Vehicle Telematics Market Size, Share & COVID-19 Analysis, By Service (Information and Navigation, Safety and Security, Fleet/Asset Management, Insurance Telematics, and Infotainment System), By Technology (Embedded, Tethered, and Integrated), By Sales Channel (OEM and Aftermarket), By Vehicle Type (Passenger Cars and Commercial Vehicles), and Regional Forecasts, 2023-2030

The global vehicle telematics market size was valued at USD 72.85 billion in 2022. The market is projected to grow from USD 85.36 billion in 2023 to USD 280.78 billion by 2030, exhibiting a CAGR of 18.5% during the forecast period.

Vehicle telematics is a combination of informatics, telecommunication, vehicular technology, and computer science to form a telematics system that collects vehicle data, derives insights, and eventually improves the safety and driving experience of the driver. It also combines wireless telematics devices, GPS systems, onboard vehicular diagnostics, and other devices to transmit and record vehicle data such as location, vehicle maintenance, and speed. This data is useful for the analysis and improvement of driver safety and to improve vehicle performance.

Wireless connectivity allows the passenger and driver to connect to the internet when in a vehicle, allowing them to use various infotainment systems and services. The inbuilt module within trucks and passenger vehicles can easily access the traveling-related dynamics information, which involves weather forecasts, the current situation of the car on the road, easy route selection through maps, and information on local points of interest. The introduction and technology evolution with Industry 4.0, IoT, and wireless connectivity technology are anticipated to propel the automotive industry. The increasing demand for wireless communication technology within the vehicle is expected to be one of the significant factors driving the market growth.

COVID-19 IMPACT

Supply Chain Disturbances Hampered Market Expansion Amid the Pandemic

The COVID-19 pandemic had a huge impact on the automotive industry in 2020 owing to the lockdowns imposed to curb the spread of the virus. The lockdowns imposed in many countries have resulted in limited production and transportation delays. Also, worldwide limitations on movement had resulted in a standstill in trade activities. The decline in sales of passenger cars and commercial vehicles during the pandemic is a significant factor affecting this market in 2020. The automotive industry relies mostly on third-party manufacturers to deliver thousands of parts to complete the manufacturing process and deliver high-quality products. However, due to supply chain disruptions during the pandemic, this manufacturing process had slowed down, impacting vehicle sales. The slowdown in manufacturing and the decrease in automotive component sales indirectly impacted the automotive telematics market sales in 2020.

LATEST TRENDS

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Growing Demand for Connected Vehicle Solutions to Boost Market Growth

Connectivity solutions are gaining popularity over time. People are looking for connected vehicles to stay connected even when travelling. Many automotive manufacturers are introducing telematics systems for different vehicle types to attract customers and increase sales of cars. Also, vehicle manufacturers are integrating IoT solutions to enhance performance and improve safety. Moreover, significant developments in aftermarket telematics technologies are paving the way for third-party or aftermarket solutions and service providers. Many automakers are launching new fleet operator management technologies, such as GPS tracking, 5G, Artificial Intelligence (AI), and the Internet of Things (IoT), combined with telecommunication and informatics, which are gaining more popularity among users to adopt this technology, especially for fleet management. For instance: in November 2022, -ATrack Technology Inc., a leading international automotive telematics device designer and manufacturer, extended its portfolio by launching two new 4G fleet management products, the AK500 telematics gateway and AX300 OBD tracker.   

DRIVING FACTORS

Rising Demand for Vehicle Safety, Security, and Navigation Services to Drive Market Growth 

The safety of people has become an utmost priority owing to increasing congestion and road traffic, which gave rise to various fleet management solutions. Enhancing ADAS features in vehicles is one of the significant factors driving market growth. The automotive manufacturers are offering a wide range of safety features and are also investing in research and development for advancement in the ADAS system, which is driving the demand for telematics systems in vehicles. For instance, in April 2021, Denso Corporation, one of the leaders in the automotive industry, developed an Advanced Driver Assistance System that can support the new Lexus LS and Toyota Mirai. Also, in September 2021, Continental AG collaborated with Horizon, one of the leading players in artificial intelligence computing platforms, to boost the commercialization of automotive AI technology.

Considering the safety of the people, governments are introducing norms to mandate telematics systems into vehicles; for instance, since 2018, e-calls have been mandatory in all new European vehicles. The European Parliament passed a regulation which made compulsory for all vehicle manufacturers in the region to install eCall technology in all the new vehicles from April 2018. Moreover, the demand for other fleet management services such as road assistance, vehicle crash detection, driving assistance, and driver behavior analysis is anticipated to boost the vehicle telematics market growth.

