Telematics and infotainment systems have failed to live up to vehicle manufacturers' and suppliers' expectations in Europe, according to “Analysis of the Original Equipment Market for Telematics and Infotainment,” a report from Frost & Sullivan.

Original equipment telematics systems such as remote vehicle diagnostics (RVD) and safety and security systems currently have penetration rates of only 7% and 19% respectively, said Research Analyst Praveen Chandrasekar. He added that the penetration rate of navigation systems stands at 23% but is expected to decline at a rate of 3% till 2010.

"Consumer awareness of the features and benefits of these systems is relatively low and could be a key reason for their negligible uptake," Chandrasekar suggested. “There is still a huge perception among consumers that they are complex to handle and do not provide enough value for money. Since cost is an inhibiting factor, there is a critical need to demonstrate a compelling value proposition to potential consumers.”

European Union (EU) safety regulations stipulating that e-call be made a compulsory feature in all vehicles and all segments by 2009 may provide just the opportunity to structure an effective business case, especially for safety and security systems, according to Chandrasekar.

“RVD and safety and security systems share the same basic hardware requirements. Manufacturers could consider packaging and selling these systems together. Combined with favorable pricing, this strategy could drive the uptake of RVD systems as well.”