Commercial Telematics Market Size, Share & COVID-19 Impact Analysis, By Solution Type (OEM and Aftermarket), By Application (Solutions and Services), By End-User (Transportation & Logistics, Insurers, Healthcare, Media & Entertainment, Vehicle Manufacturers/Dealers, Government Agencies), and Regional Forecasts, 2021-2028

The global commercial telematics market size was USD 34.79 billion in 2020. The market is projected to grow from USD 40.18 billion in 2021 to USD 158.31 billion in 2028 at a CAGR of 21.6% in the 2021-2028 period. The global impact of COVID-19 has been unprecedented and staggering, with witnessing a negative demand shock across all regions amid the pandemic. Based on our analysis, the global market exhibited a growth of 11.46 % in 2020. The gradual growth in CAGR is attributable to the rise in the market’s demand and post-pandemic growth.

Commercial telematics enables commercial vehicles or trucking segments to share their real-time operating information with central offices or dispatch offices. The system usually consists of stationary fleet communication and mobile commercial vehicle. These commercial vehicles are equipped with several telematics sensors & devices to share the real-time operating data with the dispatch offices for efficient and safe transport of the cargo.

The adoption of commercial telematics is rapidly growing among fleet owners, OEMs, and insurers to gain real-time insights from the vehicle such as location, speed, braking, engine temperature, fuel usage, and others to improve the fleet efficiency & driver performance. Various telematics devices used in the industry are GPS trackers, sensors, mobile applications, vehicle engine diagnostic solutions, dashcams, and others. These devices interact to show how well the fleet is operating.

The growing penetration of telematics in emerging economies worldwide is exponentially driving the market growth. Additionally, government regulations regarding fleet management and road safety are expected to propel commercial telematics market growth in years to come. For instance, in 2016, the Federal Motor Carrier Safety Administration (FMCSA) officially mandated the use of telematics such as electronic logging devices (EDL) for motor carriers in the U.S. trucking industry. This mandatory regulation significantly increased the penetration of such solutions in the U.S. during the year 2017-18.

Disruption in Supply Chain amid COVID-19 to Hamper Demand for Commercial Telematics

The COVID-19 pandemic continues to impact the automotive industry. Additionally, government-enforced rules and regulations have disrupted the supply chain. Supply chain disruption and a significant decline in fleet management and trucking industry demand have had a negative impact on market growth. However, increased demand for usage-based insurance during the pandemic has positively influenced the market growth amid the COVID-19.

LATEST TRENDS

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Increasing Demand for Connected Automobiles to Drive Market Growth

Commercial telematics is transforming the way of organizing the fleet for companies and organizations. Additionally, the overall benefits of telematics devices are proportional to their adoption rate in the industry. Advanced automobiles such as connected cars are already equipped with several systems and sensors that connect them to the internet, cloud service, and surrounding; hence their adoption in the trucking and fleet industry is expected to boost the market growth. Moreover, their capacity to provide real-time information makes them highly suitable for the utilization of telematics.

Growing fatalities due to road accidents involving commercial vehicles and delays in transportation are driving the adoption of connected vehicles in the trucking industry. According to the National Safety Council, in 2019, the number of trucks involved in fatal crashes in the U.S. was 5,005, which is a 2% increase from 2018. Hence, the government’s focus on reducing the growing number of fatalities due to truck accidents is anticipated to drive the market growth during the forecast period. Moreover, growing traffic congestion and demand for the last mile delivery are expected to increase the demand for connected automobiles with telematics services.

According to the Association for the Safe International Road Travel, nearly 1.35 million fatalities occur in road crashes every year worldwide. Hence, demand for safe road travel and traffic flow is likely to accelerate the market growth in the near future.

DRIVING FACTORS

Decreasing Cost of Sensors to Drive Adoption of Commercial Telematics

Decreasing costs of the automotive sensors and telematics devices are fueling their adoption in trucking and fleet management industries of emerging economies such as India, South Korea, and others. Hence, rising demand for commercial telematics in medium to large scale industries in these regions is expected to boost the market growth over the forecast period. Additionally, technological advancement in the manufacturing processes of these devices also enables the manufacturers to provide telematics devices at affordable pricing, which further influences the market.

