After experiencing lukewarm initial growth, analysis suggests that the North American commercial vehicle telematics market may be poised to experience a second wave of technology innovations, application penetration and market growth. Specifically, multimodal communication network advancements, reduced costs, and increasing safety and security concerns will drive market growth between 2008 and 2013.
New analysis from Frost & Sullivan, North American Commercial Vehicle Telematics Markets, finds that the market earned revenues of more than $1.48 billion in 2007 and estimates this to reach $6.47 billion in 2013.
“In recent years, the North American commercial vehicle telematics market has not achieved the spectacular growth rates that many industry observers had projected it to attain,” says Sandeep Kar, Frost & Sullivan program manager. “The prevalence of several market restraints have decelerated the market’s growth and constricted it to remain in a state of flux. However, this is changing fast as the local-fleet, regional-fleet and trailer telematics markets experience growth momentum.”
The next level of telematic technologies will integrate telecommunications and focus on operations automation, security, communications, monitoring, prognostics and mobile resource management applications, according to the analysis. However, low awareness of the technology’s benefits, high system costs and the lack of standardized technology platforms pose major hurdles to the speedy adoption of these systems in the North American market, according to the analysis.
To spur growth, market participants need to develop scalable solutions based upon standardized multimodal communication network architectures that feature compatible technologies and communication links that provide maximum applications at optimal overall costs, according to the analysis.
The failure of telematics to deliver the desired performance during the initial stages of its development led to the exit and consolidation of market participants, according to the analysis; now, sustainable growth appears possible with the correction of fundamentals and the building of supporting structures.
“Since commercial vehicle telematics is currently in the development stage of its lifecycle, it is recommended that service providers aggressively market their value-added services by focusing on their ability to improve the productivity and profitability of local fleets,” notes Kar. “This will assist mass-market adoption of the technology, thereby enabling market participants to gain greater economies of scale by increasing their consumer base.”