- LCV telematics market currently under penetrated, leading to market opportunities
MOUNTAIN VIEW, California, March 13, 2013 /PRNewswire/ -- Economic uncertainty in North America is compelling light commercial vehicle (LCV) fleet managers to cut costs and extend their fleets' lifecycles. While the early adopters of the LCV market are looking for basic track and trace solutions to track their vehicles, larger fleets are looking at integrating Fleet Management Solutions (FMS) to their business objectives and mitigate risks.
New analysis from Frost & Sullivan (http://www.automotive.frost.com), Strategic Update of North American Light Commercial Vehicles Telematics Market, finds that market earned revenue of $585 million in 2011 and estimates this to reach $1.1 billion in 2018. The study has an emphasis on embedded solutions.
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"Geared towards reducing fuel costs and improving efficiency in business, fleet owners are looking at adopting telematics as a tool to monitor vehicle idle time and seamlessly integrate business processes," notes Frost & Sullivan Industry Analyst Nandini Tare. "This not only leads to higher demand, but also maintains pressure on pricing points, due to the current economic condition."
Small fleets are also adopting telematics as a tracking solution; however, these have been slow in adopting FMS solutions. The penetration level is not easily achievable. Around 80 percent of fleets have less than 10 vehicles and this segment has not been significantly penetrated. Small fleets have thin profit margins and are highly prone to cost cut backs.
"In the current economic situation, it is important to strategically position telematics solutions based on the features that address various fleet sizes," explains Tare. "In order to attain a competitive edge, it is key for companies to offer a flexible solution combined with a competitive pricing point."
Fleet managers are looking at fuel-efficient vehicles, monitoring and tracking vehicles and driver behavior behind the steering. FMS vendors are integrating various functionalities like route planning, work order management and workforce management into their solutions to provide efficient business solutions.
There are many opportunities for vendors to penetrate the market. The strategy of offering suitable solutions at a flexible pricing option to various types of fleets addressing their core business issues will have a positive impact on the industry in the coming years.
"The role of telematics tools have evolved from mere tracking of vehicles to tracking mobile resources and improving business and asset management," said Tare. "As the ecosystem matures, blended solutions will encompass basic track and trace, as well as complex, wide-ranging systems that cater to all fleet sizes and business goals."
Strategic Update of North American Light Commercial Vehicles Telematics Market is part of the Automotive & Transportation Growth Partnership Service program. Frost & Sullivan's related research services include: North American Medium and Heavy-duty Commercial Vehicle Telematics Market (Class 4 to 8 Vehicles), European Trailer Telematics Market, and North American Trailer Telematics Market. All research services included in subscriptions provide detailed market opportunities and industry trends evaluated following extensive interviews with market participants.
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Strategic Update of North American Light Commercial Vehicles Telematics Market
SOURCE Frost & Sullivan