RESTRAINING FACTORS

Major Security Concerns and Increasing Cybersecurity Breach to Restrain Market Growth

Cyber security is one of the biggest concerns for the telematics market. The threat of unauthorized access to the vehicle data or breaking into the vehicle's connectivity system is one of the concerning factors. The telematics system includes hardware, Bluetooth, software and apps, which can be tampered with or hacked. There are many use cases of a cybersecurity breach and unauthorized vehicle access. Hacking-related threats are one of the major concerns anticipated to restrain market growth. For instance, in January 2023, 7 security researchers exposed numerous vehicle vulnerabilities from 16 car makers, containing bugs that permitted them to control car functions and start or stop the engine. Also, in March 2023, Skoda Auto India's information of over 20 plus databases with customer info and leads from Skodalive.co. was leaked on a hacker forum.

SEGMENTATION

By Service Analysis

Insurance Telematics Segment to Dominate Owing to Growing Safety Awareness and Rise in the Number of Accidents

Based on service, the market is segmented into information and navigation, safety and security, fleet/asset management, insurance telematics, and infotainment system.

The insurance telematics segment held a market share of 23.85% in 2022. The growing penetration of Usage-Based Insurance (UBI) solutions across the automotive sector is anticipated to boost the market growth. Insurance telematics monitors the persons driving behavior and collects and stores data regarding the actions. Mostly, it acts as a mini GPS installed in the vehicle. The growing demand for business models such as car-sharing, carpooling, and ride-sharing is anticipated to propel the segment growth. Also, insurance companies are proposing discounts on standard premiums based on real-time monitoring of vehicle drivers and hence the adoption of telematics into the insurance sector is rising.

The fleet/asset management segment is expected to grow steadily during the forecast period. The fleet and asset management segment provides GPS tracking, recording vehicle data, fuel management, on-road assistance, emergency services, and many more. The increasing demand for fleet management software and services from commercial vehicle owners is anticipated to boost the segment growth.

By Technology Analysis

Increasing Demand for Connectivity Within Vehicles to Support Growth of Embedded Telematics.

Based on technology, the market is divided into embedded, tethered, and integrated.

The embedded segment is expected to dominate over the forecast period holding a significant market share by 2030. The embedded segment offers an in-built system that helps monitor vehicle performance and ensure continuous connectivity. Similar to smartphones, a cellular modem is installed within the vehicle. This modem allows the car to connect with other devices by a cellular network, such as cell phones. Almost every vehicle manufacturer provides embedded telematics on most of their vehicle models. In the U.S., around 80% of new vehicles involve installed with embedded telematics.

The integrated segment is expected to grow significantly during the forecast period. The demand for this segment is growing owing to the services such as quick response to the crash, breakdowns, emergency service, prompt response to road-side assistance and many more. The demand for integrated segment is growing, as this telematics creates a connection between headquarters and the fleet on and off the road. The increasing demand for such kinds of services is boosting market growth.

By Sales Channel Analysis

OEM Segment to Dominate Owing to Low Operational Cost and Constant Upgrading of Telematics Software and Services

Based on sales channel, the market is bifurcated into OEM and aftermarket. The OEM segment is expected to grow at 16.9% over the forecast period. The hassle-free and low-cost advantages of factory-fitted telematics devices will propel market growth. Additionally, software and services are significant factors boosting OEM telematics growth. For instance, in June 2020, Ford Commercial Solutions publicaly launched Ford Telematics, a web-based software platform and subscription service aimed to provide fleet managers easy access to crucial data of the connected vehicle.

The aftermarket segment held a significant market share in 2022. The demand for aftermarket telematics solutions is surging owing to big fleet companies and large mining and oil corporations who made the compulsion to keep a record of the vehicles by tracking them. Vehicle telematics is expected to have a huge growth opportunity in the aftermarket as these fleet management solutions can be customized according to the owners' needs. Stolen vehicle tracking, fuel management, engine monitoring system, and in-vehicle monitor system are some of the services offered at less price than the OEM. The increasing demand for telematics services from fleet owners is anticipated to propel the aftermarket segment growth.

By Vehicle Type Analysis

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Growing Demand for Passenger Cars with Advanced Safety Features to Aid Segment Growth

Based on vehicle type, the market is divided into passenger cars and commercial vehicles.

