The global telematics market is expected to grow an estimated one-third every year between 2016 and 2022, according to a new study by consulting firm P&S Market Research.
The study, "Global Telematics Market Size, Share, Development, Growth and Demand Forecast to 2022", projects the telematics market will grow from a reported $26 billion in 2015 to $140 billion in six years at a compounded annual growth rate of nearly 29%.
A key trend in P&S’ study is the increasing use of telematics in the auto insurance industry, expected to grow at a CAGR of 24% through 2022. The noticeable spike is credited to higher demand for connectivity in vehicles by insurers and their clients, the company said. Government initiatives to ensure public safety on roads and growing interest from developing nations will contribute to overall telematics growth across all consumer and commercial sectors detailed in the report.
“The Insurance industry is ahead of the overall telematics market in terms of historic and expected CAGR through 2022,” the researcher says. “This is due to the growing vehicle insurance industry and the increasing adoption of technology for calculation of premiums.”
High cost of telematics equipment and threats of cyber attacks, however, are key obstacles in the global market, P&S notes. Still, North America is presumed to dominate the market through the forecasting period while Asia grows at the fastest pace. Though lagging behind, developing countries are witnessing continued use of telematics as a result of increased education and urbanization.
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