Consulting » Decisions – Satellite navigation

Until recently, satellite navigation systems were merely expensive add-ons intended for use in luxury, high-priced vehicles. But Carl Price, product manager at Lex Vehicle Leasing, says they are starting to cascade down from top-of-the-range vehicles to more modestly priced cars.

Price uses a TrafficMaster product called Smartnav in his own car, which costs £800 – less than half the cost of most LCD and voice-based in-car systems available today. What differentiates Smartnav – apart from price – is that the system is based on a service provided from a call centre rather than from the in-car computer’s map memory. It has a global positioning satellite (GPS) chip which tells the call centre where you are. There is a single button on the device, similar to a call me button on a website. “When you push this, the call centre comes on the line and you talk to them using a hands-free kit. You tell them where you want to go and they send the information down to the device in the car. It starts speaking directions at you when you reach a preset point on the route. I have found it to be 100% accurate and very useful, particularly when I am in a part of London I don’t know well,” says Price.

Another important point about this system is that it is easily fitted to any vehicle. Price likes the fact that he does not have to input a great deal of information into the screen at the start of a trip. Nor does he have to pull over to the side of the road to reinput his destination or requirements if they change during a trip.

At this price, companies could consider offering sat-nav systems to a far wider range of fleet drivers. However, Andrew Cope, chief executive of fleet contract hire company Zenith Vehicle Contracts, reckons that while Zenith has no axe to grind in the matter and would, or would not, provide satellite navigation systems as the client desired, it is seeing no call for such systems from the traditional company car driver.

“At the high end, where one is supplying cars for directors and senior management, and the demand is for luxury vehicles, not having an in-car navigational system installed could affect the resale value of the vehicle. So, for this reason, we would tend to provide such vehicles with the satellite navigation system as a factory installed item, as part of the specification. However, I see sat-nav cascading down to lower spec, lower priced vehicles over the next few years, much as we saw power steering and air conditioning cascading downwards,” says Cope.

Colin Burnhams, management consultant at fleet consultancy Windover Associates, points out that companies do not need to buy specialist satellite navigation systems to get the functionality of such systems for their drivers. If they have issued their drivers with a reasonably modern personal digital assistant (PDA) with voice capabilities, they can buy an application such as Tom Tom, which adds sat-nav to the PDA for a few hundred pounds as a one-off fee. “The only additional equipment the driver needs is a PDA holder on the dashboard and an aerial for the GPRS wireless service to receive the signals. The system will then guide the drivers to the destination they have entered,” he says.

It is also possible to add traffic flow information to these kinds of service, but this will cost the company a monthly subscription fee for real-time traffic information.

Burhams points out that any company acquiring fleet vehicles today needs to think at least three years ahead about the kind of market expectations they are likely to face when the vehicle is disposed. “We can be fairly confident that within the next three years satellite navigation systems will cascade down from the premium cars to run-of-the-mill vehicles. Therefore, it seems certain that not having a quality satellite navigation system in the car will impact the residual value of the vehicle,” he warns.