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Brazil and Mexico to Grow to Over 1.6 Million Subscribers by 2020

Vehicle theft and expected regulations are key drivers for the automotive connected services market in Brazil. Original equipment manufacturers (OEM) and the overall connected services ecosystem are gearing up to introduce value-added services beyond vehicle tracking and immobilization. This study focuses on the OEM-fitted connected services market for the passenger vehicle segment in Brazil, in addition to providing a top-level view of the Market in Mexico. This research service forecasts the growth in the subscriber base in 2020 and evaluates various scenarios as to how the market will evolve in Brazil. The study also details the service providers and hardware manufacturer base and contains key OEM profiles, concluding with the top predictions and future outlook.

Key Findings

CONTRAN 245 015—more delays? What to expect
-As of May 2014, DENATRAN’s latest resolution states that the implementation date for the CONTRAN 245 mandate set in resolution (December 31, 2013) has been delayed by months.
-Frost & Sullivan expects that irrespective of the CONTRAN mandate, original equipment manufacturers (OEM) in Brazil will introduce automotive connected services on limited models in the short term (1 to years).
-Frost & Sullivan expects that the most likely scenario is that the CONTRAN 245 mandate will be implemented in a modified state: Changes with the technical specifications.
-OEMs will be required to install telematics boxes in all new vehicles; however, only immobilization is expected to be mandated. OEMs can create their own strategic preferred partnerships with telematics service provider (TSP) and telecom providers, prompting proprietary connected telematics services.
Brazil market scenario—a million subscriber market

-The automotive connected services market is expected to grow to over million subscribers in Brazil by 2020 and is expected to account for a penetration of about to % within the new car unit shipment in Brazil by 2020.
-Volvo, the only OEM offering telematics services, is currently the market leader in Brazil. General Motors (GM), Volkswagen (VW), and Fiat are expected to have over subscribers each by 2020.
Service providers (SP) or complete, high-end TSP?
-Although the aftermarket in Brazil is strong and well developed with providers such as Ituran, Autotrac, and Sascar, the services are limited only to business-to-consumer (B2C) stolen vehicle tracking (SVT) and immobilization offerings.
-Currently, WirelessCar is the only complete, high-end connected telematics SP for the personal passenger car (PC) segment in Brazil.
-Frost & Sullivan expects these SPs to partner with infrastructure providers such as OCTO Telematics and Cobra to become complete, high-end TSPs by 2020.
Complementary partnerships rather than competition

-OEM-TSP partnerships such as GM-Ituran, Ford-Autotrac, and VW-Zatix are expected to pave the way going forward for the automotive connected services market in Brazil, taking advantage of the bandwidth and scope that aftermarket providers currently enjoy.
-These partnerships are expected to extend even with the hardware manufacturers such as Kostal, Continental, and Magneti Marelli. However, OEMs expect innovation and flexibility with these participants as key decision-making factors to create partnerships.
-The Brazilian government’s decision to reduce taxes on subscriber identity module (SIM) cards for machine-to-machine (M2M) devices is a key driver for the connected services value chain to innovate new, value-added, and futuristic solutions.
Connected telematics service business model
-Frost & Sullivan has identified 3 key business models that show how OEMs will operate with the automotive connected services space in Brazil: warranty/insurance, free trial + renewal subscription, and purchase.
Connected telematics service business model (continued)

-The free trial + renewal subscription business model is expected to be the most entrenched and is similar to that in the US market.
Connected telematics service packages
-Frost & Sullivan has identified 4 levels of connected telematics service offerings. Level 2 includes SVT, immobilization, and smartphone app/remote services/RVD/vehicle maintenance and is expected to be the most common package offered by most OEMs in Brazil, with a focus on small-to-medium vehicle segments.
Insurance coupled with telematics—opportunity or challenge?
-Car insurance is not mandatory in Brazil; therefore, telematics services coupled with an insurance coverage may be challenged. However, some participants such as Ituran offer these types of solutions, which is understood to be an opportunity for both OEMs (attractive telematics service packages) and end consumers (high theft rate in Brazil). Furthermore, participants such as Cobra and OCTO telematics are expected to partner with insurance companies to facilitate telematics services.
-Additionally, this is an opportunity for banks such as Itaú that currently provide auto theft insurance solutions.
Market scenario

-The automotive connected services market is expected to grow to about 330,000 in Mexico by 2020 and is expected to account for a penetration of about to % by 2020.
-OEMs and TSPs: GM is currently the market leader in Mexico, with BMW expected to follow closely by the end of 2014. Therefore, OnStar is one of the key complete, high-end connected telematics SPs for the personal PC segment in Mexico.

