10.6 percent to 20.1 percent until trailing off in 2018 to a 4.8 percent gain. OEM navigation will rise during that time at rates ranging from 17.1 percent to 36.6 percent.
In dollars, aftermarket shipments will grow at low single- digit rates because of price pressures caused by competition from smartphone navigation and from rising OEM penetration rates, Strategy Analytics said.
“Clearly PNDs, line fit [OEM] and aftermarket navigation systems are under great pressure from mobile phonebased navigation,” said analyst Roger Lanctot. “But factory-fit solutions will compete with these alternative navigation solutions with the use of superior integration of vehicle sensors and safe smartphone connections.”
Smartphone navigation has already forced automakers to bring lower cost solutions to the market, as Mazda has, or simply enable smartphone-based or hybrid on-board/ off-board solutions, as Ford has, Lanctot said.
Aftermarket navigation will survive and grow in units despite rising OEM penetration, aftermarket suppliers have said, in part because OEM navigation systems are often bundled with other options into a high-price package that consumers might not want to pay for. Marketers have also pointed out that the features of OEM nav systems are often behind the times, in some cases lacking street-name announce or featuring graphics of inferior quality to that of the latest PNDs.
As for dollar shipments, Strategy Analytics said that worldwide, aftermarket shipments will rise from $8.4 billion in 2010 to $10.6 billion in 2018 for a compound annual growth rate of 3 percent. OEM shipments will rise from $20.6 billion to $37.2 billion during that time for a compound annual growth rate of 7.7 percent. PND shipments will fall at a compound annual rate of 15 percent to $1.4 billion in 2018 from 2010’s $5.2 billion.