The uptake of telematics in the industry is believed to be driven by requirements for fleets to increase fleet utilization, the emergence of new mobility services and the general electrification trend in the automotive industry.
The COVID-19 pandemic has moreover pushed the demand for digital business models, increasing the uptake of telematics in both the rental and leasing industries.
The total active installed base is forecasted to reach 12.6 million by 2026 across the car rental and leasing fleets in the two regions.
The telematics penetration rate across the car rental fleets in Europe and North America is expected to grow from 38 percent in 2021 to 86 percent in 2026. The telematics penetration rate in the total population of leasing vehicles in the two regions reached 35 percent in 2021 and is expected to reach 61 percent by 2026.
Several categories of telematics applications are today used in the context of car rental and leasing. “The main benefit of deploying telematics among car rental and leasing companies is improved control over assets”, said Martin Cederqvist, IoT Analyst at Berg Insight.
Fleet managers have an obvious interest in tracking the location of their vehicles and monitoring their status in order to prevent fraud, theft and mistreatment. In the long run, this leads to reduced operational costs and also potentially lower insurance premiums.
Mr Cederqvist continued:
“Telematics technology may also enable new business models or services such as long-term pay-per-use contracts for private vehicles or automated mileage reporting for company cars as well as digital and contactless car rental and carsharing experiences.”
The car rental companies have also had challenges to meet an increasing demand for rental cars in the last year due to semiconductor shortages and production disruptions in the automotive industry, which in turn has had a positive effect on telematics adoption as astute use of telematics systems has proven to contribute to optimal fleet utilization.
The telematics value chain spans multiple industries including a large ecosystem of companies, including hardware specialists, software specialists and end-to-end solution providers. Telematics players active on the car rental and leasing market include telematics specialists which are only or mainly active in the rental and leasing space, offering solutions for digital access or vehicle fleet management.
Examples of companies present on the rental and leasing market include the fleet management solution vendors Webfleet, PowerFleet and Geotab.
“Geotab has established itself as a leading telematics service provider in the rental and leasing industry and has an installed base of more than 600,000 telematics subscribers in this segment in the two regions”, said Mr Cederqvist.
Additional notable telematics service providers in the rental and leasing telematics market include Targa Telematics, CalAmp, Octo Telematics, Airmax, IMS and Zubie as well as specialized companies such as RentalMatics, HQ Rental Software, Kirrk and TSD Mobility Solutions. Telematics data integration between automotive OEMs and rental and leasing companies have become increasingly common and it is anticipated that the involvement of automotive OEMs will accelerate in the rental and leasing telematics industry in the coming years.
“Examples of automotive OEMs that have direct telematics integration with rental and leasing companies include for example GM, Ford, Stellantis (Free2Move), Tesla and Toyota”, added Mr Cederqvist.
The post The rental and leasing car telematics market is expected to grow at a CAGR of 17.6 percent in the next 5 years appeared first on IoT Business News.