Automotive Telematics Market

Automotive Telematics: A Game-Changer for the Automotive Industry

Automotive telematics is a technology that integrates telecommunications and informatics to provide information and services to drivers and passengers of vehicles. This technology is rapidly transforming the automotive industry by improving vehicle safety, reducing fuel consumption, enhancing driver experience, and providing valuable data for businesses.

One of the key benefits of automotive telematics is its ability to improve vehicle safety. Telematics systems can detect and alert drivers of potential hazards on the road, such as sudden braking or swerving. This can help prevent accidents and reduce fatalities on the road. In addition, telematics can also help track stolen vehicles, increasing the likelihood of recovery.

Another advantage of automotive telematics is its ability to reduce fuel consumption. Telematics systems can monitor a vehicle's speed, acceleration, and braking patterns to optimize fuel efficiency. This not only helps drivers save money on fuel costs, but it also reduces emissions, making it an eco-friendly solution.

Automotive telematics also enhances the driver experience by providing real-time traffic information, weather updates, and entertainment options. Drivers can stay connected and entertained during long drives, making the journey more enjoyable.

Finally, businesses can benefit from automotive telematics by using the data generated by these systems to optimize their operations. Telematics can provide valuable insights into driver behavior, vehicle performance, and fuel consumption patterns. This data can be used to improve logistics and route planning, reduce maintenance costs, and increase productivity.

Dynamics of Automotive Telematics Market

Drivers in Automotive Telematics Market

The automotive telematics market is driven by various factors, including the growth in entertainment, safety & security, and navigation services. Safety is a primary concern due to the increasing congestion and traffic on roads, leading to extensive development and incorporation of advanced features in telematics solutions. The enhancement of ADAS features in cars is the primary driver for the telematics solutions market as these features ensure improved levels of safety. Additionally, governments in various countries are mandating various ADAS and safety features, leading to an increased demand for telematics solutions.

The demand for other telematics services, such as automatic crash notification, on-road assistance, and driver behavior, is also increasing, which is estimated to drive the telematics solutions market. The rise in demand for connected, autonomous, and intelligent technologies in vehicles is driving the global automotive telematics market, primarily for fleet management and vehicular tracking. Furthermore, automotive telematics companies are developing new cloud technologies to securely manage vehicle data, leading to an increase in demand for telematics solutions.

Restraints in Automotive Telematics Market

However, the lack of standardization in telematics is a significant restraint for the market. Software and system developers face multiple issues accessing relevant data related to vehicles due to the absence or misrepresentation of critical information. This is because of the lack of standardization and interoperability metrics in devices produced by different manufacturers. Additionally, the usage of information technologies is divided into several interrelated stages, leading to the potential inefficiency of the system due to any errors while integrating these stages of information technologies. Hence, the standardization of several hardware devices, platforms, and protocols for efficient exchange of desired information is a challenge that needs to be addressed during the forecast period.

Opportunities in Automotive Telematics Market

The future potential of 5G and AI offers a range of opportunities for the automotive industry. Wireless connectivity is crucial for telematics solutions, and the development of 5G by many telecom industry players is set to increase safety and efficiency. With low latency and the ability to build 1 million connections per square km, 5G can offer 99.9% reliability, making V2V and V2I connectivity faster and more efficient than previous network generations. The use of a wide range of radio spectrum frequencies also allows for more connections without interference.

As the use of telematics solutions continues to grow, the automotive industry has seen an explosion in the use of AI. Machine learning used to implement AI is expected to grow at the fastest rate than other technologies in the sector, with various applications such as speech and gesture recognition, driver monitoring, and engine control units.

The integration of IoT into vehicles is also increasing vehicle efficiency and safety, with telematics capabilities becoming increasingly popular among consumers. Third-party and aftermarket service providers are also developing solutions for the automotive industry, with a focus on reducing operating costs and achieving sustainability goals.

The emergence of Industry 4.0 has led to the adoption of telematics systems such as vehicle tracking, fleet management, and vehicle safety communication. The expansion of 5G technology has enabled rapid and real-time data transmission, fueling the demand for autonomous technologies. OEMs are also focused on transforming production processes to become customer-centric, efficient, and flexible, which is expected to drive the automotive telematics market in the future.

The need for safety during fleet operations is also driving the demand for telematics systems, with emergency warning systems, GPS navigation, and autonomous driving assistance improving driver and cargo safety. The launch of new telematics solutions, such as Geotab's integrated solution for General Motors, has also helped fleet managers gain access to vehicular data and improve their fleet management system.

