GM General Motors Company

By Mike Colias 

Aiming to please the tech-savvy buyers of Chevrolet's new Bolt electric car, General Motors Co. equipped it with a 4G Wi-Fi connection and a 10-inch touch screen. But GM left out one feature that not long ago was a must-have for many car buyers: built-in navigation.

Nearly all but the cheapest budget cars sold in the U.S. are offered with factory-installed navigation at least as an add-on. Its absence on the $37,500 Bolt is unusual -- and the latest sign that the ubiquity of smartphones is fundamentally altering how drivers get around.

Many car owners are taking advantage of larger smartphone screens by mounting them on the dash or even clutching them in their hand to monitor a route while driving. Citing safety risks, car companies in the last two years have responded by equipping vehicles with Apple Inc.'s CarPlay or Google's Android Auto, which allow drivers to plug their smartphones into a USB to display the phone's maps, music and other street-legal features in the dash.

GM and other car companies typically use CarPlay or Android Auto as a supplement to factory-installed navigation gear, which has long served as a lucrative revenue stream. But many consumers say they no longer bother using the built-in systems.

It is "not as much of a have-to-have feature as it was a few years ago," said Mike Luner, a general manager at a Fiat Chrysler Automobiles dealership owned by Del Grande Dealer Group in Northern California. FCA continues to offer built-in navigation across its lineup.

Jeff Hawkins, co-founder of hand-held device maker Palm Inc., bought a Bolt recently and says the lack of onboard navigation doesn't bother him because he prefers to use Google Maps on his Android phone. Mr. Hawkins, now a neuroscientist, said the Google system offers "superior design, routing and real-time advantages" to factory navigation.

Built-in navigation systems have advantages. Because they use a GPS module and software wired into the car, they don't rely on a wireless connection. That eliminates the risk of losing access if a signal drops, and minimizes the need to drain smartphone data plans by using a navigation app.

Still, the car companies' systems have endured tough criticism for not being updated in real time, requiring dealer support for updates and lacking crowdsourcing advantages offered by systems such as Alphabet Inc.'s Waze app.

Waze, for example, aggregates users' location data to detect backups and route drivers around traffic. Apple Maps lets users find nearby restaurants and book a reservation through OpenTable.

GM figured Bolt buyers are savvy and comfortable using the Apple or Google system, company spokesman Vijay Iyer said. He said the car also comes with GM's OnStar concierge system, providing vocal turn-by-turn directions as another option.

GM doesn't plan to phase out navigation offerings in other vehicle lines. The company plans to eventually integrate additional location-based features on the Bolt, which comes with a $7,500 federal income-tax rebate for electric car purchases. For example, CEO Mary Barra last year raised the possibility of a feature that would help Bolt drivers find the most efficient route between charging stations to optimize battery life.

While they aren't the moneymakers they once were, factory navigation systems still rake in profits. Research firm IHS Markit estimates the systems cost auto makers roughly $450 on average, while consumers pay between $500 and $1,200. A stand-alone guidance system may have commanded $2,000 five years ago, but they are increasingly being bundled into technology packages that include everything from backup cameras to heated seats.

Analysts expect margins to shrink further as more consumers discover CarPlay and Android Auto. Introduced less than two years ago, those systems are available in nearly a quarter of vehicles produced in North America, IHS estimates. By 2020, that number is expected to grow to 62%.

Even if today's drivers are finding less reason to pay more for factory navigation, car companies and suppliers aren't giving up on them. That is because the self-driving vehicles of the future will need high-definition maps to navigate roadways.

As autonomous vehicle usage grows, companies are expected to layer in smarter mapping features based on more accurate imagery.

The systems will become "more granular and sophisticated," James Etheridge, a spokesman with Berlin-based mapping company Here Global BV, said. Here's maps will be "connected to the guts of the car in a way that smartphones simply are not."

Write to Mike Colias at Mike.Colias@wsj.com

(END) Dow Jones Newswires

April 16, 2017 07:14 ET (11:14 GMT)

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