Vehicle Telematics Market Size, Share & COVID-19 Impact Analysis, By Technology Type (Embedded, Tethered, and Integrated), By Sales Type (OEM and Aftermarket), By Vehicle Type (Passenger Cars and Commercial Vehicles) and Regional Forecasts, 2020-2027

The global vehicle telematics market size was valued at USD 115.49 billion in 2019 and is projected to reach USD 144.47 billion by 2027, exhibiting a CAGR of 8.4% during the forecast period.

Vehicle telematics is a combination of telecommunications and information technology that is used to monitor locations and movements of vehicles with the help of on-board diagnostic systems and GPS. It provides services such as safety, security, and navigation to the passengers inside the vehicle. This system is extensively adopted by vehicle insurance companies, fleet management companies for adequate transportation and logistics purposes, and other end-use industries to monitor the movements and behavior of the vehicles. The integration of real-time fleet monitoring systems, enhanced fleet efficiency, lesser fuel consumption as well as use of cloud computing technology in vehicles are the primary growth factors that are contributing to the overall telematics.

For example, automotive and connectivity supplier, Robert Bosch GmbH has recently adopted advanced telematics solutions in order to expand its business and offer the latest technology to their consumers. The company recently developed a telematics plug, a sensor device that is designed to detect crashes as well as analyze the driving behavior of the driver. Thus, the automotive telematics market is expected to grow and to show exponential growth in the forecast period.               

Lack of Labor and Shutdowns in Manufacturing Sectors has Slowed Down Market Growth Amidst the COVID-19 Pandemic

The recent coronavirus outbreak has had a daunting impact on several businesses across the world. In order to control and overcome this situation, businesses in several countries were shut down, which largely affected the economic situation, especially of developing countries.

The automotive industry has been hugely affected by the pandemic and the shutdowns in manufacturing units have brought several challenges. Automobile and parts manufacturing plants around the world have been shut down, customer traffic in showrooms has fallen sharply, and governments in countries across several regions have imposed temporary restrictions on cross-border trade, leading to a significant drop in automobile sales. For example, according to Toyota Kirloskar Motor (TKM) sales of Toyota in India have gone down by 86.49% to 1639 units in May 2020 compared to 12138 units in May 2019. Therefore, it is estimated that these factors will hinder the growth of the automotive telematics market.

LATEST TRENDS

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Increasing Smartphone Penetration to Drive the Market Growth

Smartphones have become the primary source of connectivity over time. It has created several opportunities for automotive manufacturers to replace the traditional computer-based in-vehicle infotainment systems with smartphones and tablets, thereby reducing the product cost. The rising trend of staying connected with the outer world while traveling is encouraging automakers to integrate connectivity solutions in vehicles to improve automobile sales. Nowadays telematics solutions such as fuel-theft monitoring, car insurance telematics, and eco-driving assist are provided through monitoring tools within smartphone apps. Thus, smartphones are a cheaper and convenient device as it eliminates the requirement of in-vehicle devices. For instance, Driveway software and Zurich Insurance Group together introduced a smartphone-based telematics system that detects driving movements as well as measures driver’s distraction and gives feedback to the driver on their phones.

DRIVING FACTORS

Stringent Government Norms to Deploy Telematics in Vehicles will Propel the Market Growth

Governments in major countries across several regions have imposed stringent rules and regulations for the safety and security of the vehicles. The installation of telematics in vehicles has been mandated in many countries to track the location and behavior of the vehicles. Services such as theft vehicle tracking and emergency call systems are put under basic requirements in vehicles in many countries. For instance, The Ministry and Road Transport Highway under the Central Government of India has imposed a regulation under Clause 35(2) of Section 2 of the Act that all the public transport vehicles should have location tracking devices, GPS, and emergency buttons as a safety measure. Also, the European Commission has mandated the integration of the eCall system in vehicles to control the increasing number of road fatalities and for the safety of the occupants.

Increasing Adoption of NGTP to Drive the Market Growth

The Next-Generation Telematics Protocol (NGTP) is a telematics protocol developed by Telematics Service Providers (TSP), BMW, WirelessCar, and Connexis LLC. It provides end-to-end telematics services to the passengers, drivers, and the vehicles itself. This framework is built on a highly flexible infrastructure and is being adopted by numerous automotive companies. NGTP allows the customers to access new services without adjusting any technical systems inside the vehicle. This enables the OEMs to offer new services to the running as well as new vehicles.

RESTRAINING FACTORS

High Installation Cost and Risk of Cyber Threat May Restrain Growth

The vehicle telematics system is a developing market in the automotive sector. These telematics technology systems consist of a visual display and wireless audio system that offers safety, security, in-vehicle entertainment, and information services to the drivers and passengers. These services in vehicles incur additional costs in the form of telecom services, hardware, and connectivity solution charges which may restrict the growth of the market. Moreover, the high risk of hackers accessing the in-vehicle system data as well as the unauthorized access to connectivity solutions in cars may hamper the growth of the market. 

SEGMENTATION

By Technology Type Analysis

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Integrated Segment to Dominate Owing to Rising Technological Developments

Based on technology type, the market is segmented into embedded, tethered, and integrated systems. The integrated technology segment holds a major share in the global market. Telematics has revolutionized the driving experience of the consumers, as it enhances the safety of the occupants. Nowadays, several automakers are integrating telematics in vehicles to boost sales of automobiles.

