Satendra Kumar, Industry Analyst, Mobility Practice (Automotive and Transportation), Frost & Sullivan elaborates on the current and future trends in Commercial Vehicle Telematics industry in India.
The fragmented and hitherto sluggish commercial vehicle (CV) telematics market in India is set to take off. Infrastructure and adoption rates will improve as state and municipal transport corporations initiate safety services such as real-time, location-based services and intelligent transport systems in public vehicles. With annual telematics sales expected to grow six-fold by 2023, vehicle original equipment manufacturers (OEMs) and telematics suppliers must arrive at an optimum business model to attract the right set of customers. “With vast untapped potential for telematics usage in various industries, India will become a hotspot for new entrants to introduce future-generation products and services, and attract a large customer base,” says Kumar.
A recent analysis by Frost & Sullivan offers insights on heavy-duty truck platforms, autonomous trucks foundation technologies, commercial trucking, used transit bus market, light commercial vehicle telematics and off-highway vehicles. While the delay in the implementation of government schemes forced many companies to exit and temporarily dampened the adoption of telematics, the market is now powering forward, encouraged by the potential benefits of safety, efficiency and diagnostics. As supportive legislations grow, the market will shift toward advanced, fit-to-purpose solutions, such as collision avoidance and on-board driver training. Reducing vehicle downtime through vehicle health management and preventive maintenance will be another focus area for OEMs and large fleets.
Kumar shares his thoughts with APF.
What is the current status of the CV telematics market in India?
The CV telematics market is in a very nascent stage in India. It was introduced in 2003 and until now the market has grown at a very slow pace owing to factors like low adoption rate, inadequate infrastructure, etc. Currently, the market is fragmented with multiple players (more than 20) providing customised solutions to fleet owners and the top three players comprise around 51 per cent of the market. The product range varies from entry level fleet management systems to advanced services varying as per industry applications. The telematics market in India will consolidate going forward as small companies with a healthy customer base are acquired by multinational companies such as Trimble Navigation and Efkon that are looking to enter the arena. OEMs will also step up partnerships with aftermarket vendors to support services for mixed fleets.
What are the reasons that will trigger growth of this market?
The market is expected to witness explosive growth as there is a huge untapped potential coupled with growing needs and expectations of customers as well as increasing government spending on M2M infrastructure across India for safety and intelligent transport systems. With vast untapped potential for telematics usage in various industries in India, it will be a hotspot for new entrants with future generation solutions to introduce their products/services and attract a huge customer base in India.
How will government policies help take this forward?
In the wake of the infamous and shocking ‘Nirbhaya’ incident in 2014 in New Delhi, the Union Cabinet Committee earmarked a Nirbhaya fund of Rs 11.9 billion to equip public transportation vehicles with tracking and geo-fencing, mandatory GPS-linked panic buttons, and CCTV cameras across various Indian cities over a period of four years. Such initiatives will act as a major growth driver for the Indian telematics market in the coming years. The market growth is also expected to be driven by other government initiatives such as the recently announced Rs 12,000 crore ($2.4 billion) investment to upgrade police forces, including consolidation of security grids in all key cities. Besides, state and municipal transport corporations are also initiating steps to ensure that public vehicles should be installed with safety services like real-time location-based services and intelligent transport systems. This measure will increase the demand of telematics-based usage across India.
What are the new features offered in telematics products?
Commercial vehicle telematics has helped the logistics and supply chain industry with some new features such as vehicle health monitoring, fuel monitoring, in-cab coaching, driving behaviour analytics, restructuring accidents, harsh braking, over-speeding, etc.
How do Indian products compare with those used in western countries?
Since the Indian industry is in a nascent stage, it won’t be fair to compare it with the western market. The established infrastructure in western countries is a major differentiator as it allows TSPs (Telematics Service Providers) to innovate new products whereas Indian counterparts are grappling with basic factors like low customer awareness levels and lack of or less interest from the government.
What will be the positive fall-out of the higher use of telematics in India?
More advanced solutions like remote vehicle diagnostics, collision avoidance, on-board driver training might become common in the future with better machine-to-machine connectivity. Aggregators like TruckMandi, Uber for Trucks and Truck OLA will improve process and relationship between shipper, carrier and broker through automation - providing shippers access to a wide range of carriers. This will eventually lead to higher penetration of fleet management. At the same time, cost competitiveness
is expected to lead to adoption of strategic pricing.
What are the challenges that Indian manufacturers need to overcome?
The adoption spree of telematics slowed down as industry stakeholders were falling short of the expectations set for the Indian market, and many companies exited the business. Vehicle manufacturers have slowed down product launches with enabled services as the government is yet to announce any plans of infrastructure development.