Market Trends of APAC Telematics Industry
Passenger Type of Vehicles Segment is Expected to Hold Significant Market Share
- The passenger car segment is expected to drive the Asian telematics market owing to a high sales rate. Increased demand for safety and convenience telematics services is fueling the passenger car segment. Significant technological developments over the last decade have resulted in the launch of connected cars, which are expected to evolve further. Countries like China, India, Australia, and Japan have major passenger vehicle markets, and the safety regulations for these vehicles are more stringent in these countries, leading to the demand for high-end telematics services and connectivity solutions.
- The automobile sector in India got a cumulative equity FDI inflow of around USD 33.77 billion between April 2000 and September 2022. The Indian government expects the automobile industry to attract USD 8-10 billion in foreign and local investments by 2023.
- According to SIAM, the production of passenger vehicles in India in 2021-22 was around 3.65 million units, which grew to 4.57 million units in 2022-23. The passenger vehicle sales in India grew from 3.06 million units in 2021-22 to 3.89 million units in 2022-23. The growing production and sale of passenger vehicles are expected to drive the market in the region.
- China is a major contributor to the growth of the APAC telematics market. Some of the new automotive start-ups in China, like Nio, FutureMove, ThunderPower, and Qoros, use navigation and real-time traffic information systems in their latest portfolios. There is a steady increase in the demand for Stolen Vehicle Tracking (SVT) technology as vehicle thefts rise in China.
- The Advanced Driver Assistance System (ADAS) is another factor driving the APAC telematics market. Japan was one of the first countries to invent and implement most car ADAS. Japanese automotive companies are developing advanced devices for telematics and vehicle connectivity technologies.
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China Expected to Witness Significant Growth in the Market
- The telematics market in China is significantly growing, and the country's automotive industry has quickly adopted telematics technology, resulting in a substantial number of connected vehicles on the road. Connected cars enable various services such as navigation, remote diagnostics, infotainment, and safety features.
- The Chinese government has played a crucial role in promoting telematics adoption. In January 2022, the Chinese government changed the rules regularly to shape the country's introduction and adaptation of autonomous driving. The cars with ADAS and other connected car features must be fitted with devices similar to aircraft having back boxes, recording all the variables directing the autonomous driving systems. China's dominance in global automotive microcontrollers and microprocessors also gives them the upper hand in manufacturing telematics control units (TCU). Also, the country's recent investment in the 5G infrastructure market (as a recovery step from the COVID-19 outbreak) further promotes the local production of 5G TCUs.
- The proliferation of the Internet of Things (IoT) and the deployment of 5G networks in China have significantly enhanced the capabilities of telematics systems. Faster and more reliable connectivity allows for real-time data transmission, enabling advanced telematics services such as remote monitoring, over-the-air updates, and vehicle-to-everything (V2X) communication.
- The increasing number of base stations in China drives the market, enabling faster and more reliable data communication, expanding the range of possible applications, and fostering innovation in the automotive and transportation industries. According to MIIT, by the end of 2022, the number of 5G base stations in China is approximately 2.31 million. With extensive infrastructure investments and ambitious rollout plans, China has achieved significant 5G coverage. The forecasted number of base stations was projected to reach about six million by 2024.
- Fleet management solutions offered by telematics are in high demand in China, particularly in the logistics, transportation, and e-commerce sectors. These solutions help companies optimize their fleets, reduce operating costs, improve fuel efficiency, and enhance driver safety.
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