The Automotive Telematics Market is estimated to grow from USD 8.8 billion in 2022 to USD 15.5 billion by 2027, at a CAGR of 12.1% during the forecast period.

The automotive Telematics Market is expected to grow due to growing trend of intra-vehicle connectivity solutions and implementation of government mandates and initiatives. The market growth is also boosted by the growing cellular internet penetration, making it convenient for vehicles owners and new buyers to have telematics systems in their vehicles. Another fact is the growing demand for premium and luxury cars with embedded connectivity in regions such as Europe and North America.

Driver Behaviour Services to showcase the fastest growth

Driver Behaviour market is driven by the continuous increase in government mandates in commercial vehicle for the safety in logistics and transport related business. Large commercial vehicle fleet owners mainly use this kind of services. The growth factors are operational efficiency and efficient fleet management. With Driver Behaviour, organizations can have better access to vehicle tracking and how the vehicle is being used. It also helps in higher efficiency, consistent performances, and ultimately reduced operational costs. Alternatively, the data generated from ‘Driver behaviour’ services is leveraged by Telematics and Internet Service Providers (TSPs & ISPs), and Insurance companies. Currently, North America and Europe hold the larger automotive telematics market share region wise. However, in the coming years, countries such as Japan, South Korea and China are expected to witness growing telematics penetration due to government regulations, growing share of premium and luxury vehicle etc.

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Embedded System is expected to lead the market during the forecast period

By 2027, the embedded form of connectivity is estimated to have the largest the market share. The regulatory mandates in the EU will boost embedded telematics segment growth. EU mandated eCall system in 2018 in all vehicles that helps to connect a vehicle to emergency services following a collision. Factors such as government mandates, and increased adoption of cloud-based services are expected to drive the market. Embedded systems have certain disadvantage’s such as, these are relatively more expensive than integrated and tethered. Integrated solutions are quite cheaper than embedded, and are witnessing growing penetration, which is expected to impact the embedded telematics market.

Asia Pacific would lead the Automotive Telematics OE Market

One of the drivers for the Asia Pacific telematics market is the growing demand for driver behavior and billing services, particularly in China, Japan, and South Korea. The demand for telematics in the Asia Pacific is significantly driven by strong economic growth, ongoing advancement in the automotive sector and growing vehicle production with premium features. As safety regulations have been made in Japan and South Korea, the demand for telematics in these countries is already comparatively higher than other Asia Pacific countries. Owing to favorable government initiatives, telecom infrastructure (5G, 4G) has registered significant growth in APAC. The plans of global automakers to roll out vehicles with 5G are expected to further boost the market in China. For instance, in 2021, GM announced its plan to roll out 5G in the Chinese market during its Tech Day media event held in Shanghai. The 5G service will provide faster internet speeds over the OnStar 4G LTE Wi-Fi that it already offers in its vehicles. These faster upload/download speeds will enable over-the-air-updates in more vehicles and will also help new GM vehicles connect and communicate with other vehicles on the road (vehicle-to-vehicle) as well as the public road infrastructure (vehicle-to-infrastructure).

Moreover, increasing smartphone penetration will likely create a strong base for telematics. Also in 2022, India introduced it’s “Pay as You Drive” and “Pay how you drive” policies, this shall increase the use of Telematics in vehicles in India.

Key Market Players

The automotive telematics market comprises major manufacturers include Robert Bosch GmbH (Germany), AT&T INC. (US), Continental AG (Germany), LG Electronics (South Korea), and Verizon (US) among others.

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