Automotive Telematics on the Start of Explosive Growth Cycle.

Business Editors & Automotive Writers

MINNEAPOLIS--(BUSINESS WIRE)--Sept. 4, 2001

According to a new study published by Telematics Research Group, automotive telematics is in the infancy stage and is on the start of an explosive growth cycle. While only 5% of new autos sold are telematics-enabled today, by 2006 33% of new autos sold will have telematics. More importantly, over the next five years, the installed base of telematics-enabled autos in the U.S. will reach nearly 21 million for a compound annual growth rate of 63%!

"Telematics is an emerging industry at the same stage the PC industry was in back in 1980," says Dr. Egil Juliussen, principal analyst with Telematics Research Group. "During the 1980s, the number of PCs-in-use per 1,000 people exploded from 6 PCs to just over 200 PCs per 1,000 people. From 2000 to 2010, the number of telematics-enabled autos-in-use are projected to grow from 4 per 1,000 people to nearly 200 telematics vehicles per 1,000 people," adds Dr. Juliussen.

----------------------------------------------------------------------
               Telematics - Enabled Vehicles In Use
----------------------------------------------------------------------
USA                                1999  2000  2001  2002  2004  2006
----------------------------------------------------------------------
Cars In Use (Million)              126.9 127.7 128.4 129.3 132.5 136.4

Telematics Cars In Use (Million)   0.16  0.64  1.33  2.28  5.22  10.3

Telematics Car Share (%)           0.12  0.50  1.04  1.76  3.94  7.52

Light Trucks In Use (Million)      82.6  85.6  87.2  89.0  93.5  98.5

Telematics L. Trucks In Use
 (Million)                         0.07  0.47  1.14  2.14  5.23  10.3

Telematics L. Truck Share (%)      0.087 0.55  1.31  2.40  5.59  10.47

Vehicles In Use (Million)          209.5 213.3 215.6 218.3 226.0 234.9

Telematics Vehicles In Use
 (Million)                         0.23  1.11  2.48  4.41  10.45 20.6

Telematics Vehicles Share (%)      0.11  0.52  1.15  2.02  4.62  8.76
----------------------------------------------------------------------

Eventually all cars and light trucks will have some level of embedded telematics because the benefits to both the consumer and the auto manufacturers are so compelling. To the consumer, the safety and security aspects of telematics will eventually make telematics a requirement, much like anti-lock brakes are today.

To the auto manufacturer, the benefits of embedded telematics are widespread and may be enough to justify the cost based on operational cost avoidance alone. For example, the collection and analysis of remote diagnostics on large numbers of autos can identify reliability problems and this has the potential to lower warranty and recall costs. Furthermore, remote diagnostics is also likely to supply valuable data that can provide information for future design enhancements.

But telematics goes well beyond safety, security and remote diagnostics. Embedded telematics provides a platform for subscription-based content services. By 2005 these services will begin to exceed revenues from equipment, as telematics will serve as a delivery platform for everything from news, weather and traffic information, to e-mail, instant messaging and voice services.

Telematics Research Group tracks, analyzes, and forecasts the market for automotive telematics. For more information go to www.telematicsresearch.com, or contact Phil Magney at [phone].