Definition

Vehicle telematics is expected to play a very major role when we talk about the future of mobility. Vehicle telematics can be defined as the system which helps the vehicle communicate with its environment using embedded or tethered networks. It is a method of monitoring a vehicle using GPS and onboard diagnostics.

Market Analysis

The adoption of telematics in the automotive industry is expected to increase in coming years. This can be attributed to two major reasons, first is the increasing government's willingness to mandate specific telematics services, such as E-call capabilities, which is already happening in the European Union and Russia. Second is the increasing demand from consumers for greater connectivity and intelligence in their vehicles.

The urge to attain full autonomy along with developments happening in the field of vehicle connectivity to increase safety and security along with the convenience of vehicle owners is driving the vehicle telematics market. Amazon teamed up with two automotive giants, General Motors and Volvo to launch a new delivery model. Amazon will be delivering packages directly into the trunk of the car using embedded connected vehicle telematics technology such as Onstar for accessing the vehicle trunks. This way Amazon plans to give a never before delivery experience to its clients.

To sum up, vehicle telematics is expected to have a lot of impact on the automotive industry and human life in many different ways. With the help of telematics people will be able to monitor their car's health, call their neurons, have meetings in cars, and automotive companies are also planning to achieve autonomous vehicle technology with the help of telematics. Vehicle telematics can help achieve fuel savings and reduce emissions by tracking vehicle routes and optimizing vehicle and driver perfromace by tracking them.

Type Segment

The vehicle telematics market by type has been segmented into the type of telematics services and type of telematics solutions provided in the market. The telematics solutions dominated this segment as compared to telematics services. Telematics can be used to track vehicles, trailers, monitor driver behavior and record journeys. Which can be used further by fleet management companies to improve fleets efficiency and even the data generated can also be used by insurance companies to assess the driving behavior of the driver, determine the risk factor and adjust their premium accordingly. The solutions segment occupied about 79% of the market share in 2017 as compared to services segment which occupied only 21% of market share in 2017.

Product Segment

The vehicle telematics market by product has been segmented into telematics software and telematics hardware. In 2017 telematics hardware occupied about USD 34.66 billion of market value as compared to telematics software which contributed only about 16.8% of the entire market. With a growing need for improving connectivity and safety & security of vehicles. The amount of hardware and software going in vehicles is expected to increase tremendously in the coming years. The software segment is expected to grow at a faster CAGR as compared to the hardware segment in the product segment.

Bandwidth Segment

Different types of bandwidths considered in the report are 2G/2.5G, 3G, and 4G. With the advancements in automotive technology and telecom industry, the bandwidths have also elevated. In early 2014, 2G/2.5G bandwidth was most widely used in automotive applications, but slowly the shift towards 3G. Thereafter, further advancement and growing involvement of features requiring high connectivity increased the shift towards 4G bandwidth. In 2017 the 3G bandwidth covered about 52.7% of market share as it makes use of GPS, mobile television and video conferencing easier as compared to 2G. Due to lack of infrastructure availability and high cost, 4G technology has not been implemented to the extent of 3G technology in automotive devices. In 2017 4G bandwidth had a market share of 23.4% globally but it is expected to increase during the forecast period and gain a market share of 63.1% by 2025.

The global vehicle telematics market was dominated by North America and Europe in 2017. The market share occupied by North America and Europe in 2017 was 35.2% and 33.3% respectively. With increasing awareness about the benefits of implementing telematics in automobiles has led to an increase in offerings of telematics solutions and services in North America and Europe. Apart from increased road safety, improved driving behavior, and alignment of vehicle insurance premiums with vehicle driving behavior vehicle telematics also help governments, corporations, and individuals in achieving improved fuel efficiency, real-time vehicle tracking, vehicle maintenance alerts, and routing.

Growing commercial vehicle sales in the US is expected to boost the demand for vehicle telematics solutions as well. The growing fleet management market and growing competition among OEM’s to launch a fully operational autonomous vehicle has led to increasing adoption of telematics in automobiles in the US and other developed nations such as UK, Spain, Germany, Canada, and China. In 2017 the market size of the US automobile telematics market was USD 12.03 billion.

The telematics market in Europe is expected to grow rapidly after 2018, due to the new regulation mandating E-call in all the vehicles. A similar mandate has been followed in Russia hence the Russian market for telematics is also expected to increase post-2018. In 2017 the European vehicle telematics market was USD 13.86 billion. UK, Germany, and France are expected to lead the European Union in telematics adoption race.

Asia Pacific is expected to have the fastest growth rate growing at a CAGR of 26.3% for the telematics market with presence to emerging markets such as China, India, Japan, and other countries. China is projected to lead the Asian market for telematics followed by South Korea, and Japan respectively. Few of the famous telematics units in China according to Adroit Market Research analysis are Onstar of GM, SYNC of Ford and Honda Link of Honda. These are the dominating telematics products offered by OEM’s in China.