The Global Automotive OEM Telematics Market 8th edition

The Global Automotive OEM Telematics Market 8th edition

The Global Automotive OEM Telematics Market is the eighth consecutive report from Berg Insight analysing the latest developments on the connected car market worldwide. This strategic research report from Berg Insight provides you with 260 pages of unique business intelligence including 5-year industry forecasts and expert commentary on which to base your business decisions.

The Global Automotive OEM Telematics Market

Telematics is a broad term that may be applied to a wide range of automotive connectivity solutions. Berg Insight’s definition of a car telematics system in this report is an automatic system designed for passenger cars that incorporates some form of cellular communications. Mobile networks have enabled online connectivity with two-way communications at the same time as GPS technology has been commoditised to the extent that satellite positioning can be integrated into virtually any device. Automotive manufacturers can choose between several connectivity options when creating connected car services, which are not mutually exclusive. The main options 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 into the smartphone. Car manufacturers often use a combination of these options to support different customer needs and demands in various markets.

Several categories of car telematics applications are now offered on a commercial basis by all major carmakers. 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 concierge services and convenience applications. Convenience applications mainly rely on embedded telematics devices to enable remote control of vehicle functions such as door lock/unlock, vehicle preconditioning (heating or cooling of the passenger compartment before a trip), EV charging management and finding the last parking position. Several other applications also exist, for instance usage-based insurance, leasing and rental fleet management as well as electronic toll collection and road charging. Carmakers are also exploring in-vehicle commerce platforms and data exchanges to offer telematics data to third-party service providers. During the past years, carmakers have supported third-party service providers with APIs enabling data access and SDKs for application development. A major trend in the connected car industry is moreover the increasing adoption of Android Automotive OS and Google Automotive Services (GAS). GM, Honda, Renault, Volvo Cars and Polestar already have cars on the road today equipped with Android Automotive OS and GAS. Several others 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’s leading carmakers have launched mass-market services in key regions. The drivers behind the adoption of OEM telematics are both commercial and regulatory. Regulatory initiatives related to safety and security will have a decisive effect on the adoption of OEM telematics in Europe.

The EU’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 72 percent of all new cars sold worldwide in 2022 wereequipped with an OEM embedded telematics system, up from 67 percent in 2021. North Americais the most advanced market in terms of premium telematics services with an attach rate of 89percent. The EU+EFTA + UK region is just behind and had an attach rate of 88 percent. Otherdeveloped markets such as Japan and South Korea currently have attach rates of approximately76 percent. China is an important market for telematics services with an attach rate of about 74percent in 2022. In other regions, the attach rate is relatively low at about 30 percent. GM, BMW,Toyota, Stellantis, Volkswagen, Ford and Mercedes-Benz are the leading adopters of embeddedtelematics, widely offering the technology as a standard feature across models and geographies.GM has offered telematics services for more than two decades, offering the technology as anintegral part of its value proposition in North America, Europe and China. BMW introduced itsConnectedDrive service in North America and Western Europe in 1997. Other major car brandsoffering embedded telematics on a broad scale include Hyundai, Honda, Nissan, Kia, VolvoCars, Renault, JLR, Geely and Tesla.

Berg Insight estimates that total shipments of embedded OEM telematics systems reached 50.3 million units worldwide in 2022. Growing at a compound annual growth rate of 9.0 percent, the shipments are expected to reach 77.3 million units in 2027. During the same time, the attach rate of embedded telematics units is forecasted to increase from about 72 percent in 2022 to 94 percent in 2027. The number of telematics subscribers using embedded systems is forecasted to grow at a compound annual growth rate of 16.1 percent from 202.3 million subscribers in 2022 to 426.4 million in 2027.