Table Of Contents

Strategic Analysis of the Automotive Connected Services Market in Brazil and Mexico
1. Executive Summary

Key Findings
Market Engineering Measurements
Telematics Subscriber Forecast
Connected Services Offerings—OEM Snapshot
Ecosystem—Implementation of the CONTRAN 245 Mandate
Competitive Positioning of Key Industry Participants
Connected Services—Business Models
Connected Services—Packages
SPs—Comparative Capabilities Snapshot
Connected Services—OEM Competitive Positioning
Key Conclusions and Future Outlook

2. Research Scope, Objectives, Background, and Methodology

Research Scope
Research Aims and Objectives
Key Questions This Study Will Answer
Research Background
Research Methodology
Key OEM/Participant Groups Compared in this Study

3. Definitions and Segmentation

Product/Technology Segmentation and Definitions
Vehicle Segmentation

4. Global Connected Car Snapshot

Global Connected Car Market—Key Connectivity, Telematics, and Infotainment Trends
Global Connected Car Market—Key Regional Highlights
Global Connected Car Market—Top Level Solution Trends
Global Connected Car Market—Key Regional Solution Highlights

4G/LTE Availability—Brazil

5. Brazilian Automotive Connected Services Outlook

Connected Service Market and Technology Challenges—Brazil
CONTRAN 245 Mandate—Snapshot
CONTRAN 245 Mandate—History and Current Implementation Timeline
CONTRAN 245 Mandate—Functional Parameters
Ecosystem—Implementation of the CONTRAN 245 Mandate
CONTRAN 245 Mandate—Schematic Framework of Initiating, Setting Up, and Operating the Anti-theft System
SIMRAV

6. Forecasts and Trends—Brazil

Automotive Connected Services Market—Top 5 Key Findings—Brazil
Automotive Connected Services Forecast—Snapshot—Brazil
Unit Shipment Forecast—Brazil
Market Engineering Measurements
Connected Services: Subscriber Forecast Scenario Analysis
Connected Services: Subscriber Forecast—Frost and Sullivan Scenario 1
Connected Services: Subscriber Forecast—Frost and Sullivan Scenario 2
Connected Services: Subscriber Forecast—Conservative Scenario
Connected Services: Subscriber Forecast—Frost and Sullivan Scenario 1
Conected Services: Subscriber Forecast Discussion
Connected Services—Business Models
Connected Services—Packages
Infotainment Offering—Snapshot of Top 4 OEMs
Infotainment Offering—OEM Snapshot

7. OEM Profiles—Brazil

Connected Services Offerings: OEM Snapshot—Brazil
Connected Services Offering: BMW Brazil
Infotainment Offering: BMW Brazil
Connected Services Offering: Fiat Brazil
Infotainment Offering: Fiat Brazil
Connected Services Offering: Ford Brazil
Infotainment Offerings: Ford Brazil
Connected Services Offering: GM Brazil
Infotainment Offerings: GM Brazil
Infotainment Offering: Renault Brazil and Nissan Brazil
Connected Services Offering: Volkswagen Brazil
Infotainment Offering: Volkswagen Brazil
Connected Services Offerings: Volvo Brazil
Infotainment Offerings: Volvo Brazil

8. Service Provider Outlook—Brazil

SPs—Aftermarket Snapshot
SPs—Competitive Landscape
SPs—Discussion
SPs—Delivery Models
SPs—Company Profiles: Autotrac
SPs—Company Profiles: Ituran
SPs—Company Profiles: Porto Seguro
SPs—Company Profiles: Sascar
Telematics SPs—Company Profiles: WirelessCar
SPs—Company Profiles: Zatix

9. Telematics Hardware Manufacturer Outlook—Brazil

Telematics Hardware Manufacturer—Participant Snapshot
Telematics Hardware Manufacturer—Key Trends

10. Forecast and Trends—Mexico

Market Engineering Measurements
Automotive Connected Services—Subscriber Forecast: Mexico
Automotive Connected Services—Market and Technology Trends

11. OEM Profiles—Mexico

Connected Services Offering: BMW Mexico
Connected Services Offering: GM Mexico

12. Conclusions and Future Outlook

Key Conclusions and Future Outlook
The Last Word—3 Big Predictions
Legal Disclaimer

13. Appendix

Table of Acronyms Used
Learn More—Next Steps
Market Engineering Methodology


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