Garmin Ltd ( GRMN - Analyst Report ) , the maker of portable navigation devices, has opened offices in Shanghai, China; Stuttgart, Germany; and Yokohama, Japan. The idea is to get closer to all the major auto manufacturing markets of the world to sell built-in devices for automobiles including navigation, telematics and infotainment.

Garmin has been the most celebrated supplier of personal navigation devices (PND) that were largely used in automobiles. However, the incorporation of navigation into smartphones started to eat away its core market. Garmin tried to enter the smartphone market itself, but given the stiff competition from stalwarts like Apple ( AAPL - Analyst Report ) , Google ( GOOG - Analyst Report ) through devices from LG, HTC and Samsung, and Research In Motion ( ) , Garmin could not create a niche for itself.

Others in the space were increasingly selling navigation as software for smartphones and as in-dash solutions for automobiles, but because of Garmin’s initial push into smartphones, it fell behind in this race.

But Garmin is a very well-run company with solid business in several other segments, such as marine, running, cycling and aviation. Despite the issues in the PND market, it remains the number one player in the U.S. and number two in Europe. It also has a growing presence in Asia. Thus, it continues to generate solid cash flows.

The company is now using this cash to get back into the growth segment of the auto market. It is expected that the new offices will help it create customized solutions suitable for the region. Moreover, the increased proximity to manufacturing destinations will help it cement relationships with auto manufacturers, translating into more wins for the company.

Garmin currently has agreements with several leaders in the automotive segment, including BMW, Chrysler, Honda, Kenwood, Panasonic, Suzuki and Toyota, among others. These partnerships may be expected to expand and new ones added. We therefore feel positive about the initiative.

Garmin shares currently bear a Zacks Rank of #2, implying a Hold recommendation in the next 1-3 months. We also reiterate our long-term (6-month) Outperform recommendation.