Moreover, Berg Insight forecasts that shipments of embedded car OEM telematics systems worldwide will grow from 39.6 million units in 2019 to reach 71.2 million units in 2025, which represents an attach rate of 85.8 percent.
New passenger car and light truck registrations declined 4.9 percent to 78.1 million worldwide in 2019. The Covid-19 crisis has had a significant impact on new car sales this year which have dropped significantly. Berg Insight still anticipates high growth of OEM telematics subscribers in the next years as connected car services become ubiquitous in all major car markets.
Connected car services have evolved from being a differentiating factor to a common feature with a high attach rate among the premium car brands and are rapidly becoming increasingly common in mid-range vehicles.
GM’s OnStar was launched more than 20 years ago and is today the market leader worldwide with approximately 22.0 million users in total, out of which more than 16.0 million were in North America by year-end 2019. BMW had the second largest user base of an estimated 12.5 million connected vehicles. Mercedes-Benz currently ranks third as Mercedes Me Connect is now available in more than 45 countries and recently launched in the US, Canada, Australia, Thailand and New Zealand. PSA Group is also a leading carmaker with 5.2 million connected vehicles in Europe via Peugeot, Citroën and DS. The carmaker launched an emergency and assistance call service already in 2003. Additional automotive OEMs with over 4 million telematics subscribers also include Volkswagen, Toyota/Lexus and Hyundai.
“Carmakers are still experimenting with business models for connected car services as renewal rates for telematics subscriptions after the initial free period still remain relatively low”, said Martin Svegander, Senior Analyst at Berg Insight. Competition and local regulations will likely lead to that a growing number of brands will offer free basic services such as safety and diagnostics for the lifetime of the vehicle.
“Carmakers are expected to offer connected car services through a modular sales approach where customers can order services individually and thus generate revenues on value-added services built on top of basic telematics services”, said Mr. Svegander.
During the past years, automotive OEMs have also explored new distribution models based on company-owned sales and service centres in order to ensure the best customer experience and benefit from shorter customer feedback loops. Tesla pioneered this model and many automakers are now following suit.
Mr Svegander concluded:
“Connected car products and telematics will become the central platform for building and improving customer relationships by enabling personalised services and products in a digital customer journey.”
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Credit: IoT Business News