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The global telematics market generated revenue of $26.3 billion in 2015, which is expected to reach $140.1 billion by 2022, growing at a CAGR of 28.5% during 2016–2022. The growth of the market is mainly attributed to the increasing penetration of technology in developing countries.
The Asia-Pacific (APAC) region is expected to display the fastest growth in the telematics market, owing to the rapid development and urbanization in the region. Among all the countries in the region, China is expected to use telematics more speedily in commercial vehicles produced in the country.
Dynamics of Telematics Market
Growing application of telematics in insurance sector is a major trend witnessed in the telematics market. The insurance sector in developed countries is aligning with technology, in order to maximize profit. For instance, Usage-Based Insurance (UBI), incorporated by auto insurers, notifies insurance companies about the driving behaviors of their customers through telematics installed in vehicles. With the use of telematics, several elements of driving, such as miles drives, time of driving, rapid acceleration, hard breaking, and hard cornering, are measured. The companies assess data collected through telematics based on these elements and calculate the insurance premiums accordingly.
Increasing demand for connectivity is a main driver for the telematics market. With the advancement in technology, the demand for connectivity has been increasing everywhere. Vehicle telematics, trailer tracking, and container tracking are the common application areas of telematics. Telematics are used to transform automobiles into communication objects. Moreover, earlier telematics were featured only on premium vehicles; now it is either offered as standard feature on select vehicles, or as an option for low-priced vehicles. These are propelling the growth of the market.
Telematics Market Segmentation Analysis
On the basis of sector, the telematics market is categorized into commercial and consumer. Between the two, the commercial sector was larger category in 2015. This is because commercial telematics are used in light, medium, and heavy commercial vehicles, as well as in passenger cars for commercial purposes, in order to enable the tracking of such vehicles, which generates higher demand in this sector.
Whereas, faster growth in the telematics market is expected to witness in the consumer sector, due to increasing regulations on vehicular emission and surging integration of clean cabin in vehicles.
Global Scenario of Telematics Market
Globally, North America dominated the telematics market in 2015. The government in the U.S. has been implementing the use of advanced technology to ensure public safety. For instance, the National Highway Traffic Safety Administration (NHTSA) in the country licenses automotive manufacturers to provide information and updates, regarding safety measures and campaigns. Whereas, the APAC market is expected to witness the fastest growth during the forecast period, owing to the increasing urbanization and growing demand for high-end vehicles in the region.
Competitive Landscape of Telematics Market
Major players in the telematics market are actively involved in various strategic developments, such as product launches and partnerships. For instance, in October 2015, Trimble launched Trimble Asset Tracking, a flexible solution that offers complete visibility into the location and utilization of portable assets from a convenient portal. The solution enables field service organizations operating high-value portable assets, such as generators, pumps, or trailers, which are towed behind a service vehicle. Additionally, in March 2015, Trimble launched embedded ultra-high frequency radio-frequency identification (UHF RFID) module in its ThingMagic Mercury6e series. The module joins M6e, Micro, and Micro-LTE, thus enabling consumers to add UHF RFID into their telematics products.
Some of the major players operating in the global telematics market are Verizon Communications Inc., HARMAN International Industries Inc., TomTom International BV, AT&T Inc., Vodafone Group Plc, Ford Motor Company, BMW Group, Telefonica S.A., MiX Telematics, and Trimble Navigation Ltd.
Key Questions Addressed/Answered in the Report