Vehicle Telematics Market Size, Share & COVID-19 Impact Analysis, By Service (Information & Navigation, Safety & Security, Fleet Management, Insurance Telematics, Infotainment System, Others), By Technology Type (Embedded, Tethered, and Integrated), By Sales Channel (OEM, Aftermarket), By Vehicle Type (Passenger Cars, Commercial Vehicles) and Regional Forecasts, 2021-2028

The global vehicle telematics market size was USD 58.69 billion in 2020. The market is projected to grow from USD 64.93 billion in 2021 to USD 179.50 billion in 2028 growing at a CAGR of 15.6% over the forecast period.  The global impact of novel coronavirus disease 2019, has been unprecedented and staggering, with vehicle telematics witnessing a negative demand shock across all regions amid the coronavirus crisis. Based on our analysis, the global market exhibited a steady growth of 4.32% in 2020 in comparison with the base years 2017-2019. The sudden rise in Compound Annual Growth Rate (CAGR) is attributable to this market’s growth and demand, returning to pre-pandemic levels once the crisis is over.

The automotive telematics system is a combination of information technology and telecommunication systems that is used to monitor movements and locations of automobiles with the help of on-board diagnostic systems and Global Positioning System (GPS). Automatic crash notification, automobile tracking, emergency calling, monitoring driver behavior, navigation assistance, and on-road assistance services are some of the major key features of these systems in automobiles. Further, the growing demand for smartphone features in the vehicle, automated driving technologies along with passenger safety features, developments in 5G connectivity, and an increase in efforts by the government for developing an intelligent transportation system (ITS) is expected to drive the demand for the market.

Automotive telematics offers services such as safety, security, and navigation to the passenger. Furthermore, it is used to enhance multimedia and internet applications in the infotainment system, road transportation, and road safety. These systems are widely adopted by fleet management, and insurance players for transportation and logistics purposes, and other end use industries to monitor movements and behavior of drivers. The integration of real-time fleet monitoring systems, enhanced fleet efficiency, lesser fuel consumption as well as use of cloud computing technology are the major factors that are contributing to the vehicle telematics market growth in coming years.

For instance, Robert Bosch GmbH, an automotive and connectivity supplier, has adopted advanced solutions in order to expand its business and provide the latest technology to their customers. The company recently developed a plug, a sensor device that is designed to detect crashes and analyze the driving behavior. Therefore, the market is anticipated to show an exponential growth from 2021 to 2028.

Labor Absence & Shutdowns in Manufacturing Sectors Slowed Down Market Growth during COVID-19 Pandemic

The COVID-19 crisis has impacted on nearly every aspect of society, and automobile manufacturers and insurance companies are no exception. In order to control and overcome the COVID-19 situation, companies and original equipment manufacturers (OEMs) in several countries were shut down, which largely impacted the economic situation, specifically of developing nations.

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 across the globe 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 instance, according to Toyota Kirloskar Motor (TKM) sales of Toyota in India have gone down by 86.49% to 1,639 units in May 2020 compared to 12,138 units in May 2019. Therefore, it is estimated that these factors will hinder the growth of the market.

However, post-COVID-19, the telematics market is expected to have a stronger acceptance by the fleet operators. The automotive telematics solution is essential for fuel monitoring and operations optimization. Further, the connectivity and digital services is anticipated to considerably influence market recovery post-COVID-19 as automotive telematics services, digital retailing, and automated digital freight brokerage solutions are likely to thrive.

LATEST TRENDS

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Increasing Smartphone Penetration to Drive Market Growth

Smartphones have become the main source of connectivity over time. It has created numerous opportunities for automobile manufacturers to change the traditional computer-based on infotainment systems with tablets and smartphones, thus, reducing the product cost. The increasing trend of staying connected with the outer world while traveling is encouraging automobile manufacturers to integrate connectivity solutions to improve sales. Nowadays 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 smartphone-based systems 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 Regarding Deploying Telematics in Vehicles to Propel Market Growth

Governments in major countries across several regions have imposed stringent rules and regulations for the safety and security of automobiles. Increased installation has been mandated in many countries to track the location and behavior of the vehicles. Services such as theft tracking and emergency call systems are put under basic requirements 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 should have location tracking devices, GPS, and emergency buttons as a safety measure. Also, the European Commission has mandated the integration of the e-Call systems to control the increasing number of road fatalities and for the safety of the occupants.

Growing Adoption of NGTP to Drive Market Growth

The Next-Generation Telematics Protocol (NGTP) is a protocol developed by Connexis LLC, WirelessCar, BMW AG, and Telematics Service Providers (TSP). It offers end-to-end services to the drivers, passengers, and the vehicles itself. This framework is built on a highly flexible infrastructure and is being adopted by numerous automotive companies. NGTP permits the consumers to access new services without adjusting any technical systems inside. This enables the original equipment manufacturers to provide new services to the running and new automobiles.

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. It consists of a visual display and wireless audio system that offers safety, security, in-built 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 system data as well as the unauthorized access to connectivity solutions in cars may hamper the growth of the market. 