Moreover, the increasing use of smartphones and IoT devices for telematics data collection is also anticipated to influence the market growth. Smartphones are ubiquitous; hence they are highly suitable for telematics operations.

Increasing Adoption of Usage-Based Insurance to Boost Market Growth

Usage-based insurance provides a policy premium directly connected to vehicle usage. Insurance companies monitor real-time vehicle usage by using telematics devices and further decide the premium as per the usage. Hence, the increasing adoption of usage-based insurance (UBI) in well-established economies is expected to boost market growth in years to come. Moreover, supply chain disruption due to the Covid19 pandemic has reduced trucking and fleet activity worldwide. Many fleet owners are shifting from conventional insurance plans to UBI plans to opt for the benefits, creating a demand for telematics systems.

5G Connectivity to Create Opportunities for market

The growing development of 5G technology for enhanced internet connectivity solutions is anticipated to generate lucrative growth opportunities for the market over the forecast period. Additionally, the increasing advancement and popularity of autonomous mobility are further expected to create new prospects for the market in years to come.

RESTRAINING FACTORS

Cyber-security Concerns to Restrict the Market Growth

Telematics devices share real-time data with the assistance of internet connectivity and cloud services. Issues regarding cybersecurity and data safety become a primary concern of the fleet owners, which further restrains the market growth. Moreover, being a nascent technology, telematics hasn’t penetrated some developing and underdeveloped countries, which further hinders the market growth.

SEGMENTATION

By Solution Type Analysis

Rising Demand for Aftermarket Telematics to  Boost the Market growth

Based on solution type, the market is segmented into OEM and aftermarket.

The aftermarket segment held the largest market share of 85.1% in 2020 due to the rising demand for aftermarket telematics for navigation and infotainment services. Moreover, being nascent technology, the only handful of OEMs provide pre-installed telematics solutions. Hence, aftermarket telematics is in high demand. However, increasing strategic partnerships of automobile manufacturers with telematics service providers are expected to accelerate the OEM segment growth during the forecast period.

For instance, in January 2020, Geotab announced the availability of integrated telematics solutions for General Motors. Additionally, in March 2017, General Motors announced a strategic partnership with Spareon to provide telematics solutions to General Motor’s fleet customers. These strategic partnerships are expected to drive the OEM segment growth in years to come.

By Application Analysis

Strong Presence of Telematics Solution Providers to Boost the Market Growth.

Based on the application, the market is segmented into solutions and services.

In 2020, the solution segment accounted for the largest market share of 81.7% and was expected to continue its dominance during the forecast period. The presence of telematics solutions providers in the market is strong as compared to service providers. Additionally, the growing popularity of 5G ready solutions among the developed nations is anticipated to drive the segment growth during the forecast period. Moreover, software-based solutions are also in high demand owing to their efficient performance.

By End-User Analysis

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Demand for Efficient Logistics Operations to Drive the Transportation & Logistics Segment

Based on end-user type, the market is segmented into transportation & logistics, insurers, healthcare, media and entertainment, vehicle manufacturers/dealers, and government agencies.

Transportation & logistics was leading with a market share of 31.4% in 2020. Commercial telematics is highly used in the transportation and logistics industry for navigation purposes and for monitoring the location. Moreover, increasing demand for preventive maintenance, improved productivity, and enhanced fuel economy is anticipated to boost the segment growth in years to come. In addition to this, the government-enforced regulations to mandate telematics devices in the transportation and logistics industry, further expected to accelerate the market growth.

The insurers’ segment is projected to witness the fastest growth of CAGR 24.4% during the forecast period. The surge in demand for usage-based insurance in developed economies is expected to fuel the segment growth in years to come. Additionally, governments worldwide are enforcing the regulations to mandate the use of UBI, which is expected to propel the segment growth during the forecast period. For instance, in 2017, Italy enforced the law that recommends telematics for all insurance. Moreover, the surge in demand for usage-based insurance after the outbreak of the COVID-19 fueled the segment growth.

REGIONAL INSIGHTS

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North America led the market in 2020 with a market size of USD 11.50 billion. North America has the highest market penetration compared to other regions. The North American market is already in the matured phase. Additionally, the presence of well-established telematics solutions providers in the market, such as Verizon Connect, Omnitracs, and others, is the supporting factor for the market. Moreover, the high adoption rate of connected commercial vehicles and electromobility further accelerates market growth.

