Telematics Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023 - 2028)

The telematics market is segmented by Channel (OEM, Aftermarket), Solution (Smartphone, Portable, and Embedded), Offering Type (Hardware, Service), and Geography.

Telematics Industry Overview

Telematics Market Overview
Study Period: 2018 - 2028
Fastest Growing Market: Asia Pacific
Largest Market: North America
CAGR: 17.85 %

Major Players

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*Disclaimer: Major Players sorted in no particular order

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Telematics Market Analysis

The telematics market is expected to project a CAGR of 17.85% over the forecast period from 2022 to 2027. The telematics market combines telecommunications and information technology to send, receive, and store data to control remote objects. The telematics market has expanded to include vehicle technologies, electrical engineering, computer science, and many other fields due to the widespread use of advanced technology. The application's focus has recently shifted from vehicular analytics to driver's safety and other aspects of personal service. Unwanted incidents, like accidents, speeding tickets, and downtime, can be minimized by observing driving behavior, vehicular health, driving dynamics, and maintenance intervals.

  • The telematics market is predominantly driven by wireless connectivity in the automotive industry, the industrial sector, and many other industries. The expansion of the telematics market has multiplied due to the different initiatives the government has done for on-road public safety. Numerous important organizations are altering their business strategies and beginning to deal more economically due to the shifting market conditions.
  • With the rise of electric and autonomous vehicles, the automotive industry is undergoing a significant transformation. Examples include the creation of new applications like Advanced Driver Assistance System (ADAS), Mobility-as-a-Service providers (MaaS), and CASE, the entrance of new industries leveraging IoT technology, and the introduction of new services like ride- and car-sharing. Fast data transmission, analysis, and implementation are necessary for these applications. These reasons collectively are primarily fueling the expansion of the telematics Market.
  • Big Insurance companies like HDFC Ergo offer insurance plans, with the premium calculated based on data collected from the driver's telematics. Better scores through safer driving help the company provide lower insurance premiums, promoting a safer and relaxed driving style among drivers of all ages. Driver's Alert has reported telematics to have resulted in 45% fewer vehicle accidents, a 75% reduction in speeding events, a 90% improvement in seat belt usage, and an 80% reduction in aggressive driving (e.g., hard cornering).
  • On the other hand, Artificial Intelligence, the root cause of transportation, automation, construction, and industrial applications, is one of the fastest-growing technologies. The developing advancement in this technology has made it possible for the telematics market to grow at an increasing rate. In recent years, OEM solutions have kept up with the pace, and vehicle and trailer manufacturers have begun to provide their solutions preinstalled in vehicles and trailers. With the introduction of advanced-featured solutions, OEM opportunities are projected to fuel market expansion.
  • High installation costs are one factor that restrains the overall market; however, plug-and-play equipment, which is quick and easy to install into the diagnostic ports, is the best option to reduce installation costs. Other devices might need a specialist to install them. Installation fees will be higher for a device that needs to be hardwired or adapted. Also, telematics is a concept based on technology that attracts various cyber-attacks. Hence businesses should take proper cybersecurity-related measures to overcome the loss.
  • Also, the implementations of connected and electric vehicles have gained popularity lately. The ongoing advancements in technology have led to the share of connected cars among the new vehicles sold to rise from 35% in 2015 to almost 100% by 2025, as per the estimations made by Accenture. The increase in vehicles connected to V2X (vehicle connected to an external IoT device) increased the exchange of intelligent and cooperative IoT data between them. Hence, it is vital to use this data helpful to the driver efficiently. Artificial intelligence (AI) is being deployed to help transform connected mobility into intelligent mobility.
  • The ongoing COVID-19 pandemic negatively impacted the telematics sector. Lockdowns and subsequent manufacturer operations shutdowns have had a negative impact on the market owing to the government rules. The supply chain disruptions have caused delays and other operational challenges. As things begin to normal, the market will be expected to expand favorably during the upcoming years.

Telematics Industry Segments

Telematics merges the capabilities of information technology and telecommunication properties and is used extensively across various end-user industries for adequate transportation and logistics purposes. The telematics market is segmented by Channel (OEM, Aftermarket), Solution (Smartphone, Portable, and Embedded), Offering Type (Hardware, Service), and Geography.

