Telematics – A revolution for the Indian auto industry
As we all know, telematics, as the term suggests, is a type of communication technology specifically for the automobile industry that is based on information or data relayed to and generated from vehicles via wireless networks. Simply put, it is the convergence of wireless communications, location technology, computer and in-vehicle electronics.
With the advent of mobile technology, smart phones, the internet and GPS receivers, the vehicle telematics business is currently witnessing a watershed moment of sorts. In-car electronics is no longer just a fad, it is very much real and is evolving fast.
Benefits of Telematics:
Telematics enables original equipment manufacturers to aggregate diverse amount of data from geographical location and usage patterns to maintenance needs and information on performance. Via telematics gateways, OEMs can keep an eye on their customers during even the post sales period. Telematics also enables stakeholders such as manufacturers, partners and content creators to deliver maps, weather forecasts, information on traffic conditions, news, stock updates, social messages and entertainment to the vehicle.
Some of the other inherent benefits of telematics include:
• Connectivity, safety and vehicle reliability to vehicle owners
• Protection - automatic crash response, emergency and crisis assistance
• Security - remote door lock/unlock, stolen vehicle tracking
• Navigation - providing maps, turn-by-turn assistance
• Vehicle health reports - diagnostics on the vehicle performance
• Internet connectivity - providing social networking apps, RSS feeds like weather forecasts, stock updates, news bulletins etc. right into the vehicle
It is important to note that telematics is not new to the automobile industry. It owes its genesis to General Motors which commercialized the feature as early as 1996. Infrastructure investment and lack of consumer demand sidelined telematics from the broader picture until recently, thanks to the advent of smartphones and the need for instant and constant connectivity requirements.
Passenger vehicle segment and fleet management markets are the key drivers for the telematics segment as the technology enables, safety, security, navigation and remote diagnostics on vehicle performance amongst a host of others.
Telematics in India:
One of the fastest growing segments in India, the telematics industry is further catapulted by spiraling fuel prices, growing instances of accidents and car thefts, navigation and cases of fuel wastage. Telematics enables vehicle tracking, route calculation, fuel pilferage checks etc and this combined with Government’s increasing involvement in passenger safety and security, will add the much needed boost to the industry. A case in point - Government initiatives such as the 12,000 crore ($2.4 billion) investment in upgrade of police forces, including the consolidation of security grids in all key cities.
Though it is true that today in India, telematics is merely providing real-time location of vehicles and fleet management solutions, the scope is huge. The system uses the on-board GPS to triangulate the current location and then relays that over 2G GSM to a central computer. The vehicle owners and/or authorities are then relayed the location in real-time.
However, things are changing and changing fast. The Indian telematics market is on a high growth path, thanks to the progresses in mobile communication industry which had made it possible to detect and determine any variable in real-time.
Technavio, the market research and analysis firm opines that, the commercial vehicle telematics market in India will grow at a steady pace over the next four years to post a CAGR of around 16% by 2020. Fuelling this growth is the increased demand for vehicle tracking and monitoring systems from the logistics segment. However, it is important note that, only one-third of a vehicle's lifetime is used for delivery.
Rest of the cost is of fuel, empty runs etc. Telematics offers fleet management solutions which will play a significant role in reducing fuel costs by cutting down empty runs, thereby reducing overall vehicle downtime.
As per iSuppli, the BRIC region has the fastest growing auto industry when compared to the western countries and the percentages of automobiles implanted with telematics technology are estimated to reach 46% globally, by the end of 2018. Though at a nascent stage now, the industry is perfectly poised to rise up the growth pyramid.
The growth of telematics that has been witnessed in developing and developed countries was primarily in four types of service domains, namely safety, information, navigation and remote diagnostics.
Globally, the automobile industry is integrating and deploying telematics tech to monitor vehicle performance and identify defects in vehicles, simultaneously also catering to the demands from users for wireless connectivity. Telematics also have other uses. Like for example, in the UK, Telematics is primarily used for usage-based insurance (UBI). The Telematics device continually collects the way a driver drives the car. This information is relayed, along with the location and other information, to the insurance company.
Post that, data analytics systems are deployed to analyse the driving styles compared with historical data that is already available. Based upon this analysis, the insurance premium is adjusted. In the US, Telematics devices are used to provide concierge services to drivers based upon their location. In case of an accident, medical help can therefore be arranged fast and in real time.
While telematics penetration in the US and Western Europe will cross the 80% mark by this year, developing areas such as Latin America and
Eastern Europe will also witness a sharp increase in telematics penetration in new vehicles.
Machine to Machine and connected cars:
Internet of Things enabled connected cars are the talk of the town nowadays, the world over. Such cars provides myriad smart benefits, apart from enhanced safety and security, rich user experience and an entire suit of M2M product offerings.M2M devices today are smaller, cheaper, energy efficient, sensitive and accurate. M2M and vehicle telematics in India, though at a relatively nascent stage, if compared to global counterparts, is all poised to reach a whopping $150 million over the next few years.
What the future has in hold:
Logistics and transportation companies in India are slowly coming to terms with the fact that telematics is not just about vehicle tracking and monitoring and offers a host of other , including but not limited to – achieving transparency in business processes and efficiency. Let’s take a look at an innovative example of telematics usage.
In Kerala, the She-Taxi service launched in collaboration with Maruti Suzuki Ltd and Kerala State Women’s Development Corporation is an initiative to assist woman to reach their destination safely. The taxis has been designed and integrated with internet and mobile based convergent technologies, which detect, monitor and track the movements of the passenger as well as the driver driving the vehicle.
Trak N Tell, the customized telematics solutions provider, is also currently conducting field trails for its range of telematics products that offers myriad functionalities. The products have been customized for Indian road conditions as well as driving patterns that are unique to India. Passenger vehicular tracking and fleet management currently constitutes a major chunk in the overall Indian telematics market but use cases are slowly getting broader with each passing day.
A catch up with global markets won’t take much of a time. Connected enterprise and Industry awareness about vehicle-to-vehicle and vehicle-to-infrastructure connectivity is clearly gaining momentum.
Road safety and proper traffic management is a global concern and telematics offers efficient solutions in this sphere as well – such as through driver risk assessment technology and driver ratings.
Analysis of real-life driving behavior, driving patterns, live alerts and warnings that can be produced in case of any violation of safe driving practices, such as over speeding, hurried braking, seat-belt use, indicator use, checking blind spots, engine revving, wrong gear selection and rash acceleration. Overseeing driver tiredness can also be beneficial to optimally delegate jobs and prevent road accidents.
Next-generation telematics protocol (NGTP) is another technology in the telematics space that is slowly becoming a trend outside of India. NGTP help service providers offer flexible, scalable, robust, and cost-effective telematics solutions. According to industry analysts, the adoption of NGTP will be one of the key trends in the telematics space over the coming years.