The Automotive Telematics Industry Size is projected to grow from an estimated USD 9.0 billion in 2024 to reach USD 16.1 billion by 2030 at a CAGR of 10.1% during the forecast period.
In order to improve driver and on-road safety, automakers are concentrating heavily on working with telematic suppliers to include their services into their new vehicles. In their high-end models, a few of manufacturers include e-SIM card capabilities. For example, Ford partnered with Vodafone to provide 4G Wi-Fi access. Every high-end car has this e-Sim card capability, which is also expected to fuel market expansion overall. The increasing focus on car connectivity and data-driven insights to improve driver safety, efficiency, and convenience is driving the telematics market even more.
“On a global scale, passenger cars dominate the automotive telematics market.”
Over the course of the forecast period, the passenger car category is anticipated to dominate the automotive telematics market. The primary cause of the growth is the largest proportion of passenger cars—roughly 70 million in 2023—among all vehicles produced, which is predicted to reach 79 million by 2030. The market for passenger car telematics is driven by factors including the growing acceptance of ADAS for increased safety and comfort, the growing desire for connected features, and advanced safety technology. More than 40% of passenger cars in the Class C sector have a telematic system installed by the original equipment manufacturer. As an alternative, OE-fitted telematics modules are put in Class D and above passenger automobiles to draw in customers. The European and North American markets have a higher penetration of telematics unit fitment, despite Asia-Pacific dominating the automotive telematics market due to a greater number of passenger cars. In these areas, telematics units are offered as a standard or optional feature by OEMs such as Ford, Mercedes-Benz, Audi, BMW, and Volkswagen.
Furthermore, automakers have been forced to implement telematics solutions in order to comply with strict regulations for vehicle safety (such as the e-Call mandate in Europe) and emissions monitoring in these regions. In addition, telematic services are complemented by a strong telecom infrastructure that is widely available. Mid-range models from Chery, GAC Motor, Toyota, Honda, and Nissan, along with strategic partnerships with tech companies like Google and Samsung to expand their telematic offerings, will enable them to capture a significant share of the automotive telematics market in the passenger cars segment as embedded telematics penetration expands beyond luxury and premium segments.
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“By 2030, insurance-based assessment will be the automotive telematics service with the fastest rate of growth.”
By the end of 2030, it is anticipated that insurance-based evaluation services would dominate the telematics service industry due to the numerous advantages they provide over traditional insurance. This program gives insurers useful information to evaluate risk and customize insurance rates according to each driver’s unique driving habits. Insurers can use telematics devices in cars to monitor data like driving speed, distance driven, braking patterns, and time of day, which enables a more individualized and equitable pricing structure. This strategy encourages policyholders to drive more defensively, which lowers accident and insurance claim rates and, eventually, insurer costs. To increase passenger and vehicle safety, regulatory agencies are pressuring automakers to equip their cars with telematics and connection features. As a result, there was a greater need for vehicles with more advanced and integrated functions. According to a 2022 Insurance Research Council (IRC) study on public perception and use of telematics, 45% of drivers in the US who participated in a telematics program reported that they had made significant changes to their driving habits for safety, and another 35% said they had made only minor changes.
Additionally, according to a whitepaper released by LexisNexis Risk Solutions, between 80% and 90% of people who purchased auto insurance in 2017 had coverage that was enabled by telematics. Additionally, the increasing desire for linked automobile services, which speed up and save time throughout the claims process, may allow insurance companies to assist clients in times of need. Therefore, in the upcoming years, the market for insurance-based assessment services is expected to rise as a result of the growing use of car telematics.
“The second-largest market for automotive telematics is North America.”
According to estimates, the vehicle telematics market is still the second-largest in North America. Strong government restrictions and the presence of well-known OEMs Ford Motor Company (US), General Motors (US), and Fiat Chrysler Automobiles (US) are the primary drivers of the region’s growth. The US passenger automobile market has favored vehicles with cutting-edge safety and comfort features. With nearly two-thirds of the total market, the US is the biggest market in the region. Mexico and Canada are next in line. The demand for telematics solutions is expected to increase in this area due to the growing number of luxury vehicles and the impending 5G connectivity, which will allow for more sophisticated telematics solutions. Furthermore, government initiatives and regulatory frameworks promote telematics use for safety and environmental reasons. For example, the US and Canadian governments have mandated that commercial trucks carry electronic logging devices (ELDs) to track hours of service. Consequently, telematics providers and OEMs collaborated to create compliance solutions. Due to the growing popularity of subscription-based services and connected car platforms, OEMs are also seeking to build partnerships with telematics providers in order to enhance their offerings and stay competitive in the North American market. Approximately 80% of automobiles in the US are connected thanks to the growing 5G technology. To develop useful 5G solutions, telecom firms are collaborating with manufacturers such as Toyota, General Motors, and Porsche. With its network, AT&T has alliances with over 30 automakers, including Ford, Chevrolet, Jaguar, Honda, and BMW. The automobile industry’s strong emphasis on technology and innovation, especially in the premium category where vehicles are offered with cutting-edge features and connection options, is driving the expansion of telematics in luxury SUVs and pickup trucks.
Key Players
The Automotive Telematics Market is dominated by globally established players, such as Robert Bosch GmbH (Germany), Continental AG (Germany), AT&T Inc (US), LG Electronics. (South Korea), and Verizon (US).
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