High Demand for Improved Connectivity and Intelligence in Vehicles to Fuel Market Growth

The automotive sector is no stranger to innovations, and with the advent of novel technologies such as the Internet of Things (IoT), automotive manufacturers are in the pursuit of integrating IoT into vehicles during the manufacturing stage. Owing to noteworthy advancements in technology, a broad range of telematics services and devices has entered the automotive telematics market. Furthermore, telematics, which was once regarded as a niche feature, has gradually entered the automotive sector in recent times– a trend that is expected to continue in the near future. Despite a slow-paced adoption in the current scenario, automotive telematics is on course to gain significant momentum during the forecast period (2019-2027). Significant developments in connected car capabilities are paving the way for automotive telematics offered by third parties.

Some of the leading factors that are likely to accelerate the adoption of advanced telematics in the automotive industry include the willingness of government bodies across the world to mandate telematics services and rising consumer demand for improved connectivity in vehicles. Furthermore, automotive telematics offer improvements in road safety and driving behavior, and is likely to streamline insurance premiums in tune with usage-based insurance. Trends in the automotive telematics market also indicate that use of telematics in the automotive sector can open up new avenues for corporate businesses and individuals beyond matters of road safety and insurance. Due to these factors, the automotive telematics market is expected to reach a value of ~US$ 36 Bn by 2020 from ~US$ 7 Bn in 2019.

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Industry 4.0 Drives Adoption of Telematics Services in Automotive Industry

Industrial verticals across the world continue to evolve as the automation trend gains momentum. The global industrial sector is witnessing the dawn of the fourth industrial revolution, wherein factory automation and automation solutions, including telematics are set to gain notable traction. The onset of Industry 4.0 is expected to accelerate the adoption of telematics in the automotive sector. The adoption of telematics in the automotive sector is anticipated to increase at a rapid pace, owing to growing applications such as vehicle tracking, satellite navigation, fleet management, vehicle safety communication, etc.

Advancements in the automotive telematics market are heavily linked with the progress of the 5G technology. Swift and real-time data transmission across devices require advanced network with efficient data transmission. The advent of 5G technology is estimated to fuel the demand for autonomous technologies in the near future. Moreover, improvements in 5G will enhance coverage, speed, and reliability of automotive telematics– a factor that is expected to boost the growth of the automotive telematics market in the coming years.

Within the automotive telematics market, fleet management and vehicle tracking are expected to be key application areas. Both these segments are projected to account for ~65% share of the automotive telematics market in 2020.

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Benefits Offered by Telematics Technology in Fleet Safety to Propel Demand

Fleet management has attracted significant attention in recent years. The need to improve safety for cargo, personnel, and vehicles has driven the adoption of automotive telematics for fleet management. Automotive telematics has emerged as one of the most reliable and efficient services for fleet management such as emergency warning systems, GPS navigation, autonomous driving assistance, sensors, radars, etc. While some of the services focus on safety of the driver, these services, however, play a key role in improving fleet management. Stakeholders in the automotive telematics market are also engaged in the development of new automotive telematics solutions to gain an edge in the current market landscape. For instance, in January 2020, Geotab launched an integrated General Motors telematics solution. The newly launched solution is primarily developed to enable fleet managers to gain access to vehicular data and improve fleet management.

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Analysts’ Viewpoint