Market Saturation
The auto black box market, which used to be easy for start-ups to enter, appears to be in the doldrums. The market seems to be entering its adulthood, as a large number of companies springing up across the country have liquidated.
Reflecting the phenomenon, the number of local black box companies decreased from 1000 in 2011 to 200 this year, including Hyundai MnSOFT, a subsidiary of Hyundai Motor Group, Thinkware, and Inavi.
According to market research firm IRS Global on August 21, the size of the local black box market for cars was 47,000 units in 2008, and increased to 784,000 units in 2011 and 1.55 million units in 2012. However, the number was 1.95 million in 2013, indicating a slowdown in market growth. The figure is also expected to reach only 2 million units this year, and thus it is apparently difficult to anticipate an increased demand for auto black boxes any more.
Compared to 194 million registered cars in the country as of late 2013, the market seems to have the growth potential. Nevertheless, experts are saying that the market has already become saturated, given more than 6.8 million black boxes that have already been sold so far, a two-year replacement cycle, and the slowdown in market growth.
To make a breakthrough, black box makers are eying overseas markets for exports. Installation of automotive black boxes in privately-owned vehicles is becoming mandatory in other countries, in addition to commercial motor vehicles. The size of the Japanese market is similar to that of the Korean market valued at around 400 billion won (US$392 million), and the Chinese market is 7.5 times as large as the Korean market. Hence, local black box manufacturers are actively seeking to penetrate overseas markets such as China, Japan, Russia, and Central and South America with the introduction of products suitable for each country.