New Delhi: TomTom NV, the Dutch maker of navigation devices for automobiles, will start selling the devices in India by the end of this year which will help offset slowing sales in the US and Europe.
“We expect the Indian market to be significant in the coming years,” said Jocelyn Vigreux, general manager and senior vice president at TomTom India.
The Indian market, which was estimated to have sold 50,000 such devices last year, is expected to grow fivefold by the end of 2012 as car sales rise. Vigreux, however, declined to give details on how many units the company plans to sell in its first year in India. “We don’t want to be a marginal player in India,” he said.
TomTom sold 11 million personal navigation devices worldwide in 2010.
On Monday, the Wall Street Journal reported that the company expects profit to decline by almost half this year. It attributed the shortfall to faster-than-expected shrinkage in the market for personal-navigation devices, particularly in the US.
“We enjoyed extremely brisk numbers in Europe and the US. I would not say those marjets have saturated but there is a point when growth slows down,” said Vigreux. “We have to position it well to face this challenge. We are shifting our business model. The focus is more on countries like India, China and Brazil.”
In the US, the devices retail for $100-200, but the company hasn’t decided on the price of its products in India.
Tom Tom plans to employ 400 people in India by the end of this year. “We will launch our products by the last quarter of this calendar year,” Vigreux said.
TomTom, which will compete with companies such as Navteq Corp. and mapmyIndia, plans to import the navigation devices from its manufacturing facility in China, which is currently in the process of giving shape to India-specific units. Vigreux said the company is in talks with leading automobile companies and exploring the possibility of providing personal navigation devices along with cars to the customers.
High price is a major reason for navigation business not taking off in India, said I.V. Rao, managing executive officer (engineering) at Maruti Suzuki India Ltd. Rao said the company doesn’t provide such devices with any of its models yet but demand is set to grow with the rapidly expanding Indian car market.
Rao isn’t aware whether TomTom is in talks with Maruti for bundling the device with new cars.