Telematics Control Unit Market Size

Telematics Control Unit Market Analysis

The telematics control unit market was valued at USD 3.85 billion in the previous year and is expected to register a CAGR of 14.8%, reaching USD 8.80 billion over the forecast period.

• Telematics is a communication system employed in the automotive industry that depends on data traveling to and from automobiles over wireless networks. The automobile industry is being propelled into the information age by combining wireless technology, location technology, and in-vehicle electronics.
• Data is either generated in the vehicle unit and communicated to the back-office systems, or the back-office systems push data to the vehicle unit like maps, stock updates, weather reports, internet data packets, etc. This exchange occurs by cellphone or the unit installed in the vehicle. The car communicates and maps its whereabouts utilizing a matrix of cellphone towers and satellite technologies. This technology is incorporated into and controlled by a telematics control unit.
• The telematics control unit has recently become a crucial component in the automobile industry. The adoption of telematics control units (TCU) has been low. The concept of connected cars is still in its early stages, with very few automobile companies including them. However, the emerging prospects of 5G and autonomous vehicles will likely expand the scope of connected cars. According to Appinventiv, connected cars are anticipated to become the largest segment of the global 5G Internet of Things endpoint market, having a projected 19 million endpoints by the end of 2023.
• The telematics control unit facilitates increasing the vehicle's connectivity by introducing additional modems and processors to enable communication from the car to the cloud, infrastructure, or other vehicles. It enables antenna power optimization through improved current sensing, diagnostics, and noise reduction. It generates a digital blueprint of every component of a vehicle's operation, enabling fleet management to evaluate where enhancements in accident prevention and driver safety regulations can be applied. In addition, the telematics control unit can help with maintenance by analyzing hours-of-use information, planning maintenance inspections, and taking note of guaranteed recovery, engine hour tracking, and service records tracking.
• However, factors such as a lower awareness in developed regions, price sensitivity of customers in developing and less developed regions, and the cyber security threat associated with telematics control units continue to challenge the growth of the studied market. Furthermore, the lack of a common global regulatory framework for telematics solutions challenges the growth of the market studied.
• The global COVID-19 pandemic had a notable impact on the growth of the market studied. It is expected to have a long-term impact on the growth of the market as the pandemic significantly enhanced the acceptance of telematics technology, such as telematics control units, by fleet operators and vehicle owners as the need for operations optimization and fuel monitoring grows. The pandemic has also driven the demand for remote vehicle monitoring solutions, as, during the pandemic, fleet operators no longer had the luxury of deploying human resources to manage the fleet. The growing demand for better tracking of assets and the increasing push for vehicle safety and autonomous vehicles post-COVID will give a significant thrust to the market studied in the coming years.