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Strategic Update of European Medium and Heavy-duty Commercial Vehicle Telematics Market
Frost & Sullivan, February 2012, Pages: 137
This research service provides a strategic analysis of the medium- and heavy-duty commercial vehicle telematics market in Europe. It discusses current and future telematics penetration in European countries and graphs the addressable market in 2017. It provides valuable insights, which include market dynamics, trends, challenges, and outlook, while compiling a comprehensive profile of major telematics vendors. It also identifies the benefits and challenges that telematics vendors face, showcasing the steps required to gain market presence in the coming years. The research service also highlights the upcoming changes in the tachograph legislations and the benefits that it offers to the fleet owners.
Market Overview
OEMs set to Leverage a Range of Strategies to Introduce FMS as a Standard line-fit
OEMs have traditionally focused on their core competency of vehicle usage and vehicle analysis, rather than transport operation. This has placed them at a disadvantage to independent aftermarket telematics vendors, whose core competence is in transport operation. OEMs have typically limited client contact after selling the vehicle. But this is expected to change once OEMs gradually start offering fleet management systems (FMS) as a standard in their models. Frost & Sullivan anticipates almost half the vehicles produced to have a FMS as a standard line-fit by 2017. Telematics solutions supporting an open and flexible platform will allow vehicle manufacturers to survive long-term in this competitive market.
“The current trend of offering FMS as a standard in line-fit has slowly started, with each OEM having mapped out its own strategy based on its business needs”, notes the analyst of this research. “Such an approach is poised to increase OEMs’ year-on-year FMS installed base in the coming year and neutralise competition.” Some OEMs might consider offering FMS as a standard based on the country in which they are being offered, while others might base it on models, changing platforms, miles driven or pricing. At present, however, most OEMs consider the particular market or country, when offering FMS as standard. For example, certain models sold in Benelux, France or Germany have FMS as a standard, while the same models sold in Italy or Ukraine do not have FMS as standard simply because of the varying level of demand and awareness.
Initial Free Subscription Period to Boost Adoption of FMS
A key issue for OEMs is that hardware penetration might not necessarily equate to service penetration. This is because some operators do not want to be linked to OEMs or to a particular OEM. At the same time, some OEMs do not have the capability of expanding outside their own vehicle line. Moreover, operators with mixed fleets do not favour OEMs’ base-telematics system. Thus, even with the hardware in place, OEMs are unlikely to win all the associated service opportunities. “Even if OEMs start to offer FMS as a standard, there is always a difference between hardware being in place and the service being activated – these two things are very different,” explains the analyst. “The presence of the hardware in the truck does not necessarily mean that it is going to be used by the fleet operator.”
This strategy of offering a standard quality fitment, suiting all types of customers and extending the continued relationship, is expected to have a positive influence on the market presence of OEMs in the coming years. This strategy will not only help OEMs to increase their base of active subscribers but will also help them collect a large pool of real-time vehicle specific data to build better trucks for the future. “The best way to increase the base of active subscribers is by offering an initial free subscription period of at least a few months or years,” advises the analyst. “This will allow the truck owners to realise the benefits of FMS.”
Market Sectors
Expert Frost & Sullivan analysts thoroughly examine the following applications in this research:
- Entry- level services
- Mid-end services
- High-end or advanced services
1. Executive Summary
2. Market Definitions
3. Research Objective, Scope, Methodology and Background
4. Total Medium- and Heavy-duty Commercial Vehicle Telematics Market
5. PEST Outlook
6. Upcoming Legislations
7. Tachograph Roadmap and Upcoming Changes
8. Russian ERA GLONASS Implications Leading to Multi-Modal Capability
9. Benefits of FMS
10. Real-time ROI Calculation
11. Hardware and Service Profit Margin Calculation
12. Market Drivers and Restraints
13. Telematics Product and Service Pricing Range
14. FMS Services Roadmap
15. Expanding Value Chain Eco-System
16. Competitive Force Analysis
17. Top Market Trends Impacting Commercial Vehicle Telematics in Europe (12 Key Trends)
18. Key Revenue Opportunities
19. Market Measurements
20. European Commercial Vehicle Sales by Countries and OEM
21. European Commercial Vehicle VIO by Fleet Size
22. Telematics Installed-base Penetration Forecasts by Scenario Analysis
23. FMS Penetration by Country
24. Addressable Market By Country
25. Growth Analysis by Country
26. Replacement Demand versus Original Demand Forecasts
27. Hardware and Service Revenue Forecast
28. FMS Penetration by Industry
29. Key Market Participants Profiles
30. Profiles of Key OEMs Offering Telematics
31. Unit Shipments Per Year for OEM versus Third-party Suppliers
32. FMS Penetration by Company: Market Shares
33. Strategic Conclusions and Recommendations
34. Appendix
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