Luton, Bedfordshire, United Kingdom, Nov. 07, 2024 (GLOBE NEWSWIRE) -- The growth of the automotive telematics market is driven by rising vehicle production with advanced safety features, such as eCall, across regions including Europe, Japan, China, and the United States. The adoption rate of embedded telematics is expected to increase, supporting market expansion for telematics solutions over the forecast period.
A key factor in the rising adoption of telematics systems is the focus of automotive manufacturers on embedding telematics in both passenger and commercial vehicles. Growing consumer awareness of telematics’ benefits, including better insights into vehicle performance and driver behavior, is prompting fleet owners and managers to adopt these systems. Increased consumer interest and higher technology adoption rates, both from OEMs and aftermarket providers, are further fueling the market's growth.
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Growing Demand for Connected Vehicle Solutions Drives Market Growth
The automotive industry is witnessing a surge in demand for connected vehicle solutions as consumers show increasing interest in advanced connectivity features. Automotive manufacturers are responding by integrating telematics systems across a wide range of vehicles to engage customers and showcase the extensive benefits of vehicle telematics.
IoT Integration Enhances Vehicle Performance and Safety
Vehicle manufacturers are embracing Internet of Things (IoT) technologies to boost vehicle performance and safety features. This integration of IoT solutions into telematics is enhancing real-time data collection, analysis, and application, contributing to the increased reliability and functionality of modern vehicles.
Telematics Solutions Empower Fleet Management with Advanced Analytics
Fleet management systems are increasingly relying on telematics solutions to improve operational control through data analytics. With features like optimized driving routes, driver behaviour insights, and performance tracking, telematics-enabled fleet management empowers fleet operators to make data-driven decisions, enhancing overall efficiency and safety.
Market Dynamics
DRIVER: Rising Adoption of Connected Car Services
The connected car market is experiencing rapid growth, driven largely by advancements in the telecom industry. The implementation of 5G networks across major regions has spurred demand for connected car services by enabling features like real-time traffic monitoring, remote diagnostics, and autonomous driving capabilities. Collaborations between telecom providers and automotive manufacturers have further accelerated the adoption of connected features. For example, in June 2023, Targa Telematics partnered with Renault to incorporate the “Renault Easy Connect for Fleet” platform, enhancing connectivity options in Renault and Dacia models.
Satellite Technology and Sustainability Goals Fuel Connected Car Advancements
Satellite technology is playing a significant role in advancing connected and autonomous vehicles, aligning with the United Nations' 2030 Sustainable Development Goals (SDGs). Specifically, several nations are working towards SDG 3 targets aimed at reducing road traffic fatalities and injuries by 2030. The integration of satellites into connected vehicles aids in data collection and analysis, crucial for enhancing road safety and improving navigation. To meet growing consumer demands for enhanced features, automakers are embedding advanced systems in mid-segment and premium vehicles, generating a wealth of real-time data that telematics tools can interpret, which is driving market growth.
Restraint: Lack of Standardization
The telematics market within the automotive industry faces significant challenges due to the lack of standardization and inconsistent regulations across regions. Different regions have their own set of standards, making it difficult for telematics devices to work seamlessly together. For example, Original Equipment Manufacturers (OEMs) often develop proprietary telematics systems that do not integrate smoothly with third-party applications or services, limiting the ability to use external applications across different vehicles. This fragmentation results in difficulties with data sharing, integration, and the provision of consistent real-time updates, such as traffic information or vehicle diagnostics.
Cybersecurity Concerns and Data Breaches
Rising cybersecurity threats, such as unauthorized access to vehicles and data breaches, are additional concerns that could impact the widespread adoption of telematics technology. In January 2023, security researchers revealed vulnerabilities in the telematics systems of 16 car manufacturers, which allowed hackers to control car functions, including starting or stopping the engine. In March 2023, Skoda Auto India experienced a data breach, with over 20 databases and customer information leaked on a hacker forum. These incidents highlight the potential risks of telematics technology, further complicating efforts to enhance the security and trustworthiness of telematics systems.
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Opportunity: 5G/6G and Artificial Intelligence Will Create Futuristic Growth Opportunities
The advent of 5G/6G technology has opened up significant growth opportunities for the automotive telematics industry, providing enhanced speed, low latency, and high bandwidth. These advancements are particularly evident in premium and luxury vehicles, which are increasingly equipped with telematics devices operating on 5G/6G networks. As consumer demand for these feature-rich vehicles rises, the market for telematics solutions in vehicles has expanded. According to exactitude consultancy analysis, sales of premium cars grew by 10.5% from 2021 to 2023, while luxury vehicle sales surged by 35% during the same period. This growing demand for premium and luxury vehicles has created new opportunities for telematics devices that can perform a range of functions, including vehicle maintenance detection, enhanced user experiences, remote diagnostics, and in-car infotainment systems.
