It Isn't Your Father's Oldsmobile Anymore

Big companies are fighting for the lead in the computer-heavy in-car navigation systems market

The race to develop and sell computer-based navigation systems is on, and car companies, electronics manufacturers and data providers are teaming up to try and beat each other to get products on the U.S. market.

"We plan to become No. 1 in this advanced technology within the next few years," said Roland Enhiss, Siemens Automotive Group's vice president and general manager of driver information systems.

But Siemens will have to compete with the half-dozen other firms planning to introduce America to on-board mapping systems in the next couple of years. Rockwell will be among the top rivals.

"We are making every effort to ensure that Rockwell has the products and systems in place to meet the needs of tomorrow's automotive marketplace," said Roger Stevens, general manager of Rockwell Automotive Electronics, after announcing his $3 billion division had reached a long-term deal with Navigation Technologies, a Sunnyvale, Calif.-based digital mapping company. "This agreement is evidence of Rockwell's commitment to lead rather than follow in developing leading-edge technology for the intelligent transportation systems-related market," he said.

Delco Electronics and Volvo each recently announced they'll soon sell automotive navigation systems in the United States, too. In-car electronic maps are already being sold in some parts of the United States as $2,000 dealer-installed options on Oldsmobile Eighty-Eight luxury cars.

Californians can buy a Sony or Pioneer off-the-shelf navigation unit for their cars for about $3,000. These two electronics manufacturers will make their systems available in more regions of the country as detailed digital data becomes available.

Sales of all in-vehicle navigation systems worldwide are expected to reach more than $1 billion by the end of 1995. Computerized car-mapping units have already caught on in Japan, which already has 850,000 installed in its vehicles. But the United States culture and infrastructure is much different than Japan, and companies selling in the U.S. must determine how to convince people to pay thousands of dollars for electronic directions, when it's free from a gas station.

Is technology driving the product?

Surveys suggest Americans like the information that in-car navigation systems can offer, including directions to a ballpark, voice prompts to tell drivers when to turn, and even restaurant reviews. But studies also reveal most people aren't willing to pay thousands of dollars for the information.

Consumer response has been very positive in tests, said Gary Latshaw of Etak, a Menlo Park, Calif.-based digital mapping firm. But for the average American consumer, "it's a matter of getting the product into the hundreds of dollars instead of thousands."

But part of America's driving public wants, even needs, these services, including rental-car companies, business people and commercial vehicles, such as taxicabs. "The rental market is enough to get us going," said Steven Brown of Siemens. Then sales from professionals and services fleets will follow, he said. Siemens Automotive, an operating unit of $53 billion Siemens AG of Germany, plans to sell a $2,000 unit in 1996.

Rent-a-car companies in the United States have already begun buying cars with computerized mapping systems. In fact, most of the 500 or so units Oldsmobile sold last year were to rental-car companies. Avis bought cars with Oldsmobile's Guidestar system for its Florida fleet.

"Ninety percent of our customers who participated in pilot programs say that in-car systems improve their sense of safety," said Avis Chairman and CEO Joseph Vittoria. Avis now plans to begin rolling out the systems nationwide. Hertz offers an in-vehicle navigation system in hundreds of its cars in California, Florida, Atlanta, Boston, Chicago, Detroit, New York and Washington, D.C.

In addition to the rental-car market, business people -- from sales executives to real-estate agents -- are being targeted as potential buyers. "The business environment wants computing in the car," said Tom Evernham, senior vice president for technology at Delco Electronics Corp.

Delco announced March 15 that it will begin selling a car stereo and navigation system in one for about $1,000. Delco thinks this price, about half that of other systems, is low enough to entice consumers. "The other attribute of our system is simplicity -- you don't have to understand rocket science to operate it," Evernham said.

Delco's Telepath 100 is the cheapest navigation system and the only one that is also a car stereo, however, it cannot do many of the things that the more expensive units offer.

Telepath 100 does not provide on-screen maps or turn-by-turn directions, instead, it is more like an electronic compass and database; a driver identifies where he wants to go and the computer shows the site direction and the distance from the target location. Rockwell, Siemens and Volvo units will each provide precise directions and will sell for about $2,000.

Turning Japanese

The momentum behind consumer acceptance of these systems is building in the U.S. and the "wave is beginning to crest," said Jamie Buxton of Etak. But America lags both Japan and Europe.

Europe's market is considered only slightly ahead of the United States. There, BMW has already introduced an in-car mapping unit and Mercedes will unveil one this month. But in Japan, the market is thriving and there are reasons why.

First, in Japan it's harder to know where you are, said Buxton. Many of the streets aren't named and even the buildings are numbered by historical account, not location, he said. Another reason is that Japan has an industry specification that makes the systems compatible, Buxton said. About 20 manufacturers make the computerized maps in Japan and they are interoperable. They can be put into all types of cars and can read different types of computerized maps.

In the United States, electronic manufacturers pair with Etak or Navigation Technologies to provide digital map information. Because the data is not interchangeable between the two firms, when consumers buy a navigation unit they are making a commitment to buy all their updated electronic maps from a certain vendor.

An effort is underway in America to make its systems compatible, but so far there are no U.S. standards, Buxton said.


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