The Global Telematics Solution Market size is estimated to surpass $55.5 billion by 2027 growing at CAGR of 8.3% during 2022-2027. Automotive telematics deals with telecommunications and information technology which is related to long distance transmission of information in commercial automobiles. It is the technique of sending and receiving the information automatically from automobiles by vehicle to vehicle or vehicle to infrastructure through the integrated use of informatics and telecommunications. On-board integrated telematics system, driver interface in a vehicle, car tracker systems, sensor systems are the important telematics devices in vehicles. The major automobile industries are spending more on research and development activities and concentrating to develop and implement telematics in vehicles. Now a days vehicles are manufactured by implementing various technologies to offer unique connectivity solutions for better navigation systems and fleet management solutions. Telematics devices are used to transfer large amounts of information from the vehicle to infrastructure of other vehicles utilizing a telematics control unit. Commercial automotive telematics helps in car tracker system, emergency calls, remote control monitoring, connected navigation such as weather reports, traffic reports, route plans and in infotainment. Commercial telematics are used in conjunction with telecommunication systems to provide quick and easy informational access. The growth in telecommunications as well as connected vehicles has led to a major growth in the Telematics Solution Market. Telematics is an important differentiator for car manufacturers. Regulations such as anti theft tracking in new vehicles, eCall automatic emergency call device, and in some places insurers require GPS anti theft devices for high value cars. All these factors increase the demand of the automotive Telematics Solution Market.
Report Coverage
The report: “Telematics Industry Outlook (2022-2027)”, by IndustryARC covers an in-depth analysis of the following segments of the Telematics Industry.
Key Takeaways
- The growing demand for operational efficiencies in the industry is set to drive adoption of fleet management telematics. Companies have in recent years shifted focus from reducing operational cost to improving operational efficiency as a method to improve their profitability.
- Companies are also looking to fleet management services to monitor driver behavior in order to improve the efficiency of this aspect. Traditionally, truck driver monitoring included factors such as speed and vehicle location; however, with the advent of telematics monitoring has become more intrusive with features such as speed, braking and cornering techniques as well as route times, hours of service and fuel monitoring data.
- However for companies concerned with their environmental footprint, changes to the manufacturing process are time consuming and expensive. Fleet management services can be a quick solution to this arduous problem. The declining price for telematics hardware systems is also set to increase adoption of fleet management.
Telematics Solution Market, By Sales Channel, 2021 (%)
For More Details on This Report - Request for Sample
Telematics Solution Market Segment Analysis – By Vehicle Type
Commercial Automotive Telematics Solution Market size has revenue of $27.2 billion in 2021. In recent years, for monitoring driver behavior and vehicle, telematics black boxes have been used to transmit information such as real-time car trackers, vehicle diagnostics, changes in speed, harsh driving etc. This help fleet companies to evaluate and take necessary step to optimize their operations. Increase in the implementation of advanced solutions in order to reduce operational costs in the logistics industry is expected to propel the growth of commercial automotive Telematics Solution Market in commercial vehicles. Advanced and sophisticated telematics technologies are reshaping the way in which trucks operate by offering various services such as on-board recorder, telec maintenance scheduling and reporting any kind of unusual activities. The cost of the telematics systems still poses a challenge in terms of the adoption of telematics on a large scale, however, with the falling prices of the telematics systems in the future will snowball the market significantly
Telematics Solution Industry Segment Analysis - By Solution
Navigation systems accounted for 14% of the total telematics solution market Size of components in 2021. Navigation devices in the Telematics Solution Market are used to provide route details for fleets and transport systems. Navigation systems involve transfer of data regarding location and facilitate planning and routing functions using telematics control units. Navigation systems are mostly used alongside GPS devices in vehicles. GPS devices are used in conjunction with navigation systems. To counter the growing smartphone navigation market, many navigation systems manufacturers are shifting to OEM supply and provide support for Tier 1 auto manufacturer. Many OEMs have standardized navigation systems in their vehicles. This has led to a rise in the penetration of navigation systems. Aftermarket sales of navigation systems are however on the decline. This decline can be majorly attributed to the advent of smartphones. Free navigation services are offered on smartphones. As a result, customers are not willing to pay for features which they can obtain for free.
