The Global Automotive OEM Telematics Market 9th Edition

The Global Automotive OEM Telematics Market 9th Edition

The Global Automotive OEM Telematics Market is the ninthconsecutive report from Berg Insight analysing the latestdevelopments on the connected car market worldwide. This strategicresearch report from Berg Insight provides you with 270 pages ofunique business intelligence including 5-year industry forecasts andexpert commentary on which to base your business decisions.

The Global Automotive OEM Telematics Market 9th Edition

Telematics is a broad term that may be applied to a wide range of automotive connectivitysolutions. Berg Insight’s definition of a car telematics system in this report is an automatic systemdesigned for passenger cars that incorporates some form of cellular communications. Mobilenetworks have enabled online connectivity with two-way communications at the same time asGPS technology has been commoditised to the extent that satellite positioning can be integratedinto virtually any device. Automotive manufacturers can choose between several connectivityoptions when creating connected car services, which are not mutually exclusive. The mainoptions are embedded telematics devices, tethered devices and integrated smartphones.Connectivity and intelligence can be built into the car in the form of embedded systems.Solutions relying on integrated smartphones leverage the connectivity and intelligence built intothe smartphone. Car manufacturers often use a combination of these options to support differentcustomer needs and demands in various markets.

Several categories of car telematics applications are now offered on a commercial basis bycarmakers. Examples include eCall and roadside assistance, stolen vehicle tracking (SVT),vehicle diagnostics, over-the-air (OTA) updates, connected navigation and infotainment,entertainment services such as music and video streaming, Wi-Fi hotspots as well as conciergeservices and convenience applications. Convenience applications include remote control ofvehicle functions such as door lock/unlock, vehicle preconditioning (heating or cooling of thepassenger compartment before a trip), EV charging management and finding the last parkingposition. Several other applications also exist, for instance, usage-based insurance, leasing andrental fleet management as well as electronic toll collection and road charging. Carmakers arealso exploring in-vehicle commerce platforms and data exchanges to offer telematics data tothird-party service providers. During the past years, carmakers have supported third-partyservice providers with APIs enabling data access and SDKs for application development. A majortrend in the connected car industry is moreover the increasing adoption of Android AutomotiveOS and Google Automotive Services (GAS). GM, Honda, Renault, Lincoln, Nissan, Volvo Carsand Polestar already have cars on the road today equipped with Android Automotive OS andGAS. Several other car OEMs have announced plans to adopt these in future car models.

The connected car is a major trend in the automotive industry and virtually all of the world’sleading carmakers have launched mass-market services in key regions. The drivers behind theadoption of OEM telematics are both commercial and regulatory. Regulatory initiatives related tosafety and security will have a decisive effect on the adoption of OEM telematics in Europe. TheEU’s eCall initiative and Russia’s ERA-GLONASS have made an automatic emergency call devicea mandatory safety feature in all new car models sold. In North America, commercial serviceshave driven the adoption of OEM telematics services that have evolved from being a differentiatorto a mainstream feature now offered by all the leading car brands on a large majority of theirmodels.

Berg Insight estimates that about 75 percent of all new cars sold worldwide in 2023 wereequipped with an OEM-embedded telematics system, up from 72 percent in 2022. North Americais the most advanced market in terms of premium telematics services with an attach rate of 91percent. The EU+EFTA+UK region is just behind and had an attach rate of 90 percent. Otherdeveloped markets such as Japan and South Korea currently have attach rates of approximately81 percent. China is an important market for telematics services with an attach rate of about 78percent in 2023. In other regions, the attach rate is still below 40 percent. As many volume brandssuch as Toyota, GM, Stellantis, Ford, Volkswagen, Hyundai, Honda and Nissan now offerconnected services for free in their main markets, they will constitute a large part of the growthof connected car subscriptions in the coming years. Premium brands such as BMW, Mercedes-Benz and Audi have offered telematics services as a standard feature across models andgeographies for more than a decade and have a considerable number of subscribers. Othermajor car brands offering embedded telematics on a broad scale include Kia, Tesla, Renault,Geely, BYD, Volvo Cars, SAIC, GWM and Changan Motors.

Berg Insight estimates that total shipments of embedded OEM telematics systems reached 59.3million units worldwide in 2023. Growing at a compound annual growth rate of 6.9 percent, theshipments are expected to reach 82.9 million units in 2028. During the same time, the attach rateof embedded telematics units is forecasted to increase from about 75 percent in 2023 to 94percent in 2028. The number of telematics subscribers using embedded systems is forecastedto grow at a compound annual growth rate of 14.6 percent from 239.7 million subscribers in 2023to 473.8 million in 2028.