By Channel
Original Equipment Manufacturers (OEM)
Aftermarket
By Solution
Smartphone
Portable
Embedded
By Offering Type
Hardware
Services (Entry-level, Mid-tier, High-end)
By Geography
North America
Europe
Asia Pacific
Latin America
Middle East and Africa

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Telematics Market Trends

This section covers the major market trends shaping the Telematics Market according to our research experts:

Smartphone Solution is Expected to Hold a Major Market Share

  • Smartphone telematics offers considerable advantages in terms of efficiency and safety. In today's increasingly connected world, it's critical to understand how to maximize the potential of mobile devices to make the most out of business. Utilizing smartphone telematics technology to track drivers and cars in real time can be one method to achieve this. This enables monitoring performance, offers driver coaching, and ensures the fleet operates as effectively as possible.
  • Smartphone telematics utilizes smartphones with various sensors, technologies, internet connectivity, and apps to track different telematics variables. The smartphone becomes a powerful telemetry device with consumer engagement features through app development. For example, Software integrations like Android Auto and Apple Carplay in the car's infotainment system provide a seamless experience to the users, providing telematics data through their proprietary app. The Apps may be capable of producing data like locations, geographical zones, driving styles, vehicular performance, and other customizable points of interest.
  • Smartphone telematics has several advantages, including lowering the cost of implementing UBI technology while keeping the benefits of usage-based insurance. Since the insurance company does not have to pay for the development and distribution of UBI hardware, its data remains remarkably accurate. The transition to smartphone-based UBI policies allows insurance companies to cut expenses, raise profit margins, and forward some of those savings to their customers through discounts and benefits.
  • TrueMotion (acquired by Cambridge Mobile Telematics), a start-up based in Boston, utilizes mobile technology's power to improve driving habits, including distracted driving. The company reports reducing distracted driving by 20% through safe driving programs. When the car insurer began to move away from the plug-in devices it uses in its Snapshot usage-based insurance (UBI) program; the start-up found a technique to gather driving data from smartphone sensors.
  • Moreover another such example is ByMiles. It is an automotive insurance company offering insurance about the miles its users drive. It asks the users to install a match-box-sized plug-and-play Miles Tracker under the car's dashboard, which tracks the miles, updates the same on the cloud through the smartphone platform, and provides the premium per the user's use of the vehicle. The newer cars with connected technology can also sync their car kilometers directly with the company's cloud.
Telematics Market

Asia Pacific is Expected to Witness Significant Growth

  • The Asia-Pacific telematics market is highly competitive and consists of many significant players. Few big competitors now control most of the market in terms of market share. Manufacturers are putting more effort into raising the relevance of their products to customers. It is encouraged to innovate products to gain an advantage over rivals. China is expected to be the most lucrative market, followed by Japan and India during the study period.
  • As electric vehicles and autonomous vehicular technologies are gaining popularity, the automotive industry is witnessing the introduction of new electronic safety aids, such as Advanced Driver Assistance System (ADAS) and Mobility-as-a-Service providers (MaaS), increasing the need for telematics in this region. The concepts of CASE, referring to “Connected” cars, “Autonomous, Automatically” driving cars, “Electric” and “Sharing” cars, are shaping the automotive field worldwide. These applications require high-speed data transmission, analysis, and implementation through cloud-based platforms. Such defining factors are mainly driving the Asia Pacific telematics market growth.
  • The regional government also plays a pivotal role in the studied market growth. For instance, by 2022-2023, the Indian government plans to make cars with Electronic Stability Control (ESC) and Autonomous Emergency Braking (AEB) standard fitment. In addition, the Ministry of Road Transport and Highways declared that it is trying to make ADAS (advanced driver assistance systems) mandatory for automobiles to reduce the number of accidents in the country.
  • According to a survey conducted by market vendor Tech Mahindra, 45% deemed it necessary to use telematics for safety and security, 90% of respondents preferred buying a vehicle with telematics capabilities (in a four-wheeler), and 65% are comfortable sharing their location details and driving behavior with fleet managers. The survey was conducted to understand the buying behavior and level of awareness of automotive telematics technologies among Indian consumers.
  • As revised in Bloomberg’s post from January 2022, the Chinese government is changing the rules regularly to shape the introduction and adaptation of autonomous driving in the country. 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.
Telematics Market

Telematics Market Competitor Analysis

The Global Telematics market is moderately fragmented and consists of many players actively launching new solutions to maintain market relevance. Companies such as AT&T, Verizon, and Cisco are currently actively involved in deploying telematics across regions. Manufacturers are collaborating and delivering new products, leading to the market's growth. The companies in the market are offering their telematics systems and solutions to rail electronics solutions, traffic management solutions, and fleet management.

  • In March 2022, Geotab partnered with Free2move, a subsidiary of Stallantis, to deliver an intelligent telematics solution. Geotab will provide a unified MyGeotab platform, consolidating data from the servers of Geotab and Free2move to offer a seamless experience. The forum will be introduced among Stallantis' eligible car brands in North America, like Ram, Dodge, Jeep, and Chrysler.
  • In February 2022, Audi and Verizon reported to partner to bring 5G to Audi's select 2024 lineup. The collaboration will witness the introduction of 5G Ultra-Wideband connectivity being brought to the vehicles to promote personalized and augmented data usage, per drivers' preferences. Also, Audi and Verizon are jointly developing cellular vehicle-to-everything (C-V2X) technology for low latency communication among other vehicles as a part of the formed infrastructure.
  • In January 2022, Geotab Inc., a global pioneer in IoT and connected transportation, was granted a sole-source contract by the Air Force Department of the United States, the air service arm of the United States Armed Forces. The Department of the Air Force will use Geotab's trusted fleet management solution to equip its approximately 21,000 general-purpose vehicles.

