We are mainly engaged in the area of location-based services, consisting of
stolen vehicle recovery, fleet management services and other tracking services.
We also provide wireless communication products used in connection with our
location-based services and various other applications. We currently primarily
provide our services as well as sell and lease our products in Israel, Brazil,
Argentina and the United States.
Ituran was initially incorporated in February 1994 in Israel as a subsidiary
of Tadiran Ltd., an Israeli-based designer and manufacturer of telecommunications
equipment, software and defense electronic systems, whose original business
purpose was to adapt military-grade technologies for the civilian market. In
July 1995, Moked Ituran Ltd. purchased us and the assets used in connection
with our operations from Tadiran and Tadiran Public Offerings Ltd. The AVL infrastructure
and AVL end-units for the operation of our SVR services were originally developed
by an independent division of Tadiran Communications and Systems Group. These
operations were later transferred to a Tadiran subsidiary, Tadiran Telematics
Ltd. In November 1999, we purchased Tadiran Telematics from Tadiran and in 2002,
we changed its name to Telematics Wireless.
Stolen vehicle recovery services
Our stolen vehicle recovery and tracking services, which we refer to as SVR
services, enable us to locate, track and recover stolen vehicles for our subscribers.
Our customers include both individual vehicle owners who subscribe to our services
directly and insurance companies that either require their customers to install
a security system or offer their customers financial incentives to subscribe
to SVR services such as ours. In certain countries, insurance companies directly
subscribe to our SVR services and purchase automatic vehicle location products
supporting these SVR services from us on behalf of their customers.
Fleet management services
Our fleet management services enable corporate and individual customers to track
and manage their vehicles in real time. Our services improve appointment scheduling,
route management and fleet usage tracking, thereby increasing efficiency and
reducing operating costs for our customers. We market and sell our services
to a broad range of vehicle fleet operators and individual vehicle owners in
different geographic locations and industries. As of December 31, 2015, we provided
our services to approximately 140,000 end-users through 31,000 corporate customers
in Israel, Brazil, Argentina and the United States. We are currently exploring
collaborations with local entities in other regions of the world for the marketing
of our fleet management services and products in such regions. By the date of
this report, we have a total of 3,000 end users which are spread in various
countries (except Israel, Brazil, US and Argentina).
Value-added services
The personal locator services that we offer allow customers to protect valuable
merchandise and equipment. We currently provide personal locator services in
Israel, Brazil and Argentina and, we few thousands subscribers to this service.
In addition, through a call center, we provide 24-hour on-demand navigation
guidance, information and assistance to our customers. Such services include
the provision of traffic reports, help with directions and information on the
location gas stations, car repair shops, post offices, hospitals and other facilities.
We offer our concierge services to many of our subscribers in Israel, Argentina
and Brazil.
Wireless Communications Products
Our AVL products enable the location and tracking of vehicles, as well as assets
and persons, and are used by us primarily to provide SVR and fleet management
services to our customers. Each subscriber to our SVR services has our AVL end-unit
installed in his or her vehicle. Subscribers to services for locating equipment
and merchandise will use our SMART products. As part of our expansion into additional
markets, in 2006 we acquired control of E.R.M. Electronic Systems Limited (“ERM”),
a developer, manufacturer, and marketer of innovative vehicle security, tracking,
and management GSM based communication solutions for the international market.
Subscribers to our fleet management services use E.R.M hardware and our proprietary
software.
While we believe that the statistical data, industry data forecasts and market
research discussed below are reliable, we have not independently verified the
data, and we do not make any representation as to the accuracy of the information.
Location-based services
Stolen vehicle recovery
The demand for vehicle security products and services is driven by vehicle theft
rates, increasing security awareness among customers and insurance companies’
efforts to reduce incidents of loss. In addition, in Brazil, which is one of
our primary markets, a regulation was adopted pursuant to which new vehicles
(cars, motorcycles, trucks etc.), manufactured in Brazil or imported into the
country may only be sold when equipped with a blocking (immobilizing) and GPS
location system or tracking system (such as our products). However such regulation
was repeatedly postponed and in our understanding this regulation will be changed
completely in the future or entirely cancelled. In some of our markets, demand
for SVR services has been enhanced by incidents of carjacking and car-related
kidnappings that have increased consumers’ perceived crime risk. Additionally,
theft of trucks carrying valuable or hazardous cargo (e.g., microchips and chemicals)
represents a threat to commercial, industrial, public and personal safety and
security.