Safety & Security Segment Growth
The safety and security segment is poised for significant growth, driven by the increasing integration of advanced safety features like Advanced Driver Assistance Systems (ADAS), anti-lock braking systems, and others. As automakers focus on enhancing vehicle safety, the incorporation of telematics systems to support these features will be critical in boosting consumer adoption and improving road safety overall.
Artificial Intelligence in Telematics
The integration of artificial intelligence (AI) with 5G/6G infrastructure is accelerating the development of connected vehicles, where AI processes vast amounts of data from the vehicle's surroundings to enhance operational efficiency and decision-making capabilities. Companies like Tesla have pioneered the use of AI-based features such as Autopilot, which improves safety and self-driving capabilities by leveraging data collected from millions of vehicles. AI also enables predictive maintenance in automotive telematics, allowing fleet managers to anticipate and prevent costly repairs or breakdowns before they occur. The combination of 5G/6G technology with AI is a key driver for future growth in the automotive telematics market, offering enhanced capabilities and a more connected, efficient driving experience.
Challenge: Cybersecurity
As the telematics industry continues to expand in the automotive sector, cybersecurity remains a critical challenge. With the increasing connectivity of vehicles, telematics systems such as software, apps, and Bluetooth are vulnerable to cyberattacks. Several incidents have highlighted the potential risks posed by cyber vulnerabilities in connected vehicles. For example, in 2015, two researchers were able to hack into Chrysler's Jeep vehicle, leading to a software upgrade for 1.4 million vehicles. Similarly, Tesla S and Nissan Leaf models were targeted in a cyberattack in February 2016.
To address these risks, various stakeholders are focusing on integrating cybersecurity and threat detection systems within telematics solutions. Data analytics and artificial intelligence (AI) are being utilized to improve the security features of telematics systems. In partnership with a leading car manufacturer, Viasat developed the first-ever advanced in-car connectivity system with military-grade security features.
Regulatory Efforts to Improve Cybersecurity
Regulators worldwide are responding to the increasing cybersecurity threats by setting minimum standards for vehicle software and security. For example, the United Nations Economic Commission for Europe (UNECE) introduced two key regulations—UN Regulations R155 and R156—in June 2024 to combat cybercrimes in connected vehicles.
- UN R155 mandates that automakers install a Cybersecurity Management System (CSMS) in vehicles to identify and mitigate cyber threats throughout a vehicle's lifecycle.
- UN R156 requires automakers to implement Software Update Management Systems (SUMS), ensuring that software updates are regularly processed to keep vehicles protected from emerging security threats.
These regulations are expected to significantly reduce cybersecurity concerns related to connected vehicles, promoting safer and more secure automotive telematics systems globally.
Automotive Telematics Market Ecosystem.
The leading Original Equipment Manufacturers (OEMs) in the automotive telematics market have embraced the latest technologies, diversified portfolios, and established strong distribution networks globally. These OEMs are at the forefront of integrating connected vehicle technologies, offering solutions that enhance vehicle safety, efficiency, and overall user experience. By leveraging advancements in 5G/6G connectivity, artificial intelligence (AI), and real-time data analytics, these companies are shaping the future of automotive telematics.
- Robert Bosch GmbH (Germany)
- Webfleet Solutions B.V. (Netherlands)
- Trimble (U.S.)
- Verizon (U.S.)
- Zonar Systems (U.S.)
- Octo Group S.p.A (Italy)
- Microlise Telematics Pvt. Ltd. (U.K.)
- Harman International (U.S.)
- AT&T (U.S.)
- TomTom N.V. (Netherlands)
- Visteon Corporation (U.S.)
- Telefonica S.A (Spain)
- Aptiv PLC (Ireland)
- Geo Tab Inc. (Canada)
- Mix Telematics (South Africa)
- Microlise Limited (UK)
- Continental AG (Germany)
- LG Electronics (South Korea)
- Harman International (US)
Recent Developments
- Continental AG and Google Cloud Collaboration (January 2024): At CES 2024, Continental AG and Google Cloud unveiled a generative AI voice assistant integrated into Continental’s Smart Cockpit High-Performance Computer. This collaboration enhances user interaction in vehicles, offering conversational navigation, driver personalization, and in-car control.
- Continental and Aurora Innovation (January 2024): Continental AG and Aurora Innovation showcased advanced hardware designs at CES 2024, featuring telematics units and automated driving control units that support Aurora’s self-driving technology.
