How Will Greater Adoption of Technologies in Drive the Automotive Telematics Market?

In 2019, the worldwide automotive telematics market stood at $27.7 billion and is expected to touch $149.9 billion in 2030. The market is predicted to grow at a 16.6% CAGR from 2020 to 2030 owing to the growing adoption of connected vehicles and the rising count of collaborations and partnerships. The fastest growth in this market will be observed in LAMEA in the coming years. This is because of the deployment of safety features in vehicles, connected vehicle technologies, and skyrocketing fleet telematics demand.

A major driver in the automotive telematics market is the increasing number of partnerships and collaborations among telematics solution providers, numerous system providers, and original equipment manufacturers. For instance, Avis Budget Group Inc. collaborated with Verizon Communications Inc., to initiate an everything-in-one digital travel assistant, especially for consumers of Payless Car Rental Inc. and Avis Budget Group Inc. with the help of Verizon’s intricate 4G LTE network.

The greater adoption of technologies in the automotive telematics market will help its players to adapt to the changing dynamics and tastes & preferences of consumers. The amalgamation of 5G network innovations into telematics solutions offers lucrative growth chances for key players in this market owing to higher radio frequencies than the 4G network. There is a strong need for better network connectivity to ease the working of vehicle technologies as telematics solutions increase their complexity. The first company to incorporate a 5G network in the U.S. was Verizon Communications Inc. in December 2019.

Under the segmentation of vehicle type, the automotive telematics market can be bifurcated into commercial vehicles and passenger vehicles. The commercial vehicle category is projected to advance at a higher growth rate in the coming years. This can be ascribed to enhanced integration of cloud-based fleet management telematics solutions, coupled with the implementation of strict government policies. However, the growing population and rising disposable income will push the purchasing parity of consumers and will, in turn, increase the demand for passenger vehicles as well.