A recent report by ABI Research forecasts that revenues in the commercial fleet Telematics market will increase from $7.25 billion in 2012 to $26.8 billion in 2018. The bulk of this projected global growth is expected to be in the US, with Asia and the Middle East a close second.
As tighter trucking regulations drive the adoption of technology, the US Telematics market increases are estimated at a 15.3 percent compound annual growth rate over the next four years.
Numbers out of the US this week indicate that these crystal ball predictions may not simply be hype. Buoyed by both innovation and investment – the two key drivers in any market – the US automotive industry looks to be singing all the right notes.
Firstly, in an analysis of global patent applications released this week, Hyundai posted the biggest gains in the number of patent filings over the past five years, closing the gap on industry leader Toyota.
In addition, 2014 rental fleet purchases were the highest since 2007, according to Manheim's annual Used Car Market Report. US rental car companies bought 1.63 million new vehicles in 2014, an almost 4 percent increase on the year before, albeit well below the 2.1 million new vehicles that were sold into rental fleets in 2005 and 2006.
In South Africa, commercial Telematics is expected to take a somewhat less meteoric, but no less significant, uptake with penetration reaching 22.5% by 2021 and generating R4.6 billion.
Mike van Wyngaardt, Executive at Tracker Business, confirms, “We expect the fleet and commercial Telematics market to be propelled by increased competition in the local logistics market, erratic fuel costs and the drive towards wireless connectivity in all areas of business.”
Convergence of business and technology
A 2015 Telogis report looking at the convergence of technology and business management identified key trends pertaining to fleet management for the year.
According to the report, ”customer expectations will continue to evolve. An increasing percentage of a mobile enterprise’s customers will expect more: more accurate ETAs, online real-time tracking of their service request, flexibility in meeting change requests or strict time windows, faster deliveries — and they’ll want to be able to rely on one partner to handle it in one central location. The ability to avoid multiple logins and a number of different point solutions will become even more important for efficiency and productivity and overall visibility. All of these changes will affect delivery.”
While the report covers the US market, these characteristics overlay most economies of today - with nowhere to hide from tech adoption – and South Africa’s developed Telematics market is no different.
“Advancements in vehicle fleet intelligence have the potential to impact other areas of business. lead to increased transparency and verification when it comes to performance, safety, efficiency and ultimately, improved control of business processes. The impact this will have on the connected business of the future – not only transport businesses – will be very interesting to watch over the next year or so,” says Van Wyngaardt.
Sparkling projections and hard data may yet birth more connected, intelligent companies. Just how much of a role Telematics is playing will be unveiled in time.
New challenges and opportunities
With rapid new technology comes new challenge and opportunity. The US is facing the issue of 20 million trucks on their roads being affected by an imminent ‘reset’, due to major network providers ‘sunsetting’ their incumbent connectivity operating systems. In other words, Telematics providers in the US are licking their lips as the entire market goes out to tender.
Meanwhile, Brazil’s fledgling commercial fleet market faces a massive trend towards outsourcing of commercial vehicles. Less than 7 per cent of the South American giant’s between 5 and 6 million corporate vehicles are outsourced. This logistical headache sits against a backdrop of an industry battling the high cost of tech and data transfer and resultant slow investment in Telematics.