U.S. Commercial Telematics Market Expected to Reach $3.90 Billion by 2027—Allied Market Research

According to a recent report published by Allied Market Research, titled, “U.S. Commercial Telematics Market by Solution Type, Application, and End-User: Regional Opportunity Analysis and Industry Forecast, 2020–2027,” 

The U.S. commercial telematics market was valued at $2.64 billion in 2019, and is projected to reach $3.90 billion by 2027, registering a CAGR of 7.8% from 2020 to 2027.

Presently, California dominates the market, followed by Texas and Florida. However, Indiana is expected to grow at a higher CAGR during the forecast period.

Telematics/connected devices are a combination of devices, which are installed in a vehicle and used to provide real-time information about the vehicle. They are installed in a vehicle to keep a record of the information related to the driving behavior of the vehicle, status of the vehicle, distance covered by the vehicle, and other things. Telematics in a vehicle are connected at the on-board diagnostics port (OBD II Port) of the vehicle, which is located beneath the vehicle steering wheel, thus making the installation of the device in a vehicle an easier process. Once the component is installed in the vehicle, it starts to record the information on numerous aspects such as driving behavior, live status of the vehicle as well as the surrounding of the vehicle.

Telematics are preferred to be installed majorly in commercial fleet as suggested by insurance providers to the fleet owners. With the installation of telematics devices in a vehicle, several benefits can be received such as heavy discount in insurance based on the driving skills of the driver. In addition, they track the driving behavior of the driver and alert the driver in case of rash driving.

Numerous government regulations have been implicated across different states of the U.S., which has encouraged the fleet owners to install telematics/connected devices in their already running vehicles as well as their out of service vehicles. Installation of telematics helps to keep a track of the vehicle condition and provides real-time information about the vehicle. For instance, the government of California has allocated single-source Blanket Purchase Agreement (BPA) to Geotab, a global leader in IoT and connected transportation, to provide commercial fleet with a fully-integrated, best-in-class telematics solution. 

Numerous companies, such as Harman International, AERIS, Redtail Telematics, Connexas, Transpoco, and others, are operating efficiently in the telematics industry and offering better & efficient services to their customers. It includes features such as usage-based insurance, vehicle location & stolen vehicle recovery, and dash camera being the most used services.

Factors, such as government regulations for vehicle telematics and rise in trend of connectivity solutions, drive the growth of the U.S. commercial telematics market. In addition, vehicle diagnostic due to telematics systems also propels the growth of the market. However, threat of data hacking, high installation cost, and lack of uninterrupted & seamless internet connectivity hinder the growth of the market. Furthermore, intelligent transportation system and improved performance of autonomous vehicles impose a remarkable growth opportunity for the U.S. commercial telematics market. 

Covid-19 Impact Analysis

• COVID-19 has spread worldwide without acknowledging borders. It has impacted all industries, sectors, and aspects of lives with devastating economic & financial losses and significant uncertainties.
• The growth of the commercial telematics market is directly linked to the transportation & logistics industry, which was the first one to undergo complete shutdown as transportation of goods across cities came to a halt.
• Decline of vehicle manufacturing & sales is expected to have a far-reaching impact on the market.
• The change in behavior of customers toward COVID-19 crisis, travel restrictions, and the ensuing economic crisis resulted in a dramatic drop in demand for vehicle sales.

Key Findings Of The Study

• By solution type, the OEM segment is expected to register a significant growth rate in the U.S. commercial telematics market analysis during the forecast period.
• Based on application, the services segment is expected to register a significant growth rate in the U.S. commercial telematics market analysis during the forecast period.
• Based on the end-user, the government agencies segment is expected to register a significant growth rate in the U.S. commercial telematics market analysis during the forecast period.
• This study includes analytical depiction of the market along with current trends and future estimations to determine the imminent investment pockets.
• In 2019, California led the market in the U.S. region.
• The key players profiled in the U.S. commercial telematics market include Cartrack, Continental AG, Daimler Fleetboard GmbH, Fleet Complete, Geotab Inc., MiX Telematics, Navistar Inc., Omnitracs, TomTom International BV., and Trimble Inc.