Automotive Telematics: Global Market Scenario, Trends, Opportunity, Growth and Forecast, 2020-2030

Market Definition

A wide range of connected car technology is included in automotive telematics. Systems for automotive telematics can send and receive wireless data. These systems are employed for communications, entertainment, safety, and security. Applications for automotive telematics are numerous and include managing insurance premiums, scheduling maintenance and services, and monitoring the state of the vehicle. Telematics technology currently has a penetration rate of around 60% in the new car manufacturing; it will reach about 80% in the next five years; and 90% of vehicles will have telematics technology in the following ten years, according to Valeo, a company that provides equipment and services for linked automobiles. The majority of automakers offer embedded and integrated connectivity in their vehicles, which makes telematics functions possible.

Market Insights

Even though the lifespan of some hardware items may not exceed five years, telematics hardware is thought of as a one-time deployment product. Overall, the business opportunities in the hardware section are far smaller than those in the services/content segment and only make up roughly a third of those in the connection segment. The income generated by hardware will nevertheless rise as the number of capabilities it has increases. As a result, it is predicted that during the forecast period, the market for hardware in telematics would expand at a moderate rate. The technology of automobiles has evolved as a result of IoT hardware, such as AI-based cameras, because the data gathered through hardware may be transformed into analytics based on machine learning and machine-to-machine technology.

With around 60% of the market by product type by the end of the forecast period, the services/content segment will start to take the lead. This segment is anticipated to expand at the fastest rate, with a CAGR of 17.5% from 2022 to 2027. The use of connected technology in vehicles is hampered by numerous obstacles. Automotive buyers are hesitant to spend the extra money needed for embedded connectivity because they believe their smartphones can meet most of their needs. Since these obstacles will likely persist in the near future, automakers are justified in turning to smartphone integration to quench consumers’ need for connectivity.

Long-term plans of automakers include integrating embedded connection into their automobiles. The following are a few factors that will encourage the use of embedded connection in cars.

The use of telematics services like eCall or stolen car tracking is required by several governments. When there is inbuilt connectivity, these telematics solutions function flawlessly. Therefore, it is anticipated that these rules will increase automotive integrated connectivity sales in the upcoming years.

The COVID-19 has altered consumer lifestyles and working from home is now typical across the globe. In light of this, usage-based insurance is replacing periodic payment insurance in the car insurance sector. The insurance provider can access car data via telematics software, enabling an insured motorist to pay a lower premium based on data-based vehicle risk assessments. Usage-based insurance uses telematics to calculate premiums based on the vehicle’s mileage and the driver’s driving habits. The insurance price will be reduced the less the vehicle travels or the better it is driven.

20% of American car owners currently use telematics-based insurance. At the same time, about 4% of Canadian auto owners use insurance that is based on telematics. Given that this is a cost-saving choice and encourages safe driving practices, this number is anticipated to rise in the upcoming years.

Market Dynamics: Drivers

Government’s Strict Regulations and Standards are Pushing the Installation of Telematics Devices in Vehicles

The vehicle telematics industry can be segmented into OEM and aftermarket installation based on how the devices are installed. The OEM category is anticipated to be roughly twice as large by the conclusion of the forecast period in this research since OEM installation growth is outperforming aftermarket growth.  Governments have discovered that telematics adoption in vehicles helps to reduce traffic accidents, promote passenger safety and vehicle economy, as well as improve fuel consumption in vehicles. This is one reason OEM installation is expanding globally. Particular attention is being paid to the installation of safety and security telematics devices in automobiles in North America and Europe. In order to increase safety, the U.S. government has made the use of electronic logging devices (ELDs) for recording driver hours mandatory for large commercial vehicles. The use of navigational aids is now required in all passenger-carrying vehicles in India, including shuttle buses, school buses, and similar vehicles.  In the upcoming years, it is anticipated that these mandated rules and standards would expand the global market for telematics products and services.

Market Dynamics: Challenges

Lack of Infrastructure for Connectivity in Many Countries

A cellular and internet-based infrastructure is needed to offer the hassle-free vehicle connectivity services. For drivers to receive highly accurate information on their vehicles, high-speed connectivity is required. Many long-distance trucks and containers travel long distances, where a lack of connectivity might result in a gap in data regarding the location of the vehicle, fuel consumption information, and other metrics. Due to their lower internet penetration rates compared to developed nations, nations like Nigeria, the Congo, and others have these types of problems.

Market Segmentation

• Based on Product Types, the Global Automotive Telematics market is segmented into
  • Services/content
  • Connectivity
  • Hardware
• Based on Application, the Global Automotive Telematics market is segmented into
  • Fleet/asset management
  • Navigation & location
  • Safety & security
  • Infotainment systems
  • Remote alarm & incident monitoring
  • Insurance risk assessment
  • V2X
  • Others
• Based on Connectivity, the Global Automotive Telematics market is segmented into
  • Integrated
  • Embedded
  • Tethered
• Based on Sales Channel, the Global Automotive Telematics market is segmented into
  • OEM
  • Aftermarket
• Based on Vehicle, the Global Automotive Telematics market is segmented into
  • Passenger vehicles
  • Commercial vehicles
  • Two-wheelers, equipment and movable assets
• Based on Geography, the Global Automotive Telematics market is segmented into
  • Asia-Pacific
  • North America
  • Europe
  • Latin America
  • Middle East & Africa

• All market revenue has been given in US Dollar.

Historical Year: 2020-2021
Base Year: 2022
Estimated: 2023
Forecast- 2024-2030

Key Questions this Study will Answer

• What are the key overall market statistics or market estimates (Market Overview, Market Size- By Value, Market Size-By Volume, Forecast Numbers, Market Segmentation, Market Shares) of Global Automotive Telematics Market?
• What is the region wise industry size, growth drivers and challenges key market trends?
• What are the key innovations, opportunities, current and future trends and regulations in the Global Automotive Telematics Market?
• Who are the key competitors, what are their key strength and weakness and how they perform in Global Automotive Telematics Market based on competitive benchmarking matrix?
• What are the key results derived from the market surveys conducted during Global Automotive Telematics Market study?