Turning traffic nightmare into profitable venture
- Source: Global Times
- [08:16 December 30 2010]
- Comments
By Li Qiaoyi
While the swelling population of cars in Chinese cities has led to some appalling traffic jams, savvy transportation management professionals instead see the problem as a business opportunity.
One such company is China TransInfo Technology Co, a transportation management service provider.
The Beijing-based firm announced Tuesday it signed a contract worth 6.2 million yuan ($936,371) with Beijing Transportation Information Center to develop a commercial operation center, providing people on the road with traffic information services.
The commercial information center includes a platform for traffic information service distribution and a customized commuting service demonstration system, the NASDAQ-listed China TransInfo said in a statement.
All told, 500 interactive navigation terminals will be scattered across the city by the end of 2011, according to the statement. The contract encompasses center development and the use of 500 terminals for two years, after which time, China TransInfo will charge for additional terminal services, the firm said in a statement.
The deal was struck just a few days after Beijing government unveiled new measures aimed at easing worrisome traffic congestion in the city. The new measures highlight the importance the capital city puts on traffic information services as a way to avoid traffic congestion.
Analysts believe the market for the country's intelligent transportation system, though still in its infancy, has great growth potential as the government pays increasing attention to growing traffic headaches, particularly in metropolises.
Intelligent transport is expected to be included in China's 12th Five-Year Plan (2011-15), which will come out soon. This would greatly spur investment in the market, said Hao Jie, an industry analyst with Guolian Securities in Wuxi, East China's Jiangsu Province.
China's market for city roadway intelligent transport systems generated revenues of nearly 7 billion yuan ($1.06 billion) in 2009, and that figure is foreseen to grow to more than 10 billion yuan ($1.51 billion) by 2012, according to Hao.
Not only first-tier cities like Beijing and Shanghai, but some second-tier cities with relatively developed economies such as Suzhou and Wuxi in Jiangsu Province also necessitate investment in intelligent traffic management services, said Sun Weifeng, an analyst with Beijng-based IT mar-ket research firm CCW Research.
But Guolian Securities' Hao cautioned that, "these intelligent traffic information services may help alleviate traffic jams, they cannot be totally relied on to solve the problem. As sound urban planning is of the utmost importance."
Analysts pointed out that no dominant player exists in the national market, while competition may be fierce in different locations.
Nationwide, there are more than 1,000 firms engaged in the field, according to Hao.
