The global commercial telematics market was estimated at more than US$ 16,771 million in 2020 and will register a CAGR of 14.1% during the forecast period from 2021 to 2027.
The branch of telematics deals with the communication of information from different locations. Vehicle telematics is helpful in tracking the location of the vehicle by integration of Global Positioning System (GPS) and on-board diagnostics systems. Diagnostic systems and GPS are helpful in tracking the speed of the vehicle. Vehicle insurance and fleet management companies use Telematics systems to locate the vehicle when needed.
Factors affecting
Governing laws
The government of various countries has made some laws regarding the safety, security, and tracking of vehicles. The growing safety concerns and laws by authorities are likely to uplift market growth during the forecast period.
U.S. Department of Transportation has declared some guidelines for monitoring vehicles. As per the rules, the fleet manager has to share a detailed list of violations as classified by federal or state investigators,
Fleet management systems (FMS) also require obtaining approval from Federal Motor Carrier Safety Advisor. Thus, such laws will regulate the growth of the industry in the upcoming years.
Advancement in Smart Devices
Smart devices have changed the tactics of communication. People wish to stay connected even after staying in different places. Since connectivity has become essential in lives, automobile manufacturers install connectivity solutions in vehicles to grow sales. Consumers expect innovations in automobiles. Thus, manufacturers are adopting telematics to let automobiles work like computers and smartphones.
Connectivity solutions are embedded in the cars to keep up with the demand of the population. Due to the growing phase of the digital revolution, the automobiles industry will show some promising growth in the telematics market.
COVID-19 Impact
The expansion of COVID-19 infection has halted the global commercial telematics market growth. Travel restrictions drove the weak financial performance of the key companies.
COVID-19 boosted the deceleration of companies in terms of revenue. Organizations are adopting leaseback options to improve cash flow.
Regulatory & policy changes, supply chain execution, labor, working capital administration, and liquidity & solvency management are the major factors risking the growth of telematics market participants are
Major participants of the commercial telematics market, like insurers, fleet owners, OEM, and others, recorded limited financial growth.
2020 was a declining year for the commercial telematics market, owing to the adverse demand during the crisis. Thus, it impacted the overall production activities of these industries. Moreover, the slowdown in operations due to a decrease in the workforce, COVID-19 restrictions, and inadequate health safety preparations changed the entire outlook of the global commercial telematics market.
Automotive dealers, OEMs, insurers, and fleet operators are expected to shift their focus to working capital management. Thus, the chances of investments in advanced technology are further lower.
Commercial telematics technology sales will face a decline because of the high installation charges and additional infrastructural requirements.
Regional Analysis
Asia-Pacific would exhibit maximum growth during the forecast period. Market strength and growing awareness regarding safety among the population will accelerate the growth of the global commercial telematics market. Furthermore, developing rules and regulations for the betterment of road safety is likely to boost the growth. Apart from that, OEM player, transportation, and logistics industries and advanced 4G LTE technology will bring maximum contribution from the region.
Key Market Segments
By Region
Key Market Players