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Embedded Systems to Lead the Automotive Telematics Market
The embedded systems segment is anticipated to hold the largest market share in the automotive telematics industry by 2030. Embedded telematics systems offer a range of advanced features and substantial benefits compared to integrated systems. These solutions seamlessly integrate with the vehicle's onboard electronics, enabling functionalities such as real-time data insights, navigation assistance, and remote control, all without requiring additional hardware or aftermarket installations. As a result, embedded telematics provides enhanced vehicle security, improved driver safety, and optimized operational efficiency, meeting the increasing demand for connected and smart vehicle solutions.
Luxury automakers, including Mercedes-Benz and BMW, have been early adopters, offering embedded telematics as standard or optional features to enhance the driving experience with advanced connectivity and convenience. Mainstream brands like Ford and Toyota have also followed suit, incorporating embedded systems to offer valuable features such as remote vehicle access, stolen vehicle tracking, and predictive maintenance alerts. These features are particularly attractive to consumers and fleet operators looking to enhance vehicle safety and performance without the need for aftermarket installations. The growing consumer demand for connected car services, coupled with regulatory mandates and ongoing technological advancements, is driving the global adoption of embedded telematics solutions.
Asia Pacific Dominates the Automotive Telematics Market
The Asia Pacific region is poised to be the most lucrative market for automotive telematics during the forecast period. China holds the largest market share in the region, accounting for more than 45% of the global vehicle production. The automotive telematics market in Asia Pacific is expected to see substantial growth, with passenger car production in the region predicted to increase from approximately 57 million units in 2024 to about 62 million units by 2030. A significant driver behind this growth is the increasing demand for premium and luxurious vehicle features, particularly in India, which is expected to experience the fastest growth rate in the region.
Key players in the Indian automotive market, including MG Motor, Maruti Suzuki, Hyundai, and Tata Motors, are integrating telematics solutions into their vehicles to meet the rising demand for advanced vehicle technologies. Additionally, major telecom players like Vodafone Idea, Airtel, and Jio are supporting the automotive industry by providing robust connectivity services to enable advanced features in premium and luxury vehicles.
China: Leading in 5G Network Deployment
China has established the largest 5G network in the world, with over 2.64 million 5G base stations in operation by the end of March 2023. The rapid development of 5G-based telematics cars is significantly supported by the Chinese government’s investment in 5G infrastructure, creating a conducive environment for the growth of connected vehicles. The increasing demand for safer and more efficient transportation has prompted automotive manufacturers to integrate 5G technology into their vehicles.
Major OEMs such as BYD, Geely, and SAIC Motor are leading efforts to incorporate 5G-enabled telematics systems in their vehicles. For example, Huawei and SAIC Motor have partnered to develop the "HiCar" system, integrating 5G technology with intelligent vehicle systems to enhance user experience through seamless connectivity. Additionally, Geely and China Mobile collaborated to launch the world’s first 5G-based remote driving service, allowing users to control their vehicles remotely via a mobile app, marking a significant innovation in automotive telematics.
Market Segments:
By Services
- Emergency Call
- Stolen Vehicle Assistance
- Stolen Vehicle Tracking
- Stolen Vehicle Slowdown
- Remote Ignition Block
- Theft Alarm Notification
- Insurance Risk Assessment (Usage Based Insurance)
- On-Road Assistance (Breakdown Assistance)
- Remote Diagnostics
- Others
By Fleet Management Services
- Fleet Tracking and Geofencing
- Routing and Scheduling
- Vehicle Maintenance and Diagnostics
- Fleet Analytics and Reporting
- Others
By Vehicle Type
- Passenger cars
- Light Commercial Vehicles
- Trucks
- Buses
By Vehicle Type
- Passenger cars
- Light Commercial Vehicles
- Heavy Commercial Vehicles
By Form
- Embedded
- Integrated
By Connectivity
- Satellite
- Cellular
- 5G
- 4G/3G
By Offerings
- Telematics Control Units
- Hardware
- Software
Electric & Hybrid Vehicle Telematics Market, By Vehicle Type
- Battery Electric Vehicles (BEVs)
- Plug-in Hybrid Vehicles (PHEVs)
- Fuel-cell Electric Vehicles (FCEVs)
Electric & Hybrid Vehicle Telematics Market, By Services
- Emergency Call
- Stolen Vehicle Assistance
- Stolen Vehicle Tracking
- Stolen Vehicle Slowdown
- Remote Ignition Block
- Theft Alarm Notification
- Insurance Risk Assessment (Usage Based Insurance)
- On-Road Assistance (Breakdown Assistance)
- Remote Diagnostics
- Others
By Region
- Asia Pacific
- Europe
- North America
- Rest of the World
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