Telematics- The Road To Global Connectivity

Telematics had its humble beginnings in GPS and the integration of telecommunications and informatics back in the 1980s. Since then, technological innovation spurred by government and industry interest in road safety have brought telematics a long way.

An industry that was once focused on navigation now includes vehicle tracking and monitoring, fleet management, and traffic and weather information. Telematics companies can offer any or all of the above and more, sometimes bundled with other services, such as roadside assistance. Some countries, like Brazil and China, already legally mandate the adoption of telematics for security and safety reasons, with heavy support from the EU. China in particular has seen an increase in car sales of up to 16 percent since 2012, according to the China Association of Automobile Manufacturers (CAAM). With the number of cars rising, demand for new technologies rise in tandem.

Because of government support, aftermarket telematics devices are very popular and are expected to become more so over the next five years, although the OEM subset is expected to grow faster yet because of alliances between manufactures and telematics providers. By 2020, the global commercial telematics market could reach $49.12 billion, in US currency. About half of that market is in fleet/asset management, which is not likely to change any time soon.

Brazil, for example, stands as the largest country in Latin America, and the fifth largest country in the world, and will soon introduce connected services within the next one to two years on limited models. The market is projected to expand to 1.3 million subscribers by 2020, according to Frost and Sullivan. Geographically, countries in the Asia-Pacific, Middle East, and Latin America are not far behind and are likely to be the most productive regions for the industry going forward.

But despite all this growth and development, telematics is still an emerging industry. Not all potential users have adopted the technology, putting service providers not just in competition with each other but also with the option of forgoing telematics all together. The technology continues to develop rapidly and providers offer multiple visions of how these services can work. It is not altogether clear what the industry will look like in ten or twenty years.

We therefore live at an exciting time during which companies get to decide exactly what telematics means for them. What services should be bundled together, how the technology fits within the business plan, all of that is up for grabs. Eventually, barring some unforeseen event that changes the whole game, vehicle fleets of all kinds will simply have telematics as a matter of course and business plans will assume their use. Going without could come to seem as archaic as transporting cargo with teams of horses or oxen.

For now, though, we still live and work in a time when not everybody uses the technology. But for those who do adopt the technology, they will surely be at an advantage.