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Battle for navigation crown in small but growing NZ market

Battle for navigation crown in small but growing NZ market

Local GPS car navigation heavyweights Navman and Tomtom are said to be “neck and neck” in the category, for which penetration and maturity remain low.

New Zealand-based and founded Navman says its market share remains in the 40 to 50 percent range here, saying it is the “brand leader”, while Netherlands giant Tomtom says it wants to be the local number one and believes it is at least “very close”.

Tomtom is one of a number of other brands to join Navman in the local market in the past couple of years, including Garmin and Uniden.

“If we’re not the top then we’re very close,” says Tomtom Australia/New Zealand marketing manager Chris Kearney. “We always want to be number one. Our goal is to drive the market size.” He says Tomtom doesn’t use external data to measure its position, relying instead on internal sales records and “general intelligence”.

The vendor launched here in 2007 and toward the end of that year told Reseller News it hoped the company had achieved the number two market position.

Navman sales manager Paris Basson says Navman’s market share fluctuates depending on “when products are phased in and phased out”, but says the percentage remains between 40 and 50, as it did last year. Its share was about 80 percent in 2007, before the entry of other local market players, he says.

“We’re very much the brand leader. We talk to our retailers about sales in and sales out,” says Basson.

Luigi Cappel, business development manager at Geosmart, the local mapping partner for both firms, says they are “neck and neck”.

“There’s really not a lot of difference between the two. They leapfrog eachother when one of them brings out a new feature or model.”

Tomtom has grabbed “huge market share” since entering New Zealand, he says.

“They’ve put huge effort into marketing and everything that comes with bringing a new brand in. Navman were a New Zealand success story and for a while when someone said Navman, what they meant was GPS navigation.”

Market researcher Gfk began tracking the local car navigation market at the end of 2007, incorporating retail data, but excluding pharmacies, supermarkets, staff, corporate and direct and internet sales.

It says year to date unit sales here for January to April 2009 reached 15,199, a 44 percent increase on the same period last year. The value of these sales was $5,868,284, up from $5,090,324 for the same months last year.

By contrast, Australian unit sales tracked by Gfk totalled 217,942 between January and April 2009, a 28 percent increase, with the value totalling A$65,189,659, a drop of nearly 5 percent.

GPS car navigation devices have been offered in Australia for about 13 years, says Cappel.

Globally, all car navigation vendors sold 8.8 million devices in the third quarter of last year, up 14 percent year on year, according to a Reuters’ report.

The value of the international car navigation market fell 21 percent in that quarter because of falling prices and pressure from handset makers, the report says.

Kearney says the potential to grow the New Zealand market is bigger than in other countries, saying the number of personal navigation devices covers only about 7 or 8 percent of the number of private vehicles here. This figure is about 13 percent in Australia and more than 30 percent in some European countries, he says.

Cappel says the category here is still “riding the success curve”, because New Zealand was late into the market.

He expects the category here to grow 200 percent in the next 12 months, despite the economic downturn.

“It’s a funny economy, where people can’t afford (GPS car navigation), but they can’t afford not to have it. As prices get lower, price is no longer a barrier for people who haven’t felt nav was important, but would like it. The cost of petrol and traffic congestion in Auckland are other reasons nav is growing.”

Males in particular will buy the units in increasing numbers, because the devices have a “cool factor” also found in products such as iPhones, says Cappel.

Car navigation down under

Year on year unit sales - January to April

New Zealand

2009: 15,199

2008: 10,576

Australia

2009: 217,942

2008: 170,757

Source: Gfk Retail and Technology


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