Automotive Telematics Market - Industry Dynamics, Market Size, And Opportunity Forecast To 2031

Market Overview

The global automotive telematics market size is estimated to grow from US$ 50.90 billion in 2022 to US$ 251.05 billion by 2031 at a CAGR of 19.4% during the forecast period 2023-2031. On the other hand, the volume is projected to grow at a CAGR of 18.5% during the forecast period. 

Today, a vehicle is equipped with around 30 to 90 electronic modules controlling diverse systems, from airbags to seating positions to brakes and entertainment. Automotive telematics is a technology that combines GPS systems, onboard vehicle diagnostics, wireless telematics devices, and black box technologies to record and transmit vehicle data, such as speed, location, maintenance requirements and servicing, and cross-reference this data with the vehicle’s internal behavior. Most of the telematics technology is being used in making smart vehicles for monitoring location, the behavior of vehicle or fleet of vehicle, remote control access, and many more. Thus, telematics is opening the road to smart transportation, bringing autonomous driving closer to reality. 

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Market Dynamics 

Drivers

• One of the key drivers is the increase in demand for connected vehicles. With connected vehicles, drivers have access to a wealth of information and services that can make their driving experience more efficient and convenient.
• Another key driver of the automotive telematics market is the increasing adoption of smartphones and other mobile devices. With more people using these devices, there is a greater need for data connectivity and access to information while on the go. Telematics systems provide this connectivity and allow users to access a variety of services such as navigation, traffic information, and roadside assistance.
• Increasing awareness about the benefits of telematics is also driving market growth. As people become more aware of the potential advantages of using telematics systems, they are more likely to purchase vehicles that are equipped with these systems.
• Finally, favorable government initiatives are also playing a role in promoting the growth of the automotive telematics market. In many countries, there are initiatives in place to encourage the adoption of telematics technologies in order to improve road safety and reduce traffic congestion. These initiatives are expected to have a positive impact on the market over the coming years.

Challenges 

• High cost of hardware and installation: Currently, the cost of automotive telematics hardware and installation can be quite high, which acts as a barrier to entry for many consumers. This needs to come down significantly if the market is to grow.
• Data security and privacy concerns: With so much personal data being collected and stored by automotive telematics systems, there are legitimate concerns about security and privacy. These need to be addressed in order for people to feel comfortable using these systems.
• Lack of standardization: There is currently no standardization in the automotive telematics industry, which can make it difficult for consumers to compare different products and services. This needs to be addressed in order to make the market more accessible.

Key Takeaways from the Global Automotive Telematics Market 

• Hardware segment dominated the global automotive telematics market in 2022. The segment further categorized into self-contained telematics units and GPS devices. Wherein, the self-contained telematics unit generated the largest revenue in the market.
• By application, vehicle tracking/recovery (fleet management) segment was leading revenue contributor to the market in 2022 as it allows user to locate company vehicles on-demand, gather and store engine error codes and detect dangerous driver habits such as speeding, harsh braking, and idling.
• By vehicle type, heavy vehicles segment is projected to grow at the fastest CAGR during the forecast period. The market growth is supported by Increasing number of countries that are mandating deployment of vehicle tracking in commercial vehicles and rising demand for smartphones supplements the adoption of telematics solutions and services.

OEM to Generate Higher Revenue in Global Automotive Telematic Market 

By sales channel, OEMs held the highest share in the global automotive telematics market in 2021. This is attributed to the need for automakers to offer value-added services and differentiate their vehicles from those of their competitors. In addition, OEMs are able to generate revenue from subscription fees charged for access to connected services. 

OEM provides integrated sensors and capabilities that can deliver a high degree of data related to vehicle operation at minimal cost. OEMs are increasingly being preferred across the globe, mostly in the U.S., Europe and Russia, for its features like automatic emergency calls and vehicle location identification.

The OEMs segment comprises corporations that design, develop, produce, and market vehicles such as passenger cars, light commercial vehicles, trucks, buses, and two-wheelers. These OEMs install telematics units in their vehicles during production. Automotive OEMs are investing in Research and Development (R&D) activities to develop new telematics solutions for their customers. Automotive telematics solutions offered by OEMs are gaining popularity among end-users due to their better quality, durability, and reliability.

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Regional Analysis 

Asia Pacific is holding the lion’s share in the global automotive telematics market and is expected to continue its dominance during the forecast period. With regulations and policies related to the safety of vehicles and adoption of advanced technology, the regional market is expected to grow at the fastest CAGR.

Some of the key factors driving this rapid market growth include the increasing need for real-time data analytics and communication in connected and autonomous vehicles, as well as the growing awareness of the safety and efficiency benefits offered by telematics systems. In addition, government initiatives such as mandatory e-call systems for new cars in Europe and China's Intelligent Connected Vehicles (ICV) mandate are also expected to play a role in boosting market demand. Looking ahead, the Asia Pacific region is expected to remain the global leader in automotive telematics market growth, with Astute Analytica forecasting that the number of connected vehicles will reach 352 million by 2023.

List of Key Companies Profiled:

• Robert Bosch GmbH
• Continental AG​
• LG Electronics
• Verizon
• Harman International
• Delphi Automotive Plc
• Visteon Corporation​
• Magneti Marelli S.P.A.​
• Tomtom International BV
• Qualcomm Technologies Inc.
• Intel Corporation
• Trimble Inc
• AT&T
• Octo Telematics
• Airbiquity Inc.
• Masternaut Limited
• The Descartes Systems Group Inc.
• Box Telematics
• Act Soft
• Other Prominent Players

As per our latest findings and extensive research, it is found that big players are investing heavily primarily in product development and collaboration with the automotive OEMs to have capture a higher market share. Apart from this, some of them are expanding their geographical reach by acquiring small brands and domestic companies.

Segmentation Overview

(Note*: We also provide granular level reports, made to sub-segment level or only for niche segments. Contact us, if you require more details.)

By Component segment:

• Hardware
  • Self-contained Telematics Units (TCU)
  • GPS Devices
• Software Platform
• Services
  • Consulting
  • Implementation
  • Maintenance
  • Telematics as a Service

By Application:

• Automatic Crash Notification
• Billing Services
• Driver Behavior
• Emergency Calling
• Insurance Risk Assessment
• Navigation
• On-Road Assistance
• Remote Diagnostics
• Vehicle Tracking/Recovery (Fleet Management)
• Others

 By Vehicle Type:

• Light Commercial Vehicles
• Passenger Car
  • Electric Vehicles
  • ICE Vehicles
• Heavy Vehicles
• Two-Wheeler
• Others

By Connectivity:

• Satellite
• Cellular

By Sales Channel:

• Aftermarket
• OEMs

By Region:

• North America
  • The U.S.
  • Canada
  • Mexico
• Western Europe
  • The UK
  • Germany
  • France
  • Italy
  • Spain
  • Rest of Western Europe
• Eastern Europe
  • Poland
  • Russia
  • Rest of Eastern Europe
• Asia Pacific
  • China
  • India
  • Japan
  • Australia & New Zealand
  • ASEAN
  • Singapore
  • Malaysia
  • Indonesia
  • Vietnam
  • Thailand
  • Myanmar
  • Rest of ASEAN
  • Rest of APAC
• Middle East & Africa (MEA)
  • UAE
  • Saudi Arabia
  • South Africa
  • Rest of MEA
• South America
  • Argentina
  • Brazil
  • Rest of South America