Infotainment systems were only found in premium vehicles but now OEMs are working towards developing lower cost infotainment systems which will not burn a hole in the buyer’s pockets. Even entry level cars can have IVI systems now.
Automotive industry is witnessing growing demand for safety & security devices, more comfort, ubiquitous connectivity, and eco-efficiency. This leads to a demand for in-vehicle infotainment (IVI) systems that provide users with entertainment and information, which includes navigation/traffic information, communication/connectivity, security, multimedia, safety and web-based entertainment.
The in-vehicle infotainment system is a result of the synergy between hardware, software and services. The hardware components include the infotainment unit, telematics unit and in some cases a head up display. The software operating system is the heart of the infotainment unit, which helps the infotainment system to run. It also helps the user to access all the features of the infotainment system. The usability of in-vehicle infotainment systems is enhanced by providing certain services that go hand in hand to improve the overall user experience. These services are accessed through the infotainment unit and often come in packages or standalone services such as entertainment, navigation, e-Call, and vehicle diagnostics. To get a comprehensive view of the IVI evolution, refer to Figure 1.
By the end of 2010, alternatives for in-vehicle smartphone technology were introduced with large display screens that included services like audio-visuals, e-mail, vehicle diagnostics, navigation, and compatibility with mobile apps. These advancements reduced the risk of driver distraction. In 2014, Google and Apple introduced their fully integrated infotainment services, called Android Auto and Apple CarPlay, respectively.
Over time, automotive infotainment systems have evolved from audio to visuals, with the addition of navigation and smartphone integration. ISPs, in collaboration with OEMs, offer various monthly, quarterly and yearly subscriptions to stay connected. In turn, OEMs benefit from the diagnostic data they receive from the telematics control units (TCU), which are a part of the infotainment systems.
This flexibility and ease of access regarding the features on integrated systems are expected to drive the growth of the infotainment systems market in the low- to mid-range cars segment. The embedded systems segment is expected to grow at a high rate in the premium vehicles categories.
Companies like Harman, Alpine, Robert Bosch, Mitsubishi, Denso and Continental are some of the leading global suppliers of infotainment systems in the OE market. In India, Fujitsu Ten (Denso ten), Harman and Pioneer among others are major players in the OE market. Fujitsu supplies its infotainment systems to Maruti Suzuki Baleno, one of the largest selling hatchbacks in India, whereas Harman supplies to Tata for cars like Tiago, Bolt and Nexon. JVC Kenwood, Pioneer, Panasonic, Garmin and Sony are some of the most popular brands among consumers when it comes to aftermarket or retrofit infotainment systems.
Market scenario for IVI system in India
India had low penetration of infotainment systems as it is a cost sensitive market and infotainment systems were only found in premium vehicles like BMW, Audi, Mercedes-Benz, and other top end variants of D segment and above cars. Many consumers prefer to buy vehicles without infotainment systems and then fit a low-cost aftermarket as it would be cheaper, and most consumers still use their cellphone as their primary device for navigation and in car entertainment.
In the current scenario, entry level cars are still devoid of an infotainment system to keep cost in check, however they do get Bluetooth enabled music system which can connect to smartphones, but the functionality is very limited. Many mid segment cars with prices starting around Rs 5 lakh do offer in-vehicle infotainment systems either as an option or in the mid/top end variant.
Car ownership in India is very limited due to less per capita income when compared with other developing countries. However, with the rise in income among the middle class the vehicle sales in India is increasing. The focus is shifting towards comfort and safety features and as the installation rates of infotainment systems increase, India is projected to be one of the fastest growing markets for In-Vehicle infotainment systems. Currently most of the OEMs offer infotainment units in their top end trims and the Indian consumer finds more value for money in low to mid end trims, hence the current market infotainment units in India are lower when compared with other countries.
To multiple car owners in India, in-vehicle infotainment is not a necessity as almost all the features present in an infotainment unit are also present in a smartphone, which almost every car owner has. Additionally, jumping up trim levels just for infotainment system may not be a sound decision for consumers on a budget. As a result, many car owners choose to buy aftermarket/retrofit infotainment systems.
The driving factors
One of the major factors driving the demand for in-vehicle infotainment system will be the increase in passenger cars in India. According to data published by OICA (International Organisation of Motor Vehicle Manufacturers), the sales of passenger cars in India has increased from 2.5 million units in 2011 to 3.2 million in 2017. With the increase in level of disposable income more people are buying cars today than 5 years ago and this can be witnessed in the increasing sales figures of new cars.