The consumer shift toward more advanced vehicles and preference for telematics systems providing advanced services, such as roadside assistance, emergency services, real-time tracking, and vehicle maintenance alerts, are anticipated to boost the passenger car segment growth. Embedded type of fleet management solution is mostly used in passenger cars in premium ad luxury cars. But as the competition is increasing, several vehicle manufacturers are installing telematics systems in the base variants of the vehicles. Moreover, the growing inclination of customers toward electric cars with advanced features is anticipated to fuel market growth.

Commercial telematics refers to the solution and services adopted for controlling and monitoring commercial vehicles through telecommunication devices. The increasing demand for telematics services for commercial vehicles owing to the need for different services, such as fleet tracking and monitoring, vehicle and driver safety, real-time engine diagnostics, and driver behavior monitoring, is propelling the market growth.

REGIONAL INSIGHTS

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Europe Holds the Largest Market Share Owing to High Sales and Production of Vehicles 

Europe dominated the global vehicle telematics market share in 2022. The increasing focus on prevention of accidents and the safety & security of passengers and drivers is propelling market growth in the region. Moreover, the strategic collaboration of the players to strengthen market positioning is anticipated to drive market growth in this region. For instance, in Jan 2022, Qualcomm Technologies, Inc. and Renault Group announced their intentions to expand their collaboration. This collaboration aims to provide Renault vehicles with the latest connected and intelligent solutions for its next-generation vehicles.

North America is expected to hold the second position with a market share of 30.8% in 2030. The increase in sales of electric vehicles in the U.S. is one of the major factors driving the market growth in the region. Moreover, government support to adopt vehicle fleet management technologies is fueling the market growth in the region. For instance: In 2022, the government in the U.S. signed a contract with Geotab Inc, one of the leading fleet management solution providers, to implement fleet management telematics technologies in 217,000 vehicles.

KEY INDUSTRY PLAYERS

Continuous Product Development is the Key Strategy Adopted by Webfleet Solutions B.V.

Webfleet Solutions B.V. (TomTom) is a well-known solution provider for vehicle telematics services, connected cars, and fleet management. The Webfleet software is available for all big and small types of businesses. The company provides software and services such as fleet management, vehicle tracking, fleet optimization, workflow management, and Milage logbook. The Webfleet serves rental, insurance, and leasing industries.

LIST OF KEY COMPANIES PROFILED:

• Robert Bosch GmbH (Germany)


• Webfleet Solutions B.V. (Netherlands)


• Mix Telematics (South Africa)


• Trimble (U.S.)


• Verizon (U.S.)


• Zonar Systems (U.S.)


• Octo Group S.p.A (Italy)


• Microlise Telematics Pvt. Ltd. (U.K.)


• Harman International (U.S.)

KEY INDUSTRY DEVELOPMENTS

• September 2022: Cambridge Mobile Telematics, one of the leading vehicle telematics service providers, launched DriveWell Crash & Claims, which is claimed to be a highly efficient solution for vehicle insurance claims.


• August 2022: IDEMIA, a leading manufacturer of identity technologies, completed its Automotive Connectivity Manager Platform, considered the automotive industry's first large-scale remote SIM access campaign. The company partnered with Mercedes-Benz AG to handover over 700,000 automobiles using over-the-air services from one mobile network service provider to another.


• July 2022: Edelweiss General Insurance, one of the leading insurance companies, launched SWITCH on-demand comprehensive motor insurance products in India under the initiative of IRDIA’s Sandbox. The SWITCH is a mobile telematics-based vehicle policy which automatically detects motion and activates insurance while driving the vehicle.


• June 2022: Geotab, a well-known IoT and connected transportation solution provider, declared a collaboration with Renault to integrate vehicle telematics technologies with the fleet management platform, MyGeotab. 


• February 2022: NEXCOM, the manufacturer of industrial computer hardware, partnered with Hailo, one of the prominent artificial Intelligence chip manufacturers, to introduce Nexcom VTC 1021 in-vehicle computer, the next-gen AI solution for vehicular telematics.

REPORT COVERAGE

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The market research report provides detailed vehicle telematics market analysis and focuses on key aspects such as leading companies, services, and product applications. Besides this, the report offers insights into the market trends and highlights vital vehicle telematics industry developments. In addition to the factors above, the report encompasses several factors that have contributed to the market's growth in recent years.

Report Scope& Segmentation