Challenges in Automotive Telematics Market

Although there have been significant advancements in telematics solutions, cybersecurity remains a major challenge that needs to be addressed. Telematics solutions involve hardware, software, mobile apps, and Bluetooth, each of which can be vulnerable to hacking and cyberattacks. There have been numerous instances where cybersecurity breaches have caused serious problems for customers, companies, and governments. For instance, two researchers attacked Chrysler jeep, which resulted in the company recalling and upgrading the software of 1.5 million vehicles across various countries. In response, regulators are developing minimum standards for vehicle software and cybersecurity. For instance, the European Data Act, which was introduced in 2022, applies to connected and autonomous vehicle testing and deployment, requiring them to meet certain industry standards for cybersecurity. The Act also provides regulations on how companies can access and use data, especially non-personal data. Under the new rules, drivers can request that any data generated on the performance of their vehicle be sent to a repair shop of their choice, potentially reducing the cost of services.

Telematics systems rely on a cloud-based telematics server, which comprises a web server, application server, and database. The TCU collects information that is then sent to the cloud-based telematics server via a GPRS/cellular network over HTTPS. End users can access the data stored in the telematics server using either a desktop or mobile application. The growth of the automotive telematics market is driven by several factors, including the integration of real-time fleet monitoring systems in vehicles, increasing use of cloud-based technology, and government regulations for vehicle telematics. Additionally, the ease of vehicle diagnosis due to telematics systems is a significant growth factor. However, the threat of data hacking, high installation costs, and lack of seamless internet connectivity hinder market growth. Nonetheless, the market presents significant opportunities for growth, including the development of intelligent transportation systems, improved performance of autonomous vehicles, and enhanced business decisions for fleet owners.

Ecosystem of Automotive Telematics Market

The automotive telematics market ecosystem is composed of raw materials suppliers, component/part manufacturers, telematics solution providers, and original equipment manufacturers (OEMs). Telematics is a method of monitoring vehicles and assets by using connected technologies to track their position, condition, wear and tear, and movements. Telematics manufacturers and system integrators obtain hardware and software from suppliers and design telematics solutions based on OEM requirements, which OEMs then directly deploy and install in their vehicle models.

The maintenance segment is expected to experience the fastest growth in the automotive telematics market during the forecast period due to the increasing adoption of telematics systems worldwide. The maintenance market enables seamless operation of platforms by providing long-lasting systems and platforms while identifying and eliminating safety hazards. North America is expected to lead the market due to the high usage of telematics services in commercial vehicles and government mandates such as the electronic logging device (ELD) mandate for commercial vehicles in the US.

During the forecasted period, cellular connectivity is expected to dominate the automotive telematics market. The growth of cellular connectivity in automotive telematics is due to various disruptive factors such as the government's push for 5G, increasing cellular connectivity in the Asia Pacific regions, and the growth of cloud-based services. Many cellular telematics services are more affordable than satellite-based connectivity solutions, making them a more attractive option. Increasing internet penetration, the introduction of 5G, and government regulations are also contributing to the growth of cellular connectivity. In the longer run, it is expected that India and China will drive the rise in the use of cellular connectivity solutions for vehicles, making it the leading market for cellular telematics globally.

The global automotive telematics market has been divided into three segments based on technology: embedded, tethered, and integrated. The integrated segment is expected to have the largest market share due to the increased adoption of telematics systems in Europe and North America. Premium and mid-segment vehicle manufacturers are integrating telematics systems into their vehicles, and OEMs prefer integrated technologies over embedded ones.

Regarding application, the global automotive telematics market has been classified into vehicle tracking, fleet management, satellite navigation, vehicle safety communication, and others. During the forecast period, the vehicle tracking segment is expected to dominate the market. Modern vehicles have telematics vehicle tracking as a basic feature, and fleet operators and ride-sharing companies rely on it to carry out their operations. The ride-sharing and car rental services market's expansion is expected to increase the segment in the coming years. The demand for telematics in car insurance is being driven by an increase in vehicle theft cases. According to Interpol's latest available data from 2019, approximately 90,000 vehicles were reported stolen worldwide.

During the forecast period, the Asia Pacific region is expected to dominate the global automotive telematics market. The rise in adoption of 5G services, expansion of the connected car devices market, and increased investments in road infrastructure are driving the market growth worldwide. Consumers are increasingly aware of the safety of vehicles, which has led major OEMs to add infotainment systems and enhanced safety and security features to their mid-range vehicles. Countries in Asia Pacific, such as China, India, and others, are making significant investments in telecommunication and road infrastructure, further fueling market growth.

