Telematics for Rental and Leasing Fleets 3rd Edition

Telematics for Rental and Leasing Fleets 3rd Edition

Telematics for Rental and Leasing Fleets is a strategy report fromBerg Insight analysing the latest developments on this market inEurope and North America. This strategic research report from BergInsight provides you with 145 pages of unique business intelligenceincluding 5-year industry forecasts and expert commentary on whichto base your business decisions.

Telematics for Rental and Leasing Fleets 3rd Edition

The concept of telematics is a combination of telecommunications – long-distancecommunications – and informatics – the science of information. Telematics in general thus refersto the collection of information related to remote objects such as vehicles via telecommunicationsnetworks. The introduction of telematics technology in the context of rental and leasingcommonly supports asset management and stolen vehicle tracking as well as carsharing anddigital mobility offerings. Solutions of the latter type generally enable automotive rental or leasingcompanies to differentiate their offerings to current and prospective clients. The connected caris a major trend in the automotive industry and most carmakers today offer telematics servicesas standard on new vehicles. Several categories of car telematics applications supported byboth aftermarket and OEM telematics systems are used by car rental and leasing companies.Examples include emergency call and roadside assistance, stolen vehicle tracking and recovery(SVT/SVR), vehicle diagnostics, convenience applications, keyless vehicle access and usage-based pricing.

Car rental services allow customers to rent cars for a specific period, usually ranging from a fewhours to a few weeks. The total average fleet managed by car rental companies in 2023 wasabout 4.4 million cars in Europe and North America. Vehicle leasing refers to the leasing of amotor vehicle for a fixed period at an agreed cost. The leasing market can broadly be dividedinto financial and full-service leasing. Vehicle leasing has historically mainly been a financialservice but now also allows customers to outsource the ownership and entire management oftheir vehicles in a full-service lease model. In a full-service lease, the client pays the leasingcompany a regular monthly lease payment to cover financing, depreciation of the vehicle andvarious services provided in relation to the use of the vehicle.

Berg Insight expects that the number of telematics systems deployed by rental and leasingcompanies will increase at a steady rate in the next years. Key influencers expected to boost thetelematics market in this vertical include the connected car trend driven by the vehicle OEMs andrelated service providers, the need for fleet owners to increase fleet utilisation and decrease thecarbon footprint, the emergence of new mobility services and the general electrification trend inthe automotive industry. The total number of active OEM and aftermarket telematics systems inuse in the European rental and leasing market reached around 3.28 million at the end of 2023.The total installed base in Europe is forecasted to grow at a compound annual growth rate(CAGR) of 15.6 percent to 6.79 million in 2028. In North America, the total number of OEM andaftermarket telematics systems in use is forecasted to increase from around 2.89 million at theend of 2023 to reach 5.53 million by 2028, representing a CAGR of 13.9 percent. The telematicspenetration rate in the total population of rental vehicles in Europe and North America was about37.2 percent and 42.8 percent respectively at year-end 2023. The corresponding numbers forthe car leasing market were 32.2 percent in Europe and 44.3 percent in North America at the end of 2023.

The car rental and leasing markets are gradually consolidating, and a handful of major NorthAmerican and European companies dominate each market. Rental and leasing companies withnotable activities within the implementation of telematics include Enterprise Mobility, HertzCorporation, Avis Budget Group, Europcar Mobility Group, Sixt Group, Arval, Leasys, ElementFleet Management, Ayvens and Alphabet. Players in the rental and leasing industry can eitherdevelop telematics programs independently or rely on partners to varying degrees. Multipleleading rental and leasing companies use a combination of centralised and decentralisedtelematics strategies across their footprints. In addition to the traditional car rental operators,several companies exclusively offer fully digital and contactless car rental services enabled bytelematics solutions. Examples of these are Liigu, Locauto Elefast, Toosla and Virtuo.

The telematics solution market for rental and leasing fleets is dominated by players such asGeotab, Targa Telematics, OCTO Telematics, CalAmp (Lojack), Webfleet, Powerfleet, Munic,MySmartObject, Connected Cars and RentalMatics. Leading hardware telematics vendors suchas Teltonika Telematics and Ruptela are also serving the market. Several telematics serviceproviders such as Fourth Tier, RentalMatics, TSD Mobility Solutions, Zubie, WITTE:digital, HQRental Software, Kirrk and Autofleet specialise in solutions for the rental industry. Some playersspecialising in carsharing telematics have broadened their product portfolio to target car rentaland leasing companies. Examples of leading carsharing telematics technology vendors includeInvers, Vulog, OpenFleet, WeGo Carsharing, Convadis and Atom Mobility. Automotive OEMs areincreasingly taking an active part in the ecosystem by offering OEM telematics services orutilising connected car services via its captive rental and leasing companies. Examples includeGeneral Motors, Stellantis, Volkswagen, Ford, Renault-Nissan-Mitsubishi, Toyota, Tesla, BMW,Mercedes-Benz and Hyundai.