The automotive industry has been changing with the emergence of electric mobility, autonomous driving, connectivity, sustainability policies, and consumer preference for car sharing, and ride-hailing services. The automotive market has become highly disruptive and competitive and is developing technologically enhanced products and solutions like the telematics system. Telematics, the intersection of telecommunication and automotive informatics, refers to any technology that is used to send, receive and store information and remotely control other devices. Telematics relates to everything from automotive insurance premiums to fleet tracking and connected cars, and to every modern OEM infotainment system. Automotive telematics provides entertainment, information, navigation and remote diagnostics. It helps OEMs to meet consumer demand for connected vehicles and ecosystem.
A telematics system consists of hardware and software which incorporate some form of cellular communication, allowing the transfer of data between the car and its surroundings. In the automotive sector, telematics offers a wide variety of features like vehicle tracking, GPS and navigation, accident recording and notification, vehicle theft tracking, vehicle logbook, mileage reporting, vehicle diagnostics, fuel management, proactive maintenance, driver behaviour and journey analysis.
The growing importance of connectivity and safety, advancement in smartphone technology, and high-speed internet connectivity has transformed the telematics industry. To suit the game-changing disruptions on the horizon, the original equipment manufacturers (OEMs) incorporate advanced telematics services in all the vehicle categories and continuously better their offerings.
The world vehicle telematics market valued at USD 39 billon, is expected to grow at a CAGR of 17 percent to USD 103 billion by 2022, according to a Roland Berger report: ‘Telematics in India: Trends and Opportunities’.
Global telematics market is dominated by commercial vehicles which account for nearly two-thirds of the total share. For passenger vehicles it is used mainly in cab services and by medium and high-end cars. Telematics is getting into the affordable category of passenger cars also.
Indian telematics is one of the fastest emerging markets, primarily driven by the constantly rising fuel prices, increasing number of accidents and vehicle thefts, demand for vehicle navigation, and the need to monitor fuel pilferage.
Telematics was introduced for the first time in India in early 2000. The commercial vehicle major Ashok Leyland launched ‘Alert’, a GPS- based telematics service, at the Auto Expo in 2008. The market is relatively old, but adoption rate has been low for want of awareness. In 2012, the government had announced plans to install tracking and fleet management services in 400,000 buses by 2017. In 2015, GPS and panic buttons were made mandatory in all taxis.
The regulatory push for passenger safety, spreading awareness and surging consumer preference have been driving the demand for telematics in India. The vehicle OEMs and suppliers of telematics are upbeat about that.
Europe, the Middle East and Africa (EMEA), with 38 percent share, dominate the global commercial vehicle telematics market. The Asia Pacific (APAC) region comes next. Driven by countries such as China, Japan, India and the UAE, it is expected to lead the market by 2022, according to the Roland Berger report.
The UAE Commercial Vehicle Telematics Market revenues are projected to grow at a CAGR of 7.5 percent during 2018-24, according to 6Wresearch. The rise in number of road accidents, security concerns, increasing number of taxis, and the need for fleet management are expected to push the adoption of telematics solutions in the country.
In India, heavy commercial vehicles (HCVs) dominate the telematics demand. The medium commercial vehicles (MCVs) also are falling in line mainly to manage the fleet more efficiently.
Initiatives like “Toyota Connect” for cars, “Tata SkoolMan” for school buses, “Tata FleetMan”, Eicher Drive Telematics, JCB’s “Livelink” and Mahindra & Mahindra’s “Digisense” and similar other systems are expected to accelerate the application of telematics in Indian vehicles in a big way in the coming years.
In UAE the key players in the commercial vehicle telematics market include Teltonika Ltd., Ruptela, Atrack Technology Inc., Cartrack Technologies LLC, Meitrack, and CERT Telematics LLC.
The major Chinese telematics firms such as Huawei Technologies, Flaircomm Microelectronics and Shenzhen Thread Tech face rivalry on the home turf from foreign players. The Chinese carmakers like Chang’an Automobile and Trumpchi seek to co-develop telematics products with automotive electronics companies to gain market competitiveness and lead position at affordable cost.
Vehicle tracking, route calculation, fuel pilferage checks, and other telematics offerings attract the commercial vehicle fleet operators. They hope to deal, at least partially, with the woes of rising fuel prices and narrowing profit margins to gain competitive advantage in a growing market.
The Indian government initiatives like the proposed Rs 12,000-crore ($2.4 billion) investment to upgrade police forces, and the consolidation of security grids in all the major cities will also drive the telematics market demand.
Luxury cars such as Mercedes and BMW have in-built roadside assistance service such as BMW Assist, GM’s OnStar and Mercedes-Benz mbrace which use the cellular network and Global Positioning telemetry to locate or guide the vehicle. They also have advanced features, for instance BMW has installed several systems similar to media devices seen in the home setting. They have taken the home theatre and put it into the backseat for many families to enjoy.
The adoption of telematics in the small and medium passenger vehicle segments and by single truck owners has been slow mainly owing to its prohibitive costs. However, with the changing ownership patterns the market dynamics are changing.
An innovative example of telematics in India is the one being implemented in the state of Kerala. A She-Taxi service, launched in collaboration with Maruti Suzuki Ltd and Kerala State Women’s Development Corporation to boost safe travel for women, has been designed and integrated with web-mobile based convergent technologies that monitor and track activities of both passengers and cab drivers.
The She-Taxis are equipped with several safety features like separate safety alert switches for drivers and passengers, driver safety systems on a mobile phone, safety alert receivers at control stations, GPS-tracking, controlling speed, rash driving, sudden braking and turning, remote engine switch-off and theft protection – all an extension and part of telematics for making taxi services safer. According to Frost & Sullivan, the telematics market in India is expected to reach 1.3 million units by 2021. However, infrastructure development will be crucial for innovation in telematics.