Although Europe and North America are highly developed regions in the market, they have a smaller consumer base and lower vehicle production, placing them below Asia Pacific in terms of revenue generation. The market in Europe is driven by the growth of the road safety market and the implementation of various road safety regulations in the region. As of July 2022, all new vehicles in the EU, including passenger cars and utility vehicles, must be fitted with a 'black box' to record technical data, but not yet for two-wheeled motor vehicles.

Dominating Companies in Automotive Telematics Market

• ROBERT BOSCH GMBH
• AT&T INC.
• CONTINENTAL AG
• LG ELECTRONICS
• VERIZON
• HARMAN INTERNATIONAL CORPORATION
• APTIV PLC
• VISTEON CORPORATION
• MAGNETI MARELLI CK HOLDINGS CO., LTD.
• WEBFLEET SOLUTIONS
• INTEL CORPORATION
• ASTRATA EUROPE BV
• PANASONIC CORPORATION
• GARMIN, LTD.
• MIX TELEMATICS
• TRIMBLE INC.
• AIRBIQUITY INC.
• CALAMP CORP.
• THE DESCARTES SYSTEMS GROUP INC.
• QUALCOMM TECHNOLOGIES INC.
• AIRIQ INC.
• ACTSOFT INC.
• TELETRAC NAVMAN US LTD.
• MASTERNAUT LTD.
• OCTO TELEMATICS
• BOX TELEMATICS LIMITED
• Agero Inc
• Clarion Co., Ltd.
• Delphi Technologies
• Denso Corporation
• Embitel Technologies
• Luxoft
• Inseego Corp.
• Microlise Limited
• NTT Docomo Inc.
• Omnitracs, LLC
• TomTom International B.V.
• Valeo

Recent Developments in Automotive Telematics Market

• In 2021, TomTom, a leading provider of navigation and mapping solutions, announced that it had entered into an agreement to sell its telematics business to Bridgestone Europe NV/SA, a subsidiary of Bridgestone Corporation. The acquisition is expected to help Bridgestone expand its digital mobility solutions and connected services offerings.
• In 2020, Verizon Communications Inc. announced that it had completed the acquisition of BlueJeans Network, a leading provider of video conferencing solutions. The acquisition is expected to help Verizon enhance its telematics offerings by integrating BlueJeans' video conferencing technology into its fleet management platform.
• In 2019, Trimble Inc., a leading provider of GPS technology, announced that it had acquired Kuebix, a cloud-based transportation management system provider. The acquisition is expected to help Trimble expand its transportation and logistics offerings, including its telematics solutions.
• In 2019, Geotab, a leading provider of telematics solutions for fleet management, announced a partnership with Ford Motor Company. The partnership is expected to help Geotab expand its reach into the automotive market by integrating its telematics solutions with Ford's vehicles.
• In 2018, Continental AG, a German automotive manufacturing company, announced that it had acquired Kathrein Automotive GmbH, a leading provider of automotive telematics and connectivity solutions. The acquisition is expected to help Continental enhance its telematics offerings by integrating Kathrein's connectivity technology into its existing platform.
• In 2021, Verizon announced the acquisition of a startup called Skyward, which provides drone operations management software. The acquisition is expected to help Verizon expand its telematics offerings and create new opportunities for businesses to leverage drones for delivering goods and services.
• In 2020, Aptiv and Hyundai Motor Group announced the formation of a joint venture called Motional. The partnership aims to develop and commercialize driverless vehicle technology, and bring fully autonomous vehicles to market by 2022.
• In 2020, Microsoft and TomTom announced a partnership to bring TomTom's maps, traffic data and navigation software to Microsoft's Azure cloud computing platform. The partnership aims to help automakers create smarter, more connected cars.
• In 2019, Geotab, a telematics provider, acquired BSM Technologies, a provider of GPS fleet tracking and telematics solutions for government and enterprise fleets. The acquisition expands Geotab's presence in the North American market and strengthens its position as a leader in telematics solutions.
• In 2019, BMW and Daimler announced a joint venture to develop autonomous driving technology. The partnership aims to create a scalable platform that can be used by multiple automakers, and accelerate the development of autonomous driving technology.
• In 2018, Continental, a German automotive supplier, acquired Argus Cyber Security, an Israeli cybersecurity firm specializing in automotive security. The acquisition aims to strengthen Continental's capabilities in protecting vehicles from cyber attacks, as connected cars become increasingly prevalent.

In conclusion, automotive telematics is a game-changer for the automotive industry. It provides numerous benefits, including improved vehicle safety, reduced fuel consumption, enhanced driver experience, and valuable data for businesses. As technology continues to advance, we can expect to see even more innovative solutions in the field of automotive telematics.