Ease of vehicle diagnosis due to the predictive analysis of telematics systems propels the global automotive telematics market to register a CAGR of 26.8% from 2019 to 2026.
According to the latest report - Global Automotive Telematics Market - - Global Opportunity Analysis and Industry Forecast, 2019–2026, published in Valuates Reports, the global automotive telematics market size was valued at $50.4 billion in 2018 and is projected to reach $320.6 billion by 2026.
The other factors that influence the market positively include intelligent transportation systems, better driver and vehicle safety, improved performance of autonomous vehicles, enhancement of business decisions for fleet owners, and rise in the trend of connectivity solutions, the report said.
Government regulations for vehicle telematics and a rise in the popularity of connectivity solutions are propelling the market forward.
Growth Trends
The automotive telematics market is expected to grow due to advanced diagnostic systems. This system in a car transmits vehicle data to both dealers and customers, allowing for predicting potential vehicle problems before they occur. With the help of connectivity solutions, fleet managers can easily track vehicle records and determine which vehicle has travelled the most, allowing them to provide services accordingly. In addition, diagnostic systems monitor engine health by keeping track of smoke emissions and fuel consumption. As a result, the market's growth is expected to be fueled by the ease with which vehicles can be diagnosed using mobile applications.
According to Valuates Reports, safety services provided by telematics solutions in vehicles are an excellent example of cutting-edge aftermarket technology that involves data sharing between vehicles and humans. Safety is a term that refers to a combination of telecommunications and automobile technology that is used to increase vehicle efficiency, lower fuel consumption and maintenance costs, improve security and safety measures, and assist the driver in improving the overall driving experience.
Live traffic updates, automatic toll transactions, insurance telematics, roadside assistance in the event of accidents or breakdowns, and smart routing & tracking are expected to provide key players in the automotive telematics market with an exponential growth opportunity.
Due to the increased demand for fleet safety and security in transporting goods via commercial vehicles, vehicles now include real-time monitoring, geofencing, and diagnostic features.
According to telematics service providers, the automotive telematics market is expected to grow rapidly in developing countries, the report noted. The use of automotive telematics in electric vehicles is also expected to boost market growth in the future. The market's leading vendors are eager to take advantage of the opportunities presented by introducing electric vehicles (EVs).
Besides, the growth of the telematics market is fueled by government rules and regulations for vehicle safety, security, and tracking in various regions. Moreover, automobile manufacturers are incorporating connectivity solutions into their vehicles to increase vehicle sales now that connectivity has become a necessity. Consumers expect their cars to perform tasks similar to those performed by computers and smartphones. As a result, the automotive telematics market is expected to grow at a promising rate as customer demands for staying connected 24 hours a day, seven days a week, even while travelling grow, the report said.
Key players in this space include Cartrack, Masternaut, Mix Telematics, Omnitracs, TomTom, Trimble, Verizon Connect, Harman, I D Systems and Telectrac Navman.
Market Share
The market is segmented by Channel (OEM and aftermarket), vehicle type (commercial vehicle, passenger car, and two-wheeler), application (fleet/asset management, navigation & location-based system, infotainment system, insurance telematics, safety & security, V2X, and others), and connectivity solution (embedded, integrated smartphones, and tethered).
Based on channel, the OEM segment was the highest revenue contributor in 2018, accounting for $33.7 billion, and is estimated to reach $225.6 billion by 2026, registering a CAGR of 27.9% during the forecast period.
The two-wheeler segment is expected to be the most lucrative during the forecast period based on vehicle type. Based on application, safety & security is expected to be the most lucrative. Typical applications offered under the safety and security features of telematics devices include tracking stolen vehicles, automatically alerting help centres in the event of accidents, driver monitoring, and remote locking/unlocking of vehicles.
The embedded segment is expected to be the most lucrative during the forecast period based on connectivity. In addition, government mandates, cost optimisation of service plans, and the growth of cloud-based services contribute to the development of embedded telematics solutions.
The Asia Pacific region is expected to be the most lucrative based on region. The rise in fleet management and concerns about safety and security are two key factors driving the growth of the China, India, and Southeast Asian automotive telematics solutions markets. Furthermore, the APAC telematics solutions market is expected to benefit from an increase in the trend of connectivity solutions, the research firm said.
Courtesy: Valuates Reports. NB: Photo is representational; courtesy: Tom Tom.