What Are Advantages of Automotive Telematics Solutions?
1.35 million people die on the roads every year, and “Road traffic crashes cost most countries 3% of their gross domestic product.”, says the World Health Organization (WHO). Though the more-than-sustainable number of automobiles on the roads is a key reason for this, most accidents are caused by human errors, such as reckless driving, not paying attention to the road, and speeding. This has prompted governments around the world to make the installation of systems and programs in vehicles that can aid drivers during the journey mandatory.
P&S Intelligence credits this driver while claiming that the automotive telematics market will display a robust 16.6% CAGR between 2020 and 2030 (forecast period), to grow from $27.7 billion in 2019 to $149.9 billion by 2030. Telematics solutions work on the combined principle of informatics and telecommunications, to allow automobiles to share data with its internal as well as external environs. Vehicles integrated with telematics solutions can run diagnostics, check for insurance renewal date, collect navigational data, track the functioning of their fuel management system, and evaluate the safety of passengers and pedestrians.
Automotive telematics systems can be embedded, integrated, or tethered, among which embedded systems account for the highest installation rate currently. This is because the government of several countries has mandated the provision of telematics capabilities in vehicles. In the years to come, the demand for integrated systems is projected to increase the fastest, as the demand for infotainment systems connected to the internet is rising in mid- and premium-range automobiles. Additionally, the growing popularity of electric vehicles (EVs) is fueling the adoption of integrated telematics systems.
On the basis of service, the automotive telematics market is classified into infotainment and navigation, safety and security, and remote diagnostics. Among these, the safety and security classification held the largest share in the market during the historical period (2015–2019). Safety and security services include roadside assistance, the automatic automobile locking/unlocking feature, and fleet management services, including vehicle maintenance, financing, and telematics. During the forecast period, the remote diagnostics classification will observe the highest CAGR, because this service allows for vehicle health diagnosis in advance.
Providers of such solutions are being offered lucrative opportunities by the rapidly expanding 5G network around the world. Telematics solutions require high-speed data transfer for effective functioning, which cannot be provided by 4G and 3G in most of the cases. Therefore, with countries around the world pouring heavy sums in modernizing their telecommunications infrastructure, by installing equipment that supports 5G, telematics solutions providers can hope for a windfall in the near future. For instance, Verizon Communications Inc. launched 5G services in the U.S. in December 2019, thus ushering the world into the 5G era.
In 2019, the automotive telematics market was dominated by North America, as the government here is offering strong support for the installation of such solutions in automobiles. For instance, having an electronic logging device (ELD) in commercial vehicles has been made mandatory by the Federal Motor Carrier Safety Administration (FMCSA) of the U.S. Thus, government regulations, along with the increasing demand for long-range trucks, is expected to boost the market growth in the region during the forecast period.
Hence, as the awareness on road safety increases and governments implement stringent laws to bring down road accident deaths, the market for automotive telematics solutions will advance at a high pace.
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