Fast-tracking telematics?

“Telematics is poised to witness exponential growth over the next five years as new applications are developed to monitor fleet activity to control costs, boost productivity, improve accountability and maintain full compliance with government regulations”.

This statement was made by an advanced data analytics expert at Quantzig, a global analytics and advisory firm with offices in the US, UK, Canada, China and India.

In an article that sheds light on the role of telematics and data analytics in boosting profitability, the company notes that as technology has evolved, telematics, combined with advanced data analytics, has moved from a closed system to an open platform. “An open platform telematics system can integrate accessories, software and mobile apps to provide added insight into business operations.”

ResearchAndMarkets.com, one of the largest market research stores with clients across the globe (including more than 450 of the Fortune 500 Clients), adds that before Covid-19, the vehicle telematics market was growing exponentially. Many factors contributed to this situation, such as leveraging the next-generation telematics protocol solutions that enhance service delivery, increase adoption of sensors and connectivity technology, and increasing demand for road safety technologies.

In “Vehicle Telematics Market by Technologies, Infrastructure, Connectivity, Distribution Channels, Vehicle Types, and Applications 2021 – 2026” ResearchAndMarkets.com highlights that the global lockdown had a particularly harsh impact on all production-oriented industries.

“This triggered an adverse effect on the vehicle market, as global manufacturing plants were shuttered, causing supply issues for automobiles and vehicle parts. Telematics solutions were directly and indirectly affected by this through 2020.

“However, we are seeing signs of improvements in production that will improve the fundamental outlook going forward. For example, increased chipset availability is supporting video-based telematics solutions that we see growing exponentially in the coming years as they demonstrate great promise in the aftermarket fleet telematics market. The reason is its significant value proposition and higher ROI that are anticipated to make it the de facto standard for vehicle safety checklist in most fleets.”

Closer to home, Marius van Reenen, chief operating officer of MiX Telematics Africa, joined a panel discussion with industry peers at the recent Finance and Insurance (F&I) Summit to talk about the impact of the Covid-19 pandemic on the industry.

The event took place virtually in May and saw over 550 delegates benefit from a dynamic and highly interactive programme, which included local and international experts, industry stakeholders, motivational speakers and sales experts.

Reflecting on the performance of the industry and Mix Telematics, a leading global software as a service (SaaS) provider of connected fleet management solutions, Van Reenen acknowledged that there were still challenges in certain verticals such as rental, hospitality and entertainment, but noted that the company continued to perform well despite the tough economic conditions.

“It’s been a very interesting year. Obviously with Level 5 lockdown in South Africa last year, we saw a severe drop in both consumer and commercial vehicles with movement going down to virtually nothing since only certain vehicles were allowed to travel. However, what is very promising is that in the last three months, we have seen an increase in fleets across most industries and we look forward to the levels that we experienced in 2019,” he commented.

Van Reenen also addressed how data collection and analysis needed to be adapted to the new norms of 2021 and beyond to meet the needs of both B2B and B2C customers.

“Historically, the majority of products were track-and-trace type solutions, as the main interest was a vehicle’s location at a particular time. Now, however, the world is changing: asset data is continuously consumed and further enriched with other data sets that provide actionable information and business intelligence,” he said.

This type of rich data in terms of risk management, safety and efficiency is invaluable for businesses and consumers. For example, dealerships can use the data to ascertain when a vehicle’s next service is due, helping to communicate with customers and making sure that the terms of their service and maintenance plans are adhered to so that claims are not repudiated.

“It’s about understanding the underlying behaviour and being able to predict what maintenance is likely to be needed on particular vehicles, helping dealerships structure their stock holdings of consumables and related items in order to be able to service a customer timeously – which is all possible with rich data and artificial intelligence,” he said.

ResearchAndMarkets.com’s report agrees that emerging technologies are enabling completely new and enhanced B2C and B2B telematics use. “The 5G enabled global telematics market will reach US$87,9 billion by 2026, growing at 50,2% compound annual growth rate (CAGR),” it reports. “The global vehicle telematics market will reach US$179,5 billion by 2026, growing at 11,6% CAGR.”

Quantzig adds that the challenge for telematics will be to balance the benefit for public safety with the need for privacy. “This is a challenge that all technology and Internet of Things solutions providers will face. As automobiles become increasingly connected with devices, vehicles will be generating a considerable amount of information.”

It is wonderful that this information is being used to benefit customers with predictive maintenance and monitoring. It will be interesting to see how telematics grows over the next five years and beyond.