Provided by BIS Research
Growing demand for safety, advancement in smartphone technology, and high-speed internet connectivity have not only increased awareness of telematics but also made it an essential component for vehicles. Apart from offering increased safety and security, telematic systems also offer entertainment and information content and cost savings among others.
Manufacturers drive development of their telematic systems
The Original Equipment Manufacturers (OEMs) have recognized the advantages of telematic systems and are incorporating advanced telematics services into all vehicles. The main reason behind is due to benefits such as reliability standards, stringent governmental regulations towards the adoption of telematics solutions, and increasing partnerships with service providers offering increased internet connectivity e.g. 4G LTE. OEMs are further developing their own telematics solutions, for instance, ‘AUDI’ is embedding cellular connectivity in its vehicles to offer safety, entertainment, and convenience features.
Telematics systems are majorly used for connectivity, that can either be provided through smartphones or integrated communication modules. Embedded telematics can be used for all services such as remote diagnostics, safety, and security navigation, whereas tethered and integrated telematics cannot be used for safety and security services. Despite other benefits provided by the telecom system, connectivity will be the main feature in the future. One of the most convenient and secure ways to enable connectivity in vehicles is through embedded telematics, i.e. embedding a SIM card and communication module within the vehicle’s architecture.
User adoption highest in Asia-Pacific
According to the latest market intelligence report ‘Global Automotive Telematics Market- Analysis and Forecast (2017-2021)’, the global automotive telematics market is estimated to reach $17 billion and a volume growth at a CAGR of 19% by the end of 2021. The adoption rate of the telematics is influenced by a growing popularity of connected vehicles, fleet management services, and changing consumer behavior towards a more connected and safe driving experience. Improved offerings from OEMs in terms of pricing and features have equally led to higher popularity, especially in the passenger cars.
Advantages of stringent government regulations, high production volume of passenger cars, and growing demand for connectivity solutions and infotainment features especially in passenger vehicles drive user adoption. Additionally, the insurance industry is increasingly more interested in fleet management services and adoption of telematics technology. This, in turn, will drive acceptability of telematics for passenger cars and commercial vehicles.
The telematics industry is still in its early stage since there is a significant part of the population is unaware of the advantages of telematics in terms of safety and security for passengers and their vehicles. This is not true for Asia-Pacific, home to telematic systems with 4 of the top 10 well-established automotive manufacturers coming from this region, where people are aware of the benefits of the automotive telematics system.
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