Telematics Solution Industry Segment Analysis – By Geography
North America market accounted for over 38.2% of the total industry share in 2021 and demand of automotive telematics with increase in connected cars with safe and security systems and others boost the demand of this market. Safety and security and infotainment systems are a big part of this market. The major companies operating in this market include automotive OEMs GM, Ford and Toyota, telematics service providers Garmin, TomTom NV, Fleetmatics, Telogis, Trimble and Navman. The factors such as reduction in the cost of connectivity and increasing market penetration of connected devices such as smartphones, and tablets are contributing to the burgeoning demand for connected cars. In most of the cases, data analytics companies, automotive OEMs, and telematics solution providers are forging meaningful synergies to collaboratively create newer solutions. Moreover, the advent of driverless vehicles has also created massive demand for vehicle telematics. For instance, Uber which sees its future in driverless cars recently introduced advanced telematics solution for drivers. It is expected to help drivers predict and prevent accidents while tracking vehicle performance on a real-time basis.
Telematics Solution Market Drivers
Recovery of Automobile Market increases potential user base
The key driver is, however, the recovering automotive market. Automotive industry is exhibiting positive gains recovering from recession, with increase in the number of unit sales. This creates a bigger potential market for telematics products and services. Automotive sales slowed down in major markets globally in 2017-2020 period. However, the market has witnessed growth in 2021 and this trend is estimated to continue in the next few years due to improving economic conditions in the U.S and Europe. Commercial automotive sales are also rising steadily particularly in the APAC market. Commercial automotive sales are set to grow from 22.1 million units in 2012 to 26.3 million units by 2021. New commercial vehicles models in Europe are offering inbuilt telematics functions such as emergency notification and car diagnostics due to changing governmental regulations. The increased customer demand has also led to increased sales of optional telematics services offered by automakers including UBI and GPS navigation. Taxis, buses and other commercial vehicles have started being sold with inbuilt navigational devices. The increased number of vehicle sales will provide a bigger potential market for sales of telematics devices and services.
Growth of Fleet management market set to propel the commercial Telematics Solution Market
The growing demand for operational efficiencies in the industry is set to drive adoption of fleet management telematics. Companies have in recent years shifted focus from reducing operational cost to improving operational efficiency as a method to improve their profitability. This has led to increased installation of fleet management telematics in logistics and fleet management companies. Companies are also looking to fleet management services to monitor driver behavior in order to improve the efficiency of this aspect. Traditionally, truck driver monitoring included factors such as speed and vehicle location; however, with the advent of telematics monitoring has become more intrusive with features such as speed, braking and cornering techniques as well as route times, hours of service and fuel monitoring data. This has led to increased utilization by companies looking to improve the efficiency of their delivery services. Companies have raised concerns about their fleet’s environmental impact. However for companies concerned with their environmental footprint, changes to the manufacturing process are time consuming and expensive. Fleet management services can be a quick solution to this arduous problem. The declining price for telematics hardware systems is also set to increase adoption of fleet management. The reducing price will lead to increased adoption in cost sensitive APAC and South American markets. The declining prices along with organizational concerns regarding operational efficiency and environmental impact are set to propel adoption of telematics. The investment into fleet management is project to surpass $15 billion in 2025 driven by adoption in the APAC region.
Telematics Solution Market Challenges
Government Regulations on Driver Distraction in U.S restrain Telematics Solution Market growth
National Highway Traffic Safety Administration in the U.S. has been stern regarding driver distraction laws. NHTSA desires OEMs to limit certain infotainment systems’ functions while being on the road. As a result in vehicle infotainment, Telematics Solution Market will be impacted. This is particularly significant in the satellite TV market. The National Transport Safety Board (NTSB) has argued that all electronics devices must be switched off when one is inside the vehicle, regardless of functionality. Governmental regulations, primarily in the U.S., have resulted in lower sales of infotainment telematics devices. In Europe, governments are looking at the benefits of infotainment driver distraction laws. This law is projected to be passed on in some form in Europe. The U.S. Telematics Solution Market is the primarily affected market in the short term as infotainment telematics device sales are set to exhibit sluggish growth. Distraction laws are not estimated to change in Europe for the next few years as government is still analyzing the impact of these laws in the U.S. The increased governmental driver distraction laws, primarily in the U.S. have resulted in lower infotainment telematics solution industry outlook.