The entry level cars segment still dominates the market, substantial increase has been seen in the sales of mid to high segment cars as well. This is the targeted customer segment for vehicle infotainment systems. Additionally, the car ownership among the new generation of millennials is increasing and being a tech savvy generation, customers prefer buying cars with latest connectivity features.
Hence, the increase car sales and changing consumer buying behaviour will be the major factors driving the Indian in-vehicle infotainment market.
Impact of IoT, connected cars & shared mobility
IoT and connectivity will have a huge impact on how we consume information. In-vehicle infotainment will also be affected by these trends as more and more vehicles and devices get connected to each other. This will bring in a host of new features remote diagnostics, vehicle theft tracking, e-toll, driver monitoring, traffic notifications, usage-based insurance (Automotive UBI) and many more.
The future of the automotive infotainment system is dependent on the introduction of connectivity technology such as 5G service, as well as vehicle connectivity such as vehicle-to-infrastructure (V2I) and vehicle-to-vehicle (V2V) technology. Gesture control, embedded systems, cloud technologies, and artificial intelligence are expected to be some of the next-generation trends observed in the vehicle infotainment industry.
5G technology will provide high speed connectivity and this will lead the projected shift from tethered infotainment systems to embedded infotainment systems, additionally it will have the following benefits and advantages:
On demand mobility or ride hailing is changing the landscape of mobility as we know it. Companies like Uber, Ola, Grab are integrating new features into their systems to provide better ride experience to their users. With the increase in travel times due to traffic congestions, many ride hailing companies are providing infotainment options in their cabs to keep the users entertained. Ola, one of the major ride hailing app in India is providing its service Ola play. It is a two-part infotainment service with one display at the drivers end and another at the backseat. The service includes infotainment options like music, movies, TV shows, ride related information and connectivity with multiple smartphone apps.
This not only provides entertainment to the customers but also helps the ride hailing companies in understanding their users in a better way by analysing their usage patterns of the type of media they consume to offer better services in future.
Global players like Microsoft have also entered into this market as the company collaborated with Ola to provide Azure cloud service platform to enable deeper and better connectivity and enhance the overall functionality of the Ola play service.
Emerging trends in IVI space
Smartphone integration is one of the ongoing trends in the IVI space right now. Earlier, most of the infotainment systems used to have the intelligence (operating systems, navigation and application) and connectivity built into the system. This meant that the infotainment system was self-reliant and did not require any external connectivity to function properly. However, these infotainment systems are very expensive and have been limited to premium cars till now. With smartphone connectivity, infotainment systems do not have the requirement of preinstalled apps or inbuilt connectivity as both are taken care by the smartphone itself. This will reduce the complexity of the infotainment systems and the cost as well. Hence more and more OEMs are providing infotainment options in their cars with Android auto and Apple car play which enable seamless integration between the smartphones and enables the user to access all the smartphone features using the infotainment display.
The quality of the infotainment display is of prime importance to users as the touch responsiveness of the display defines the user experience. Old infotainment systems used resistive touch screens but nowadays the infotainment systems use capacitive displays which are more responsive and provide better user experience. As a result, multiple Tier 1 and OEMs are working towards developing more responsive infotainment systems that have zero lag and will help the driver focus on the road rather than toggling the infotainment screen.
Addition to infotainment unit, increasing demand of connectivity-based solutions are also driving the Indian in vehicle infotainment market. Even industries are also adopting the recent trends. In Europe, E-call related regulation is expected to become mandatory, which is expected to be the major driving force of in-vehicle infotainment market. As of now, there is no regulation regarding connected car or E-call in India but generally Asian countries follow European regulations. So if E-call related regulation comes than it is estimated to be the biggest force behind IVI market in India.
Outlook for IVI market in India
The future of in-vehicle infotainment looks very promising in India as the users are moving from a basic only approach to a more luxury and safety focused approach while buying cars. Additionally, the OEMs are Tier 1 companies working towards developing lower cost infotainment systems which will not burn a hole in the buyer’s pockets.
OEMs are using in-vehicle infotainment as a product differentiator, to distinguish their products from their competitors and to upsell higher end variants to the customers. Going forward, OE fitted infotainment system is not expected to be limited to any vehicle class or price range, but as an option for even the entry level cars. The growing installation of infotainment system in new cars will also encourage the aftermarket/retrofit market as users with older cars would catch up on the trend by installing their cars with infotainment systems available in the aftermarket.
Taking these factors into consideration India is projected to be one of the fastest growing market for in-vehicle infotainment in the coming years.
Factors influencing market growth
Article Courtesy: MarketsandMarkets, which offers market research reports and custom research services.
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