SEGMENTATION

By Service Analysis

Fleet Management Segment to be Fastest-Growing Owing to a Decrease in Operational Costs of Business and Fuel Efficiency

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

The fleet management segment is projected to be the fastest-growing market over the forecast period. Fleet management solutions help running a business seamlessly by eliminating risky driver habits by identifying the causes, lowering excess fuel usage, and offering a strategy for more efficient routes. Fleet management services permit operators to locate vehicles on-demand, collect and store engine error data and identify dangerous driver habits including idling, harsh braking, and speeding. This driver data is invaluable for fleet operators. As it helps fleet operators to cut costs through their operation, that is growing the adoption of fleet management services.

By Technology Type Analysis

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Embedded Segment to Dominate Owing to Growth of Cloud-Based Services

Based on technology type, the market is segmented into integrated, tethered, and embedded systems. In 2020, the embedded technology segment holds a major share in the global market. The growth of the embedded technology segment is owing to several disruptive factors including the growth of cloud-based services, cost optimization of service plans, and government mandates. Various solutions cannot be used effectively and efficiently unless having an embedded connectivity solution like remote diagnostics, emergency call (e-Call), and among others that is growing the adoption of embedded connectivity.

Nowadays, several automakers are integrating solutions in vehicles to boost sales of automobiles. Prominent companies such as Volvo, Hino, Mack, and Ford are partnering with vehicle 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 be the Fastest-Growing Owing to Cost Effective & High Quality Alternative Components

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

The aftermarket segment is projected to be the fastest-growing market over the forecast period. They offer customized solutions to the end-users as per their requirements. The demand for aftermarket products especially in the commercial vehicle segment 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 sector has enormous potential for being one of the most disruptive trends in the upcoming decade.

By Vehicle Type Analysis

Passenger Car Segment to Hold Largest Market Share Due to Increasing Demand for Advanced Vehicle Telematics Services

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

In 2020, the passenger cars segment holds the highest share of the global market. The government mandates are one of the key factors for the segment growth. Further, the demand for safety and convenient-related advanced telematics passenger car services like fuel & routing optimization, vehicle-maintenance alerts, vehicle-finder services, real-time tracking, and stolen-vehicle recovery are the main drivers for the segment market growth.

The rapid industrialization and development of the transport 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 tracking of vehicles, monitor driver behavior, manage fleet operations, and offer informative solutions. In recent years, the transportation sectors have become dependent on automotive telematics which, in turn, is expected to propel the market growth.

REGIONAL INSIGHTS

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North America to Dominate Market due to Increasing Safety & Security Concerns for Drivers

North America dominated the market (with the U.S. accounting for most of the market share) and is valued at USD 22.16 billion in 2020. The region dominates the global market owing to increasing industrialization and a high volume of commercial cars. 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 market growth in this region. Moreover, government regulations favoring automotive telematics are boosting the market growth. For instance, the U.S. Government recently signed a contract with Geotab to equip 217,000 automobiles with fleet management telematics 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 a 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 and commercial cars from 2018 onwards. This is expected to reduce the response time of emergency automobiles and save passenger’s lives in case of severe accidents. Rising demand for remote diagnostics and precise navigation of commercial automobiles is fueling the demand for vehicle telematics in this region.

Moreover, Asia Pacific also shows an exponential growth in the global market owing to the rapid development and adoption of telematics solutions.

KEY INDUSTRY PLAYERS

The market is highly competitive and fragmented in nature, with the presence of key market players such as Robert Bosch GmbH, Webfleet Solutions B.V., MiX Telematics, Trimble, Verizon, Zonar Systems, Octo Group S.p.A, Microlise Telematics Pvt. Ltd., Omnitracs, and Masternaut Limited. These market players adopted new product launches and expansion to gain traction in the market.

Webfleet Solutions B.V. is a Top Player in the Market Owing to Industry-Leading Products

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

LIST OF KEY COMPANIES PROFILED:

• Robert Bosch GmbH (Gerlingen, Germany)


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


• MiX Telematics (Midrand, South Africa)


• Trimble (California, U.S.)


• Verizon (New York, U.S.)


• Zonar Systems (Washington, U.S.)


• Octo Group S.p.A (Rome, Italy)


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


• Omnitracs (Texas, U.S.)


• Masternaut Limited (London, U.K.)

KEY INDUSTRY DEVELOPMENTS:

• July 2021 – Cerence to Voice-Enable In-Vehicle App Store Platform from HARMAN Cerence Inc. partnered with HARMAN International to offer voice-enable in-vehicle third-party applications available in the HARMAN Ignite Store.


• February 2021 – IMS Launches Vehicle Data Exchange to Provide Complete Connectivity Service for Accessing Vehicle Data IMS launched the IMS Vehicle Data Exchange, a new service which provides live, real-time access to vehicle insights and mobility data from OEM-embedded hardware and any aftermarket device.

REPORT COVERAGE

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The global vehicle telematics market report provides a detailed analysis of the market and focuses on key aspects such as leading vehicle telematics companies, product types, and leading applications of the product. Besides this, the report offers insights into the 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