Vehicle Telematics Market Trends

Growth Drivers

• Need to Minimize the Fuel Consumption - With the rising prices and shortage of fuel, the government is focusing on minimize its usage. Also, the high production of vehicles is expected to increase the demand of fuel which is generating an insufficiency for everyone, which in turn, is expected to bring lucrative growth opportunities. In 2020, the demand of fuel from transportation sector of both OECD and non-OECD regions was equal. Moreover, by 2040, the fuel demand in non-OECD region is likely to increase twice, from about 47 quadrillion btu (British thermal units) in 2012 to 94 quadrillion btu.
• Rising Popularity of Movement and Location Tracking Feature - Location tracking is useful to protect the vehicle from dangers and facilitates to contact for assistance in emergency circumstances. Currently, nearly 98% of cars is likely to have location tracking technology in next few years and there are around 78 million cars on road, embedded with tracking technology.
• Increase in Demand for Semiconductor Chips and its Production - There had been the shortage of semiconductor chips in past few years, which has increased its demand across the market. The global sale of semiconductor reached almost half a trillion dollars in 2021.
• Soaring Need for Automobiles with Advanced Safety Features - Owing to rising cases of accidents, the need of advanced safety feature is growing and turned out to be of significant importance. In the United States, around 45% wish to have blind spot warning system and about 51% expect to have backup warning from the vehicle.
• Increasing Number of Automobiles with Connectivity Solution - Nowadays, with the rising prevalence in IoT and 5g adoption, people expect their car to perform all the functions similar to their computers and mobile phone which is making connectivity solution the need of an hour. By 2030, more than 2 billion connected cars are expected to exist worldwide.

 Challenges

• Risk of Data Theft Associated with Telematics’ Data - The telematics system contains huge volume of sensitive data which is vulnerable to risk. The complexity of the telematics system leaves a space for an error in cybersecurity. The breach of network might happen during the transfer between the telematics sensors. Thus, security concerns involved in vehicle telematics system is expected to hinder the market growth.
• Exorbitant Cost of Installation for Getting Connectivity Feature
• Difficult in Interoperability in Devices Produced by Different Manufacturers