The increasing number of vehicles affects air quality. Governments across the world are upgrading emission standards and promoting non-polluting green vehicles to reduce the GHG (greenhouse gas) levels in the atmosphere. Hybrid energy, electricity, and other power sources like biofuels, solar or wind energy are used in green vehicles.
According to a senior analyst at Technavio for automotive electronics, “The developing countries like India and China are adopting standards similar to European emission norms to moderate vehicular emissions. GB 19578 and GB 27999 are the current regulations implemented in China. These standards target the fuel consumption of passenger cars to be 5L/100KM by 2020. India, which follows BS-IV norms, will jump to BS-VI by 2020.” In this process, transition to electric and hybrid vehicles will be the way forward. Telematics will give a boost to this.
Global technology company KPIT is leveraging its two decades of experience in automotive engineering to build solutions and products for passenger buses, school buses, and commercial vehicles in India and other developing countries to create safe, smart, and sustainable mobility.
It has recently released India’s first ARAI (Automotive Research Association of India)-certified AIS 140 (Automotive Industry Standard)-compliant vehicle telematics and emergency button solution. It is in line with the Indian Ministry of Road Transport and Highways (MoRTH) 2016 dictat. The AIS 140 regulation, applicable from April 1, 2018, mandates a vehicle tracking device and one or more emergency button(s) in all existing and new public service vehicles. Such regulations will only increase the adoption of telematics in vehicle across segments, making it a standard feature soon.
KPIT’s product is designed for the Indian operating conditions and aligned to future AIS140 roadmap with features like Vehicle Health Monitoring, CCTV Camera, Passenger Information System, etc. It can seamlessly integrate with the governments’ command centre and send emergency alerts as directed in the regulation. It can be easily installed on new and running vehicles.
The product has provision to integrate market-first features like Journey Risk Management for driver safety, CAN-based diagnostics for easy maintenance, and end-of-line diagnostic tools. Transport operators will have an option to avail KPIT’s cloud platform to ensure higher operational efficiency through real-time tracking, route optimization, driver behaviour monitoring, etc.
According to Sachin Tikekar, President and Board Member, KPIT, “We are very excited to be part of India’s safety mission to develop intelligent transport systems and support the government initiatives.”
More players are jumping into the telematics bandwagon. SML Isuzu has launched its advanced Telematics Solution in partnership with Minda iConnect; Coimbatore-based Pricol Limited, a leading manufacturer of automotive components, has received the ARAI certification for telematics devices; Motherson Invenzen XLab, a subsidiary of Samvardhana Motherson Group (SMG), has launched a plug-in telematics device, Rollr Mini, for the B2C users. It has features like live-tracking and diagnostics.
“Telematics is just kicking in and it will have many different manifestations. We are starting with the basic track and trail kind of systems, which can provide diagnostic help but what we see for the future is that all of them will combine with the infotainment system to provide a wholesome connected experience in the car,” Amit Upadhyay, Chief Technology Officer, Motherson Invenzen XLab, said. “We are working with some cloud partners where we will be using their integrated voice systems. Then there are some partners who are working on merging of systems that could be linked to home automation system while driving a car. Such futuristic systems also are on the anvil,” he said.
Smart tractors with telematics devices are ready for launch in India. IoT service provider Vodafone is helping tractor manufacturers in this. The smart tractors will allow the farmer to contact the call centre. It had announced telematics partnership with car manufacturers for safe driving, and predictive diagnostics. Vodafone is also getting into partnerships with truck manufacturers for automation and information about how far the trucks travel, location, security and safety, etc.
The Indian telematics industry is very competitive, and the competitive environment is expected to intensify with increasing product extensions, more advanced offerings, technological innovations and mergers and acquisitions. To remain competitive, vendors have to develop new technologies and keep abreast of the global developments and emerging technologies that could potentially impact their product portfolio. The OEMs operating in India are entering into partnerships with telematics players to offer integrated fleet management solutions.
The Formula One Racing also is taking to telematics. The professional drivers have been utilizing telematics for years to determine the exact locations of opponents on race tracks.
The use of telematics can convert a regular vehicle into an intelligent one. The automobile industry has to recognize telematics as a critical tool to monitor performance, detect flaws in vehicles and to ensure driver safety. Vehicles should have cutting edge features such as fuel management, GPS navigation, vehicle tracking, automatic driving assistance systems support, triggering alerts to increase utility and value offered to the customer. In the long-run, such connected vehicles will be an integral part of the proposed smart cities of the future. They will speed up the modernisation of transportation in India
Through a telematics device, car manufacturers can reduce cost as well as cycle times for new models. It used to take over five years to get a new car model from the concept stage to the market. According to Technavio, automakers can potentially shorten design time-frames by analysing the real-time performance data of crucial components such as engines, thanks to the data derived from millions of cars that are appended with telematics units.
Car manufacturers can also ensure additional savings using automotive telematics systems to learn which component of the vehicle is failing and why, thereby significantly reducing recalls. They can evaluate suppliers and parts on a daily or hourly basis– even in real time- rather than responding to statistical reports. Manufacturers can gain data on how components operate under different circumstances and hold suppliers accountable for deficiencies in specifications and performance levels.
Forward thinking companies outside the automotive industry are also reaping the benefits and opportunities offered by connected vehicles. Using telematics data, early adopters in the insurance sector are setting up policy rates based on how fast, how far and under what conditions does an individual drive. Technavio says, retailers, entertainment providers, and restaurants can also leverage intelligence on driver preferences and locations to make context and content-appropriate offers.