The technological environment for aftermarket car telematics solutions has evolved significantly since the concept first emerged in the 1980s. Since then, we got to a point where technology surrounds and serves us in every walks of life, and even though consumers may feel they’ve seen everything tech-wise and there is nowhere else to develop, tech organizations are challenging their convictions a great deal.
We already know much about the past and present of the car telematics industry and its aftermarket, but what does the future hold for it?
This is the topic we will explore in-depth in this article.
What factors are driving and shaping the aftermarket car telematics market?
There is a range of drivers and barriers that influence the developments on the market for aftermarket car telematics. Ranging from the general economic climate, vehicle crime levels, fuel prices, or the consumers’ willingness to adopt new solutions, the future of aftermarket car telematics is continuously formed by outside factors. Moreover, the uptake of car telematics solutions can be dependent on regional, national, and international regulations (like GDPR). These push-, and pull factors created the aftermarket possibilities we see and experience today, and they also play a significant role in determining the future of car telematics.
What does the future hold for aftermarket car telematics?
Let’s take a plunge into the topic of how the future of the aftermarket of car telematics will look like according to industry specialists.
- Continued spreading and broadening of the car telematics solutions
There is going to be an increasing demand for telematics solutions from the part of automobile manufacturers, insurance companies, fleet managers, and car-sharing companies alike. They are realizing the business potential in these solutions and are finding creative ways to incorporate them into their existing business model to enlarge their audience and to increase their service quality.
This growing demand and technological advancement are expected to contribute to new telematics features, which will far exceed the relatively simple SVT/SVR solutions or OBD. As industries are realizing the business potential in smart telematics solutions, they are going to broaden their offerings to new target audiences, like adolescent or senior drivers, which will not only increase security on the roads but will positively affect the bottom line of those companies who take advantage of the upcoming telematics solutions by appealing to a new, so far untouched social segment.
Furthermore, specific applications such as UBI (usage-based insurance) and fleet management are expected to use data from a wide range of sources including aftermarket telematics products to facilitate decision-making in business and to evaluate driving behaviour, thus opening the door for these solutions to a growing market.
- Softening concerns about privacy violation
When car telematics solutions emerged, they were criticized for invading the privacy of individuals. However, with the expansion of location-based services and applications, and by realizing the convenience they bring to consumers’ lives, privacy became a lesser emphasized issue according to industry representatives. Initial privacy concerns were less severe among younger generations and tech-savvy user groups, but this approach continues to weave itself into the everyday life of the general public. Therefore, the softening of privacy violation concerns means easier consumer acceptance and gives green light to market such new features.
- Usage-based insurance services will remain significant in most countries
In contrast with the rigid, traditional method of identifying risk for vehicle insurance, which is based on gender, age, marital status, address, and vehicle type, revolutionary, telematics-based insurance services offer premiums according to real driving behaviour.
In addition to providing data-based premiums, a significant number of insurers, especially in Europe, are using telematics to track stolen vehicles or to prevent fraud. What is more, these telematics-based insurances can speed up and enhance claim management and customer experience, which are truly a must in today’s world. As these solutions are getting traction worldwide, the insurance aftermarket of car telematics is expected to grow in the future.
- Data-based marketing and improved customer care
Telematics has become an important part of the aftersales programs of dealers and vehicle finance companies. By integrating CRM solutions, and using data collected from the cars in an intelligent manner, organizations are able to establish agile marketing strategies that follow the demands of the market. Secondly, they are able to improve their customer care by providing relevant offers, timely services, or upsell packages.
- Wi-Fi hotspots for the convenience of passengers
Car telematics solutions not only ease the job of organizations in the industry, or increase the safety of the drivers, but they also enable businesses to make traveling more convenient for passengers as well. There are many different solutions to pull this advancement off, like 1) OEMs (original equipment manufacturer) offering Wi-Fi hotspots that leverage the cellular connectivity of embedded telematics systems with subscription plans, or 2) new localized SIM solutions by mobile operators enabling car manufacturers to offer connectivity subscriptions to customers, or 3) offering Wi-Fi hotspots as an aftermarket accessory. We now see it quite likely that these embedded and aftermarket solutions will co-exist in the near future.
- Car telematics service providers are to be working with a wide variety of partners
In several markets, an ecosystem is key to ensure the commercial success of connected car offerings. We are expecting such ecosystems to form with the booming of car telematics solutions, automotive IoT, self-driving cars, or car-sharing services. One ecosystem could be, for instance, offering tangible value in the form of cost savings on roadside assistance or insurance as well as benefits in the form of perks for safe driving. With the expansive growth of connected cars’ user base, service providers will have the chance to further analyze, and contrast the vast database of driving data, which is going to be among their most valuable assets.
Taking the above-mentioned trends into consideration, it now seems evident that the aftermarket of car telematics will grow expansively in the future, which gives additional business opportunities and assets to fleet operators or other enterprises in the automotive industry. Furthermore, these services are going to be used to enhance the convenience and safety of passengers, while providing them exceptional customer care based on real, personalized driving data. Even though many people feared these solutions initially, the skepticism and privacy violation concerns are seemingly softening as people are getting used to other, data-based services, which demonstrates the likelihood of smooth consumer adoption.