A wide range of vehicle security products, with varying degrees of sophistication
and pricing, are available to vehicle owners today. These products can be divided
roughly into two categories:
Traditional products, such as locks, alarms and traditional immobilizers.
These devices are limited in their effectiveness as most can be disarmed easily
and typically require the driver to activate the device upon leaving the vehicle.
Also, unmonitored alarms that set off sirens are routinely ignored by people
as the incidence of false alarms has been historically high. Furthermore, these
products can only help in preventing theft and not in recovering the vehicle
once it is stolen.
More sophisticated products that include some form of remote monitoring and
communication. This category can be further separated into devices that simply
provide information on the general direction of the vehicle and those that enable
the location, tracking and recovery of the vehicle in real time.
AVL technology is typically used to report stolen vehicles to police, provide
real-time location and tracking information and immobilize the vehicle if necessary.
The application of AVL technology has proven to be effective in increasing the
recovery rates of stolen vehicles. As a result, many insurance companies in
countries such as Israel, Brazil and Argentina either offer discounts between
10% and 20% on insurance premiums for vehicles equipped with AVL systems or
require customers to install such AVL systems in vehicles above a pre-determined
value.
The market for fleet management services ranges from very large fleets of thousands
of vehicles to very small fleets of five vehicles or less, with smaller fleets
constituting a significant portion of the market given the large number of companies
that maintain a fleet today. Fleet management services allow fleet operators
and individuals to locate, monitor and communicate with their vehicles and employees
in the field in real time. This helps them to better track loads, predict arrival
times, schedule customer appointments, reduce fuel usage and manage vehicles’
maintenance schedules. By increasing efficiency and reducing costs, fleet management
can provide a quantifiable return on investment for fleet operators, as well
as improve customer satisfaction. In addition, fleet management services can
enhance driver security and can notify the fleet operator if a vehicle leaves
a prescribed geographic region, reducing theft-related liabilities.
A principal factor supporting fleet management industry growth is the presence
of millions of vehicles that are in commercial use but which are not yet equipped
with fleet management systems.
Automatic vehicle location
AVL is one of the many possible applications for wireless location technology
and is an umbrella term used for communication equipment and services that facilitate
wireless tracking of vehicles, as well as assets and persons.
Typical AVL applications include:
Security
Transportation
Telecommunication services
Government
Vehicle tracking
Fleet management
Maintenance vehicle tracking
Government vehicle tracking
Driver Behavior and Accident Notification
Parcel tracking
Personal tracking
Public transit
Asset tracking
Currently, the main underlying technologies available for wireless location
and tracking in the AVL industry are terrestrial network triangulation, GPS
(in combination with wireless communication), network-based cellular communication
and radio frequency-based homing.
Terrestrial network triangulation uses the wireless signals transmitted by an
end-unit in the vehicle and received by a network of land-based wireless antennas
(base stations) installed in the relevant coverage region in order to determine
the precise location of the transmitter.
GPS-based systems utilize specially designed GPS devices in the vehicle that
receive data from three or more satellites in order to determine the location
of the device. Once located, GPS-based systems require a cellular or another
wireless network to communicate with a remote control center.
Network-based cellular systems utilize signals between the wireless device and
the cellular operator’s network of land-based antennas in order to triangulate
the location of the relevant device. These systems require two-way communication
between the device and antennas and, therefore, both a transmitter and receiver
need to be installed in the vehicle.
RF-based homing systems utilize direction-finding technology based on a tracking
signal transmitted by the end-unit in the vehicle, which is activated by a unique
radio signal from the tracking unit once the vehicle is reported stolen.
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