Fleet management will flourish

October 24, 2023

Fleet management is set to flourish in the future, so we delve into the global and domestic markets to see what exactly is expected to drive this growth.

The global fleet management system market achieved a volume of US$23.8 billion in 2022 and is set for significant growth in the future. Leading international market research company ResearchAndMarkets.com says that the sector is expected to attain a market value of US$43.1 billion in the next five years.

“This growth trajectory reflects a compound annual growth rate (CAGR) of 10.5% during the period from 2023 to 2028,” it states in its report: Fleet Management System Market: Global Industry Trends, Share, Size, Growth, Opportunity and Forecast 2023-2028.

The researchers highlight several trends and drivers contributing to the growth of the fleet management system market. These include:

Profitability maximisation: Businesses are increasingly adopting fleet management systems to optimise profitability, fuel management, and regulatory compliance.
Government regulations: Government agencies worldwide are encouraging fleet management system adoption by implementing vehicle maintenance and tracking regulations.
Wireless technology: The low cost and accessibility of wireless technology are driving its adoption in fleet management systems.
Integration of advanced technologies: Integration of artificial intelligence, machine learning, the internet of things (IoT), and big data analytics into fleet management systems is positively influencing the market.
Driver safety concerns: Rising safety concerns for drivers globally are boosting the demand for fleet management systems.
Intelligent transport systems: Increasing use of intelligent transport systems in the logistics industry for real-time courier delivery is supporting market growth.
Mobility-as-a-Service (MaaS): MaaS adoption to reduce traffic and carbon footprint is propelling the market.

“North America, including the United Sates and Canada, leads the global fleet management system market. Factors driving this growth include increasing sea trade, maritime defence focus, rising shipping traffic volumes, and a focus on vessel and driver safety. The Asia-Pacific region is expected to witness the highest CAGR, attributed to a large population base, rising healthcare expenditure, and the demand for outsourcing services by pharmaceutical and biotechnology companies,” notes the report.

The local market isn’t going to miss out on this growth either. According to a new research report from leading IoT analyst firm Berg Insight, the number of active fleet management systems deployed in commercial vehicle fleets in South Africa reached an estimated 2.1 million in Q4-2022. Growing at a CAGR of 12.2%, this number is expected to reach 3.8 million by 2027.

Berg Insight points out that South Africa has a relatively mature telematics market and the penetration rate is comparably high from an international perspective, although far from all deployments are full-scale advanced fleet management solutions. A notable share of the installed fleet telematics systems on the South African market is represented by comparably low-end tracking systems like light fleet management solutions, including stolen vehicle recovery systems extended with basic fleet management features.

The report adds that our fleet management market is dominated by five domestic players with broad telematics portfolios, which together represent 70% of the total number of fleet management systems in use. “Berg Insight ranks Cartrack, Tracker, and MiX Telematics as the largest providers of fleet management solutions in South Africa,” says Rickard Andersson, a principal analyst at Berg Insight. He adds that Cartrack alone has more than half a million active fleet management units in South Africa, while the two remaining top-five players are Ctrack and Netstar.

Other top-10 players on the South African fleet management market include local providers such as Bidtrack (Bidvest Group), Digicell and GPS Tracking Solutions (Eqstra Fleet Management), and international players including Webfleet (Bridgestone) and Gurtam.

Lytx, Autotrak, Digital Matter, Scania, and Powerfleet (Pointer SA) are additional top-15 providers, all having estimated installed bases of at least 15,000 fleet management units in the country. Players just outside the top list include Key Telematics/Radius Payment Solutions, Geotab, Mtrack (Electronic Tracking Systems), iCAM Video Telematics, FleetCam, and Globaltrack. “In addition to Scania, comparably large installed bases of OEM fleet telematics systems in SA have also been achieved by manufacturers such as Daimler Truck, UD Trucks, and Volvo Trucks,” Andersson says.

The new study also includes an outlook on the overall African market. “Africa is clearly a highly diverse geographic region from a fleet management perspective. The continent can in general be divided into three subregions – South Africa, Sub-Saharan Africa (excluding South Africa) and Northern Africa,” the report points out. “The South African fleet telematics market is far ahead of the rest of the continent in terms of adoption, whereas Sub-Saharan Africa is the least developed region if excluding South Africa. Northern Africa is comparably advanced and well ahead of Sub-Saharan Africa when it comes to fleet telematics penetration, though still quite a bit behind South Africa.”

It adds that beyond South Africa, the African fleet management market is rather challenging. “The weak economic conditions and foreign exchange rate fluctuations, in combination with the unstable political climate, make the rest of Africa a challenging business environment overall,” it expands.

Nevertheless, there are opportunities for growth, and we’re looking forward to seeing what the future holds for our continent and the fleet management market on a global scale, with Berg Insight noting that there are promising prospects for players adapting to local market dynamics, as the rest of the African market is able to offer considerably more untapped opportunity at this stage than South Africa.