The Automotive Telematics market growth is projected to grow from USD 9.0 Billion in 2024 to USD 16.1 Billion by 2030 at a CAGR of 10.1% during the forecast period. This growth is mainly driven by the increasing demand for premium and luxury cars, growing concerns regarding safety during breakdowns and accidents, and the rising focus of telematics providers on advanced telematics solutions incorporating IoT, 5G, and Artificial Intelligence.
In addition, 4G connectivity is widely used for in-vehicle communication; some governments plan to implement 5G LTE connectivity more effectively and faster. Tier I companies are entering into strategic collaborations to develop 5G technology for data communication in the automotive industry. For instance, LG Electronics (South Korea) partnered with Intel Corporation (US) to develop 5G telematics technology for vehicle communication. Likewise, Continental AG (Germany) partnered with NTT DoCoMo Inc. (Japan) to share R&D capabilities for developing advanced 5G networks to enhance the cellular-based vehicle-to-everything (V2X) technology.
With increasing sales of electric vehicles (EVs) across the globe and governments actively pursuing increased EV adoption through incentives and mandates, the EV telematics market will grow in the future. According to Marketsandmarkets analysis, the BEV segment is estimated to account for the largest market of all EVs throughout the forecast period. This is due to the continuous increase of new battery electric car registrations in Asia and Europe. Incorporating telematics into BEVs allows for providing real-time information to EV drivers, enhancing their driving experience through features like energy management, charging station routing, and remote battery monitoring. Telematic services become increasingly important in maximizing the efficiency and usability of battery-electric vehicles as the technology of electric vehicles advances and consumer demand for environmentally friendly transportation rises. Telematic services integration in battery electric vehicles is anticipated to increase significantly in the upcoming years due to continued telematics and infrastructure development developments.
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In 2024, embedded telematics is projected to hold the prominent share of automotive telematics as it is the trend in the telematics market, offering various advanced features and additional benefits compared to integrated telematics. However, the adoption of an integrated form of telematics is expected to grow significantly in the coming years. Customers increasingly prefer integrated telematics, allowing access to various onboard features such as navigation, infotainment, and vehicle diagnostics into a single platform. Thus, the service providers are joining hands with OEMs to deliver integrated devices supported by strong operating systems for telematics solutions in vehicles.
The passenger cars segment is estimated to account for the largest share of >70% of the telematics market in 2024, owing to higher penetration of embedded systems than commercial vehicles. Asia Pacific holds the largest market for automotive telematics; however, it has lower adoption of telematics than the European and North American regions. These regions have a higher demand for high-end and luxury cars equipped with embedded telematics boxes or modules. Mercedes (Germany), Audi (Germany), and BMW (Germany) have launched their range of vehicles that deploy embedded telematics.
Furthermore, regulatory mandates for vehicle safety and emissions monitoring have pushed automakers to adopt telematics solutions to comply with stringent requirements, further driving the growth of this technology. For instance, initiatives such as the eCall mandate in European countries mandate the installation of telematic units in all new vehicles. This service automatically alerts emergency services in the event of a crash, showcasing the critical role of telematics in modern vehicles. This mandate of eCall in European countries is driving the market of telematics services for passenger cars during the forecast period.
Asia Pacific is expected to be the most lucrative market for automotive telematics. India and China have witnessed significant automotive production and sales growth in Asia Pacific over the past few years, mainly in the medium to premium luxury cars. According to MarketsandMarkets analysis, the passenger car production in Asia Pacific is expected to grow from ~43 million units in 2024 to ~47 million units by 2030, with India witnessing the fastest growth rate. The region has an adequate mix of economy and high-end vehicles, depending upon the country’s economic condition. Japan and South Korea have higher adoption of premium vehicles, mostly equipped with telematics services. With increasing disposable income and evolving consumer preferences, the demand for premium vehicles equipped with telematics features is rising.
Furthermore, in response to rising stringency in safety regulations, OEMs are installing advanced driver assistance systems (ADAS) in vehicles. Since ADAS requires real-time data captured by telematics features, this trend is anticipated to continue to grow the demand for automotive telematics in the coming years. Global telematics providers such as Octo Telematics, LG Electronics, Geotab, and AT&T Inc. in Asia Pacific are expected to accelerate developments in advanced automotive telematics services.
The automotive telematics market is led by globally established players such as Robert Bosch (Germany), AT&T Inc. (USA), Continental AG (Germany), LG Electronics (South Korea) and Verizon (USA). These manufacturers provide a wide range of automotive telematics products and hardware components to cater to the demands of major regions such as Asia Pacific, North America, and Europe. These companies have strong distribution networks at a global level in addition to their extensive range of products. For instance, in January 2024, Continental AG and Google Cloud partnered at IAA Mobility, presenting a new personalized travel era. Its features include conversational navigation, driver personalization, and in-car control. It also allows users to ask detailed vehicle-related questions, discover places of interest, and engage in back-and-forth conversations for a more helpful travel experience. Also, In May 2022, Astrata signed a 5-year partnership with Bosch Group for manufacturing Astrata’s advanced fleet management system for heavy goods vehicles and light commercial vehicles. These strategic developments by key manufacturers are expected to enable the global market growth for automotive telematics.
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