Telematics Market Top Players

  1. AT&T Inc.

  2. Geotab Inc.

  3. Cisco Systems Inc.

  4. Verizon

  5. MiX Telematics

*Disclaimer: Major Players sorted in no particular order

Telematics Market

Telematics Market Recent Developments

  • March 2022 - MiX Telematics, a global firm for telematics, collaborated with a Brazil-based bus and coach service provider to utilize the benefits of telematics both ecologically and economically. The company extended its customer base by 2000 new subscriptions, accounting for 4015 subscribers. Telematics will save fuel consumption by 15%, with the buses covering about 8 million driving miles per month. The ecological benefits will be equivalent to around 9435 trees reducing CO2 emissions.
  • February 2022 - LG received an order from a classified Premium European finished car manufacturing company for implementing connected car telematics. According to the deal, LG will focus on delivering vehicle-to-everything (V2X) systems-compliant hardware and software for cutting-edge 5G network integration. LG will also offer Dual Sim Dual Active (DSDA) technology for connected cars and autonomous driving features, taking its steps forward into the Society of Autonomous Engineers (SEA's) Level 4 Autonomous driving technology sometime soon in the future.

Telematics Market Report - Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumptions and Market Definition

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET DYNAMICS

    1. 4.1 Market Overview

    2. 4.2 Market Drivers

      1. 4.2.1 Rise in Connected Devices

      2. 4.2.2 Huge Demand of Easy Vehicle Diagnostics

    3. 4.3 Market Restraints

      1. 4.3.1 Threat of Data Breaches

      2. 4.3.2 High Costs Associated With Installations

    4. 4.4 Industry Value Chain Analysis

    5. 4.5 Industry Attractiveness - Porter's Five Forces Analysis

      1. 4.5.1 Threat of New Entrants

      2. 4.5.2 Bargaining Power of Buyers

      3. 4.5.3 Bargaining Power of Suppliers

      4. 4.5.4 Threat of Substitute Products

      5. 4.5.5 Intensity of Competitive Rivalry

    6. 4.6 Assessment of COVID-19 impact on the market

  5. 5. MARKET SEGMENTATION

    1. 5.1 By Channel

      1. 5.1.1 Original Equipment Manufacturers (OEM)

      2. 5.1.2 Aftermarket

    2. 5.2 By Solution

      1. 5.2.1 Smartphone

      2. 5.2.2 Portable

      3. 5.2.3 Embedded

    3. 5.3 By Offering Type

      1. 5.3.1 Hardware

      2. 5.3.2 Services (Entry-level, Mid-tier, High-end)

    4. 5.4 By Geography

      1. 5.4.1 North America

      2. 5.4.2 Europe

      3. 5.4.3 Asia Pacific

      4. 5.4.4 Latin America

      5. 5.4.5 Middle East and Africa

  6. 6. COMPETITIVE LANDSCAPE

    1. 6.1 Company Profiles

      1. 6.1.1 Mix Telematics

      2. 6.1.2 AT&T Inc.

      3. 6.1.3 Geotab Inc.

      4. 6.1.4 Verizon Telematics

      5. 6.1.5 Cisco Systems Inc.

      6. 6.1.6 Aplicom Oy

      7. 6.1.7 Microlise Ltd

      8. 6.1.8 LG Electronics Inc.

      9. 6.1.9 Trimble Inc.

      10. 6.1.10 Ctrack Global (Inseego Corp. Company)

    2. *List Not Exhaustive
  7. 7. INVESTMENT ANALYSIS

  8. 8. MARKET OPPORTUNITIES AND FUTURE TRENDS

**Subject to Availability
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Telematics Market Research FAQs

The Telematics Market is studied from 2018 - 2028.

The Telematics Market is growing at a CAGR of 17.85% over the next 5 years.

Asia Pacific is growing at the highest CAGR over 2018 - 2028.

North America holds highest share in 2021.

AT&T Inc., Geotab Inc., Cisco Systems Inc., Verizon, MiX Telematics are the major companies operating in Telematics Market.

Telematics Industry Reports

In-depth industry statistics and market share insights of the Telematics sector for 2020, 2021, and 2022. The Telematics research report provides a comprehensive outlook of the market size and an industry growth forecast for 2023 to 2028. Available to download is a free sample file of the Telematics report PDF.

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