COMMERCIAL TELEMATICS MARKET ANALYSIS

Global commercial telematics was valued at US$ 47.83 Billion in 2022 and is expected to grow at a CAGR of 16% during the forecast period of 2023-2030. Commercial telematics refers to the use of communications and informatics in the field of commercial vehicles. This includes the integration of various technologies such as GPS (Global Positioning System), vehicle tracking systems, communication devices, sensors, and data analytics to monitor and manage commercial fleets. Commercial telematics provides real-time information and insight into vehicle location, speed, fuel economy, driver behavior, and vehicle diagnostics. This data is sent to a central system where it is analyzed to optimize fleet operations, improve driver safety, reduce fuel costs, improve maintenance schedules, and increase overall efficiency.

Global Commercial Telematics Market: Regional Insights

North America is one of the leading regions in terms of commercial telematics market adoption. In the United States and Canada, the market grew significantly due to factors such as stringent regulations, the need for vehicle optimization, and increased demand for advanced connectivity solutions. Several telematics service providers and original equipment manufacturers (OEMs) are active in the region, offering a wide range of services to commercial vehicle operators.

Europe is another important market for commercial telematics, driven by factors such as the presence of established car manufacturers, regulatory requirements, and a focus on road safety and efficiency. Countries such as Germany, Great Britain, France, and Italy have been pioneers in the introduction of telematics. In addition, the European Union's eCall initiative, which requires new vehicles to be equipped with an emergency call system, is further accelerating the growth of telematics in the region.

In the Asia-Pacific region, commercial telematics market is growing rapidly, mainly in countries such as China, Japan, South Korea, and India. Increased industrialization, urbanization, and growth in the e-commerce sector are increasing the demand for fleet management solutions and logistics optimization. Additionally, governments in the region are focusing on improving traffic safety and efficiency, further supporting the adoption of commercial telematics.

Latin America is slowly adopting commercial telematics market, albeit slower than North America and Europe. Countries such as Brazil and Mexico are seeing increased adoption due to growth in the logistics and transportation industry. Growing concerns about vehicle theft and the need for vehicle optimization are driving the market in the region.

The Middle East and Africa region is also seeing steady growth in commercial telematics market. Countries such as the United Arab Emirates and South Africa have seen significant adoption rates. Factors such as the expansion of the logistics and transportation sector, growing awareness of fleet management solutions, and government initiatives to improve road safety have all contributed to the growth of the market in the region.

Figure 1: Global Commercial Telematics Market Share (%), By Region, 2022

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Global Commercial Telematics Market Drivers:

Rise in trend of connectivity solutions

Smartphones have changed the definition of connectivity over time. People want to stay connected to the outside world while traveling. As connectivity becomes the need of the day, automakers are integrating connectivity solutions into their vehicles to boost vehicle sales. Consumers expect cars to perform tasks similar to computers and smartphones. Integrating connectivity solutions into vehicles is a top priority for car manufacturers. Modern automobiles incorporate many connectivity solutions. They require Internet services to perform their respective functions. Connectivity can be provided inside the vehicle through embedded, integrated, or tethered connectivity solutions. The automotive industry is on the cusp of a digital revolution. In the next few years, the car will completely transform into an object of communication. For instance, on August 2, 2021, Bridgestone Corporation is a Japanese multinational tire manufacturer that acquired Fleet Management Software Provider Azuga  a leading global connected vehicle platform to accelerate mobility solutions business Bridgestone Americas (Bridgestone), With this acquisition, Bridgestone will accelerate its efforts to develop and deploy sustainable mobility solutions as a core part of its progressive mobility strategy. The transaction has been approved by the boards of directors of both companies and is expected to close by the end of the third quarter

Ease of vehicle diagnosis

Advanced diagnostic systems are expected to drive the growth of the commercial telematics market. In-vehicle systems with advanced diagnostic capabilities provide vehicle data to both auto dealers and customers to help predict potential vehicle problems before they occur. For fleet management, connected solutions make it easier to track vehicle records, determine which vehicles have traveled the furthest, and provide service accordingly. The diagnostic service provided is an efficient way to diagnose the condition of your vehicle. This gives consumers control over vehicle maintenance, saving money and time by avoiding unnecessary costs and breakdowns. The system provides consumers with maintenance schedules and timely reminders. A diagnostic system tracks the vehicle's smoke emissions and fuel consumption, thereby monitoring the condition of the engine. This service sends detailed reports about vehicles to decision-makers who determine vehicle maintenance schedules. Therefore, the simplification of vehicle diagnostics using mobile applications is expected to drive market growth.

Global Commercial Telematics Market Opportunities:

Intelligent transportation system

Safety services provided by vehicles equipped with telematics solutions are a good example of cutting-edge aftermarket technology that exchanges data between vehicles and humans. Safety combines communications and automotive technologies designed to improve vehicle efficiency, reduce fuel consumption and maintenance costs, enhance safety measures, and improve the overall driving experience for drivers. It's a thing. Capabilities such as live traffic updates, automated fare transactions, insurance telematics, roadside assistance during accidents and breakdowns, and intelligent routing and tracking provide significant growth opportunities for the major players in the commercial telematics market.

Improved performance of autonomous vehicles

There are several solutions on the market that collect, manage, study, interpret, and analyze driving data for a given driver. Vehicles equipped with telematics systems generate enormous amounts of data every minute, improving the customer experience and creating new business opportunities in the field of autonomous driving. 

Global Commercial Telematics Market Trends:

Connected Vehicles and IoT Integration

The integration of commercial telematics into connected cars and the broader Internet of Things (IoT) ecosystem is an important trend. Telematics systems are becoming more sophisticated with vehicle-to-vehicle (V2V) and vehicle-to-vehicle (V2I) communication capabilities. This integration enables seamless data exchange between vehicles, fleet management systems, and other IoT devices, facilitating improved fleet management, predictive maintenance, and advanced analytics. 

