Over the past few years China’s overall vehicle market has seen both highs and lows. The China Association of Automotive Manufacturers (CAAM) says that the total sales volume in 2018 went down by 2.7% from the previous year at 28.02 million units. This trend repeated in 2019 with total sales volume decreasing by 8.2%, caused by an increase in vehicle purchasing tax and a massive change in the country’s emission control regulations. However, this decline is projected to change in coming years, as car ownership is projected to reach and exceed 400 million units in 2023.
This anticipated uptick in sales is partly due to the rise of China’s new energy vehicle (NEV) industry, which is backed by both government policies aiming to promote electrification in automobiles and the backing of global enterprises committed to creating cutting-edge vehicle technology. As the demand for more intelligent and innovative vehicles grows both domestically and in the worldwide market, the Internet of Vehicles (IOV) is expected to be a fundamental player in this automotive revolution.
Smart, forward-thinking technology
Characterized as a web system targeting a vehicle’s internal communications, the Internet of Vehicles (IOV) can conduct wireless transmissions between vehicles, vehicles to people, and even vehicles to infrastructure and the internet. The IOV can help with transportation management, real-time information services, and smart control to achieve a more efficient and environmentally friendly transportation ecosystem.
The penetration of the IOV in China’s vehicle market reached 17.8 million users in 2017, amidst rising global demand from markets like Russia, Western Europe, and North America. The IOV relies heavily on technology like RFID, GPS and wireless positioning technology, and even integration with big data and cloud computing. Already, automobile manufacturers have seen investments from global giants like Huawei and ZTE, service providers like China Unicom, and telematic service providers like OnStar as part of the overall IOV value chain.
The rapid and constant adoption of new technology makes the IOV value chain a long yet flexible one that covers different moving parts:
- Upstream: includes RFID and sensor manufacturers, positioning chip, and other software
- Midstream: includes terminal equipment, software developers, and the automobile manufacturers
- Downstream: includes the system integrator, TSP, internet content provider, and mobile network operator
Widespread government support
The success of IOV as the future of mobility can also be attributed to the government’s enthusiastic support of this fast-growing market. In fact, new programs and initiatives have been established to build intelligent transportation through the IOV:
- The Ministry of Industry and Information has issued the Guidelines on the Development of National Standards System for the IOV to set industry-wide standards due to the numerous new players on the market.
- The National Development and Reform Commission is meet the development needs of “smart” cars through 5G-V2X by 2025.
- China’s state council has pushed for the development of the IOV through the Made in China 2025 policy to create a new generation of intelligent connected vehicles (ICV).
The Future of Mobility
China’s IOV industry has tremendous potential for new players, with many untapped opportunities in the fields of artificial intelligence, IT, cloud computing, and other technological applications. As the market further develops and stabilizes in the next decade, your business could potentially play a vital role in this revolution—download our full report here to discover what’s in store, along with an overview of existing technology being utilized.