Prominent companies such as Volvo, Hino, Mack, and Ford are partnering with telematics providers to offer a seamless experience to its customers. Integrated systems are cost-efficient as well as offer an endless number of data sharing possibilities. For instance, Omnitracs offers integrated telematics to Volvo Trucks which aids Volvo customers to asset location and obtain insights into driver behavior.

By Sales Type Analysis

Aftermarket Segment to Hold the Largest Share Owing to Cost-Effective & High-Quality Alternative Components

Based on the sales type, the market is segmented into OEM and aftermarket. The aftermarket segment holds the largest vehicle telematics market share of the global market. In the past few years, aftermarket telematics solutions have grown significantly accounting to their ability to add connectivity and services to the vehicles. They offer customized solutions to the end-users as per their requirements. The demand for aftermarket products has fueled in recent years owing to their ability to offer high benefits to the end-user and high-quality replacements.

The future growth of the aftermarket telematics market has enormous potential for being one of the most disruptive trends in the upcoming decade. The OEM segment is anticipated to be the fastest-growing segment in the market. Major OEMs are partnering with telematics service providers to develop a cost-effective and robust telematics device. For example, in 2015 General Motors partnered with Verizon to develop fleet management solutions for its vehicles. The solution is web-based and can run on the OnStar 4G LTE technology installed at the factory.

By Vehicle Type Analysis

Commercial Vehicle Segment is Expected to Hold the Largest Market Share

Based on the vehicle type, the market is segmented into passenger cars and commercial vehicles. The commercial vehicle segment holds the highest share of the global market. The rapid industrialization and development of the transportation and logistics sector are expected to create several growth opportunities for the commercial vehicle telematics market. This development has, therefore, enabled the trucks and buses to operate day and night throughout the week. As the drivers of these vehicles make a living from driving, it is necessary to improve their work efficiency and safety. Therefore, advancement in data analytics and cloud computing have enabled the tracking of vehicles, monitor driver behavior, manage fleet operations, and offer informative solutions. In recent years, the transportation sectors have become dependent on vehicle telematics which, in turn, is expected to propel the market growth.  For example, in April 2018, the Indian government made it mandatory to equip tracking devices in all public transport vehicles.

REGIONAL INSIGHTS

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The vehicle telematics market in North America was worth USD 35.14 billion in 2019. The region dominates the global market owing to increasing industrialization and a high volume of commercial vehicles. The rising safety and security concerns of drivers, passengers, and vehicles, and the prevention of accidents are the foremost factors that are contributing to the telematics market growth in this region. Moreover, government regulations favoring vehicle telematics is boosting the market growth. For instance, the US Government recently signed a contract with Geotab to equip 217,000 vehicles with fleet management technology. Several insurance companies in North America are using telematics solutions to minimize the risk by tracking various aspects such as usage, security and maintenance.

Europe to show decent growth in the market owing to stringent safety regulations imposed by the government in this region. For example, the European Commission has made it mandatory to equip telematics eCall systems in all new passenger cars and commercial vehicles from 2018 onwards. This is expected to reduce the response time of emergency vehicles and save passenger’s lives in case of severe accidents. Rising demand for remote diagnostics and precise navigation of commercial vehicles is fueling the demand for vehicle telematics in this region.

Asia Pacific also shows an exponential growth in the global market owing to the rapid development and adoption of telematics solutions. For example, in April 2018, the government of India made it mandatory to equip vehicle tracking devices in all commercial vehicles which are over six-seater capacity according to the Automotive Industry Standard AIS-140.

KEY INDUSTRY PLAYERS

Webfleet Solutions B.V. is a Top Player in the Market

Webfleet Solution is a global leader in the telematics solutions platform that provides services in-vehicle telematics, fleet management, and connected car services. The company’s software-as-a-service solution helps save fuel, assists drivers, improves vehicle performance, as well as increases the overall fleet efficiency. The company was formerly known as TomTom Telematics until Bridgestone, the world’s largest tire and rubber company, acquired it under the new name Webfleet Solutions.

LIST OF KEY COMPANIES PROFILED:

• Bosch Connected Devices and Solutions GmbH (Gerlingen, Germany)


• Webfleet Solutions B.V. (Amsterdam, North Holland)


• MiX Telematics (Florida, united states)


• Trimble Inc. (California, USA)


• Verizon (Atlanta, Georgia, USA)


• Zonar Systems (Seattle, USA)


• Octo Group S.p.A (London, England)


• Inseego Corp. (San Diego, California, USA)


• PTC (Boston. Massachusetts, USA)


• Microlise Telematics Pvt. Ltd. (Nottingham, England)


• Omnitracs (Dallas, Texas, USA)


• Masternaut Limited. (London, England)

KEY INDUSTRY DEVELOPMENTS:

• September 2017 – Goodyear Announces Smart Tire Solutions for Semi-Autonomous EV Fleets. Goodyear Tire and Rubber Company announced smart tire solutions with wireless sensors in tires to deliver data-driven diagnostics and improve overall tire management.


• December 2019 – Octo Announces Acquisition of Nebula Systems to Enhance Vehicle Diagnostics Octo Telematics, a leading provider of data analytics solutions, acquires Nebula Systems to reinforce its position in advanced vehicle diagnostics. The company focuses on integrating Nebula solutions to monitor vehicle operations, improve vehicle health, analyze, and maintain the vehicle’s data platform and diagnostics.

REPORT COVERAGE

An Infographic Representation of Vehicle Telematics Market

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The market research 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 vehicle telematics market trends and highlights key industry developments. In addition to the factors above, the report encompasses several factors that have contributed to the growth of the market over recent years.

Report Scope & Segmentation