Advanced Analytics and Artificial Intelligence (AI)

Commercial telematics solutions are increasingly integrating advanced analytics and Artificial intelligence (AI) technologies to process the large amounts of data collected from vehicles. Machine learning algorithms can analyze this data to derive meaningful insights, identify patterns, and predict outcomes. AI-powered capabilities such as driver behavior monitoring, predictive maintenance, and route optimization are gaining traction, enabling companies to make data-driven decisions and improve operational efficiency. By combining telematics data with AI-driven predictive analytics, organizations can anticipate maintenance needs and proactively address potential issues. Machine learning algorithms can analyze vehicle performance data, detect anomalies, and predict when maintenance or repairs will be required. This allows fleet managers to plan maintenance activities, reduce downtime, and prevent costly outages.

Global Commercial Telematics Market- Impact of COVID-19

The COVID-19 pandemic has had a significant impact on the global commercial telematics market. COVID-19 has disrupted global supply chains and created challenges for the logistics and transportation sectors. Lockdown measures, border restrictions, and a reduction in available labor have impacted the movement of goods and created logistical complexities. Commercial telematics has played a key role in alleviating these disruptions by providing real-time insight into fleet operations, optimizing routes, and enabling efficient delivery of critical goods. The rise of e-commerce and the need for contactless delivery during lockdowns have significantly increased the demand for last-mile delivery services. Commercial telematics systems have enabled companies to optimize delivery routes, track vehicles in real-time, and efficiently manage last-mile operations. The ability to adapt quickly and improve delivery capacity became critical during the pandemic, and telematics solutions supported those efforts.

Global Commercial Telematics Market Restraints:

Threat of data hacking

Telematics is a relatively new technology. Events such as unauthorized access to multiple in-vehicle connectivity solutions and intrusion into in-vehicle connectivity systems can limit the commercial telematics market. The biggest security risk is hackers gaining access to car's computer systems and the data they collect and store. Hence, the threat of hacking vehicles equipped with telematics systems is one of the factors expected to hamper the growth of the market.

High installation cost

The additional cost of providing in-vehicle connectivity is expected to slow the growth of the commercial telematics market. By offering in-vehicle connectivity solutions, consumers incur additional costs in the form of hardware, connectivity solutions, and communication service charges. These additional costs borne by consumers have a significant impact on the commercial telematics market. Therefore, the high installation cost of commercial telematics systems is expected to hinder the market.

Figure 2: Global Commercial Telematics Market Share (%), By Sales Channel, 2022

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Global Commercial Telematics Market Segmentation: By Sales Channel

OEM

OEM stands for Original Equipment Manufacturer. In the context of commercial telematics, OEMs are vehicle manufacturers who integrate telematics systems into their vehicles during the manufacturing process. These OEMs either work with telematics service providers or develop their telematics solutions to provide connectivity and data-driven services to their customers. Several original equipment manufacturers (OEMs) play an important role in providing telematics solutions and services in the global commercial telematics market. These OEMs often work with telematics service providers to integrate telematics systems into their vehicles.

Aftermarket

Based on solution type, the aftermarket segment has historically dominated the market and will continue to do so during the forecast period for the global commercial telematics market. The term "aftermarket" refers to the market for products and services offered after an original equipment manufacturer (OEM) has sold a vehicle or equipment. Aftermarket includes a wide range of products, parts, accessories, and services designed to improve, replace or modify the original equipment.

Global Commercial Telematics Market: Key Developments

September 26, 2022–Verizon Communications Inc., an US multinational telecommunications company and constituent of Dow Jones, has announced a new EV feature in VerizonConnect designed specifically for electric vehicles. New enhancements to Verizon Connect Reveal help fleet-based companies plan how to make more informed decisions about EV planning, investment and management.

On December 05, 2022-MiX Telematics a leading global SaaS provider of connected fleet management solutions, announced an extensive update to its powerful video telematics offering. MiX Telematics has offered an integrated video and fleet telematics solution since 2014 and introduced a new MiX Vision AI dashcam solution in 2021 to provide advanced safety and fatigue solutions to customers across the globe.

On May 4, 2022 - OCTO Telematics, OCTO Fleet Essentials a leading provider of telematics services and advanced data analytics, fleet telematics and intelligent mobility for the insurance industry, has announced the launch of an innovative intelligent digital solution. Optimize safety, cost and overall sustainability quickly and easily.

Global Commercial Telematics Market: Key Companies Insights

The commercial telematics market is highly competitive. This is attributed to the continuous launch of new technologies due to ongoing R&D and efforts by value chain participants. Moreover, key players are adopting various business growth strategies in order to expand their presence on a regional as well as global basis.

Some of the key players in the global commercial telematics market are Verizon Communications Inc., AT&T Inc., TomTom N.V., MiX Telematics Limited, OnStar Corporation, Bayerische Motoren Werke AG (BMW), Trimble Inc., Zonar Systems, Inc., Omnitracs LLC, Inseego Corporation, AirIQ Inc., Bridgestone Corporation, General Motors Company (GM), Geotab Inc., Michelin Group, Octo Telematics S.p.A., Omnitracs, LLC, Tri, Bell Atlantic Corporation, and Continental AG

*Definition: “Commercial telematics is the integration of telecommunications and information technology into commercial vehicles to improve fleet management, increase operational efficiency, and provide a range of value-added services. Telematics systems use various technologies such as global positioning system (GPS), mobile networks, sensors, and data analytics to collect and transmit real-time data on vehicle location, performance, driver behavior, and other relevant metrics.”