Automotive Telematics Market Share, Industry Analysis [2031]

Report Description

The global automotive telematics market size was USD 8.8 bn in 2022 and is estimated to reach USD 24.60 bn by 2031, expanding at a CAGR of 12.1% during 2023–2031. The growth of the market is characterized by the integration of intelligent technologies in vehicles for vehicle diagnostics, safety, and improved productivity.

The business landscape for automobile manufacturers is constantly evolving driven by technological innovation, consumer preferences, and revolutionary ideas. The entry of connected vehicles into the mainstream automotive segment works as a catalyst for the adoption of automotive telematics systems in vehicles of all categories.

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Automotive telematics enables drivers and operators to transmit, receive, and store real-time vehicle data through telecommunication channels. Real-time vehicle data is essential for enhancing vehicle management lifecycle, safety, and productivity.

The vehicle data about engine functioning, driver behavior, location, fuel consumption, location, idling time, and associated complexities is obtained through the onboard diagnostics port installed in the vehicle and the global positioning system (GPS). This vehicle data is transmitted to the centralized servers through cellular networks using telematics devices.

Data servers relegate the data for specified purposes to maintenance managers, fleet operators, and insurance companies with the help of embedded algorithms. The data obtained through embedded connectivity, which is used for the purpose of predictive and prescriptive analysis of both conventional and electric vehicles.

Fleet operators use automotive telematics systems to improve fleet utilization by constantly monitoring movements of the vehicles including heavy-duty trucks, forklifts, and tractors. Automotive telematics systems help fleet operators enhance profit pools by optimizing operating costs, maintenance expenses, and fuel consumption. Fleet telematics helps operators and drivers to enhance asset efficiency by preventing breakdowns using the vehicle’s diagnostics.

The mobility sector benefits immensely from automotive telematics solutions, as it enables mobility operators to monitor vehicle movements remotely and generate to improve the operating margins and vehicle efficiency. The vehicle data is obtained through automotive telematics for route optimization, predictive maintenance, driver safety, and reduce engine idling.

Fuel consumption of the vehicles reduces substantially by decreasing the engine’s idling with the help of data about harsh braking and rapid accelerations. This data availed through automotive telematics helps in enhancing consumer experience and profitability through connectivity and data-driven decision-making.

Constant innovations in vehicle connectivity are taking place to provide operational benefits to insurance providers and fleet operators. Chipmaker Qualcomm introduced Snapdragon Auto 5G Modem-RF Gen 2, which is compatible with the 5G networks and enhances the efficiency of 5G for reliable, secure, and seamless vehicle connectivity. Snapdragon 5G Modem-RF systems are expected to enable the vehicle connectivity systems to access the full potential of the 5G networks seamlessly to perform critical automotive functions.

The market report finds that the COVID-19 pandemic hampered several enterprises. Nationwide factory shutdowns and shortage of automotive conductor chips throughout the automotive supply chain affected the market during the pandemic. The global economy was on a downward trajectory during the pandemic, affecting consumer sentiment and purchase power. This development affected car sales adversely.

Automotive Telematics Market Dynamics

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Drivers

Rising awareness among users about vehicle safety, reducing fuel consumption, and preventive maintenance of vehicles for enhanced user experience are expected to drive the market. Vehicle safety and connectivity are interconnected. Integrated smartphone features in the vehicles help drivers with satellite navigation, accident alerts, and autonomous driving assistance with the help of sensors and radar-based telematics systems.

Growing adoption of automotive telematics systems by fleet operators and insurance companies is anticipated to drive the market. The vehicle data captured by fleet operators traveling distance, the number of trips, and driver behavior help in the optimization in fleet management costs. The insurance companies provide usage-based insurance to vehicle owners based on vehicle data with the help of insurance telematics.

Restraints

Data theft, interoperability concerns, and high installation cost are likely to hinder the market. Vehicle data is vulnerable, as it is transmitted over telecom networks and stored in data centers. The threat of data theft is high, as the data is transmitted through multiple mediums. Automotive telematics work on various platforms with different sets of protocols and technologies. The data exchange between various networks and platforms is a concern for the operators.

Opportunities

Technological advancements such as 5G connectivity and AI integration in automotive telematics are expected to create multiple opportunities in the market. AI in telematics offer services for various applications including virtual assistance, driver monitoring, speech monitoring, gesture recognition, eye tracking, radar-based detection units, engine control units, and enhanced HMI.

Scope of Automotive Telematics Market Report

The market report includes an assessment of the market, trends, segments, and regional markets. Overview and dynamics have also been included in the report.

Automotive Telematics Market Segment Insights

Based on technology, the automotive telematics market is divided into embedded, integrated, and tethered. The integrated segment is expected to expand at a significant pace during the projection period owing to the rising number of factory-fitted automotive telematics systems provided by the original equipment manufacturers. Consumers prefer to buy vehicles with integrated automotive telematics for enhanced convenience and utility. The designing and fitment of automotive telematics provided by the original equipment manufacturers provide a seamless and flawless user experience to the consumers.

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On the basis of vehicle type, the global market is segregated into heavy commercial, light commercial, and passenger vehicles. The passenger vehicle segment is projected to register a considerable CAGR during the forecast period owing to the enactment and enforcement of laws and regulations by governments for passenger safety. Passenger vehicle operators prefer automotive telematics systems to meet the passenger safety evaluation standards and avoid accidents.

In terms of sales channel, the automotive telematics market is segmented into OEM and aftermarket. The OEM segment is expected to expand a rapid pace during the forecast period owing to the high consumer preference for buying factory-fitted automotive telematics systems. Major automotive companies offer cars with advanced features such as automatic emergency braking, lane keep assist, and automotive telematics systems to gain a competitive advantage in the market and improve user-experience.

Based on end-user, the market is categorized as safety & security, fleet management, navigation system, V2X, infotainment, insurance telematics, and others. The safety & security segment is expected to expand at a robust pace during the forecast period owing to stringent government regulations to enhance vehicle safety. Automakers are integrating automotive telematics systems in vehicles automatically alert the concerned help centers in case of emergencies such as accidents and track stolen vehicles.

On the basis of region, the global automotive telematics market is classified as Asia Pacific, North America, Latin America, Europe, and Middle East & Africa. Asia Pacific is expected to dominate the market during the projection period owing to the rising industrialization due to policy push by governments and the subsequent logistical activities to support industrial growth.

Liberalization of economies and policy push by the governments in Asia Pacific is acting as a catalyst for the automobile market. Infrastructural development in the region boosts commercial vehicle sales such as heavy trucks, tractors, and light commercial vehicles. Organizations and fleet operators prefer automotive telematics systems to manage their fleets efficiently.

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