Asia Pacific is anticipated to witness the fastest growth of CAGR 25.9% over the forecast period. Growing penetration of telematics in emerging economies such as China, India, Japan, and South Korea are anticipated to fuel the market growth in the region. The availability of a strong automotive and transportation industry with increasing adoption of telematics is anticipated to propel market growth. Rising import-export activities fuel the demand for efficient fleet management, resulting in the market's rapid growth.

Europe held the second-largest market share in 2020. The strong presence of telematics in major countries, including the U.K. and Italy, drives the market growth. Additionally, well-established prominent automakers such as MAN, BMW Group, Daimler, and others support market growth. Increasing demand for safe transport, vehicle diagnostics, navigation, and efficient fleet management services are likely to boost the market in years to come. Germany is expected to witness an eye-catching growth rate over the forecast period.

KEY INDUSTRY PLAYERS

Leading Players Focus on Strategic Partnerships to Intensify the Competition

The market is consolidating with major market players such as Geotab Inc., Trimble Inc., TomTom Telematics BV, Verizon Telematics, Inc., Volkswagen Commercial Vehicles, and Continental AG, among others. For instance, Samsung and Harman International are introducing new 5G ready telematics products and solutions to grab the early opportunities in the market. The

Automakers are focused on strategic partnerships with the telematics solutions and service providers to equip their new automobile models with pre-installed telematics devices—for instance, General Motors' partnership with Spareon in 2017. Additionally, companies are also trying to introduce new 5G ready telematics for enhanced connectivity solutions. Moreover, automakers collaborate with user-based service providers to attract and improve customer loyalty by providing UBI’s benefits.

Verizon Connect Led the Market Owing to the Recent Acquisition

Verizon Connect is one of the leading telematics solution providers headquartered in Atlanta, GA, U.S. The company provides a wide range of telematics software for transportation systems. Its solutions include fleet dashcam software, fleet tracking software, root optimization software, road assistance software, driver management & safety software, and so on. In January 2018, Verizon Connect acquired Movildata Internacional, a Spain-based commercial fleet management solutions provider. Through this acquisition, the company strengthened its position in Europe through a geographical expansion strategy.

LIST OF KEY COMPANIES PROFILED:

• Geotab Inc. (Oakville, Canada)


• Trimble Inc. (U.S.)


• TomTom Telematics BV (Netherlands)


• Verizon Telematics, Inc. (U.S.)


• Mix Telematics International (Pty) Ltd (South Africa)


• Zonar Systems, Inc. (U.S.)


• Octo Telematics Ltd. (U.K.)


• Omnitracs LLC (U.S.)


• Masternaut Limited. (U.K.)


• Microlise Group Ltd. (U.K.)


• Inseego Corporation (U.S.)


• Volkswagen Commercial Vehicles (U.K.).


• Continental AG. (Germany)

KEY INDUSTRY DEVELOPMENTS:

• March 10, 2021: MiX Telematics and Imperial Enters into a Strategic Partnership MiX Telematics, a leading global SaaS provider of connected fleet management solutions, announced an agreement to be the preferred telematics supplier for Imperial, a leading Africa-focused integrated market access and logistics solutions provider. This strategic partnership allows for the alignment of data and reporting across Imperial. As per the new agreement, MiX’s premium solutions and services will be implemented across the entire fleet of Imperial for its proven risk management benefits.


• June 11, 2020: Ford Commercial Solutions Officially Launches Ford Telematics. Ford officially launched the Ford Telematics platform to assist commercial vehicle customers in optimizing their fleet and making them efficient. Ford Telematics is a web-based software platform with a subscription service designed to provide fleet managers easy access to crucial connected vehicle data.

REPORT COVERAGE

An Infographic Representation of Commercial Telematics Market

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The market report provides a detailed analysis of the market and focuses on key aspects such as leading companies, product types, and leading applications of the product. Besides this, the report offers insights into the commercial telematics market trends and highlights key industry developments. In addition to the factors above, the report encompasses several factors that have contributed to the key market growth over recent years.

Report Scope & Segmentation