Decrease in connectivity Cost & Supportive Governmental Regulations on Enhanced Safety & Security Features boost Adoption of Consumer Telematics Market
Drivers of Consumer Telematics Market
Telematics enables vehicles to be tracked using a combination of GPS receivers, GPS satellites, GPRS networks and cloud based computing. Global consumer telematics industry offering consists of usual navigation services to advanced navigation services. These services are used for vehicle tracking for security, monitoring, location-based services such as location of petrol pumps and traffic information. Consumer telematics technology offers advanced network enabled cars that will provide consumers emergency assistance related to vehicle services, with the help of GPS and traffic information system. These communication technologies can transfer massive amounts of data from in and out of the vehicles in real time.
The market developments are driven by end-user targeted vehicle centric communication and information services and technologies. The market is driven by higher market penetration of smart phones, supportive governmental regulations related to enhanced safety and security features, demand for interactive driving experience, decrease in connectivity cost, and availability of high-speed internet technologies such as Long-Term Evolution (LTE).
Trends & Challenges in Consumer Telematics Market
A key market challenge that may hinder the growth of the market is identifying the degree of human interaction that is required in this technology especially in passenger vehicles. The commercialization of consumer telematics should ideally make a framework that will decide clearly who will pay what in consumer technologies. Some costs may be deterrent to the market demand of telematics enabled vehicles as consumers may be willing to pay on a recurring basis.
With time, the commercialization of the technology will lead to many technological advancements gaining adoption in the market. Various embedded communications that hopes to boost the M2M market is creating vast operational efficiency in vehicles among the current consumers of telematics, leading to better consumer services. The sales and profits of the manufacturers using this technology has successively increased. Insurance providers have started to capitalize on this technology.
Some Market Estimates
As per a recent study by a new study by the British Insurance Broker’s Association (BIBA), around half a million motorists in the UK now have a telematics box fitted in their car as part of their insurance policy. Furthermore, the number of motorists opting for an insurance policy that includes a telematics device has risen by 40% with respect to last year. Drivers, manly young drivers, can attain savings of up to 25% on their insurance premiums. This has resulted in significant increase in the number of motorists with a black box fitted in their car from 12,000 in 2009 to over 450,000 today.
Growth Prospects & Way Forward
As per a report by Allied Market Research titled “World Consumer Telematics Market - Opportunities and Forecasts, 2013 – 2020”, the global consumer telematics market would reach $26.18 billion by the end of 2020, growing at 33.7% CAGR amid the forecast period. Insurance telematics leads the global consumer telematics market in terms of revenue, contributing to about 27% of the aggregate consumer telematics solutions market. This is closely followed by market segments on infotainment & navigation and location-based telematics market solution. The consumer telematics market is getting a fillip in the nations such as Brazil and China owing to the mandatory government regulations relating to installation of telematics in the vehicles. The market for the automotive OEM is expected to grow rapidly due to growing association of telematics service providers with various device manufacturers. The ‘Aftermarket’ segment generates the maximum revenue and is expected to remain so in future contributing to more than 55% of the total market revenue through the forecast period.