Global revenue from automotive telematics systems will grow at a compound annual growth rate (CAGR) of nearly 17 percent to more than $6.7 billion by the end of 2023, according to new research from business information provider IHS Markit.
Other points highlighted by the report:
- More than 33 million light vehicles equipped with some form of telematics were produced in 2016 globally. It is expected that production of such light vehicles will grow at a CAGR of 11 percent to reach over 66 million units in 2023. Approximately 70 percent of new light vehicles produced in 2023 will be equipped with some form of OEM telematics systems.
- CE telematics continue to lead the global automotive telematics market since it is a relatively low-cost solution and available in a wide range of vehicles. It currently makes up nearly half of the market, the new research says.
- The rapid growth of the smartphone market has had a significant impact on the telematics market, as many OEMs currently offer smartphone integration via Apple CarPlay and Google Android Auto or other smartphone projection-mode solutions as part of their connected car offerings.
- The demand of embedded telematics control units (TCUs) will increase, especially with the European eCall mandate that goes into effect in 2018. Then, the total revenue of embedded TCUs is expected to grow at a CAGR of 15 percent by 2023.
- Hybrid telematics solutions, using both an embedded TCU and a connected CE device to provide a two-way data connection to the car, will have the strongest growth among the three type of telematics systems during the forecast period, the production of hybrid telematics systems will surpass the production of other types of telematics systems in 2018. It will continue to lead the market throughout the forecast period.
- The automotive industry is facing new challenges and issues that need to be solved. In one example, cybersecurity is one of the most important issues in the connected car era. Since the role of telematics increases in importance as connectivity becomes essential for V2X and autonomous driving cars in the future, the automotive industry is working to find and develop solutions to protect its telematics systems from cyber-attacks in the future, and must continue these efforts as technologies continue to advance.