Demand from fleet operators trying to monitor fuel and emissions is pushing up revenue
Los Angeles, CA (PRWEB) April 20, 2012
The Fleet Telematics Systems industry has not fared well in the five years to 2012. Low demand from truck transportation significantly reduced demand for the industry during the recession. IBISWorld expects revenue for the Fleet Telematics System industry to decrease at an average annual rate of 0.4% to $2.0 billion in the five years to 2012. However, the increasing number of mobile internet connections and the rising world price of crude oil buoyed the industry some, minimizing the decline in demand. In 2012, revenue is expected to increase due to rising demand; however, revenue and profit will remain below prerecession levels due to advances in technology that increase competition. The industry performed poorly in 2009 when revenue declined 9.7%. IBISWorld industry Lauren Setar says, “Weak operating conditions caused many firms to record losses, forcing some operators out of the industry. Since then, revenue has increased along with fuel prices and the number of mobile internet connections, but demand remains relatively weak.”
Overall, the Fleet Telematics Systems industry has a low level of concentration. The top firms are Qualcomm and Trimble Navigation Limited. Despite the presence of nationwide major players, most of the industry comprises small-scale firms that only serve a small market, based on the functionality of the telematics systems they provide. These smaller companies typically have only a few contracts and operate web-based applications rather than through hardware installed at the client's base of operations. The larger-scale firms use their larger resources to offer premium products that allow for more functionality. The market share concentration in this industry is expected to stay mostly level over the coming five years.
Fleet telematics systems have become more important as companies look for cost savings. When the price of crude oil increases, industry customers try to cut back on fuel costs by purchasing fleet telematics system software to analyze fuel usage. Along with reducing fuel costs, companies have worked to reduce their carbon footprint and lower emissions. This trend has increased demand for fleet telematics systems, allowing fleet owners to measure emissions. Nevertheless, technological change has hampered growth. “Other companies have created competing products and services to provide the same functionality as fleet telematics systems. Specifically, the industry has faced increasing competition from cars with built-in fleet telematics systems and mobile-phone-based systems,” says Setar. Conditions are projected to improve slightly through 2017. As the economy recovers, the industry is expected to grow along with increases in demand from truck transportation. Additionally, increases in the world price of crude oil will cause growth in the five years to 2017 because transportation companies will demand fleet telematics systems for fuel analysis. Continued growth in wireless connectivity will also spur demand increases because fleet operators will purchase telematics systems for their drivers with mobile connections. In the five years to 2017, IBISWorld projects that industry revenue will increase. For more information, visit IBISWorld’s Fleet Telematics Systems report in the US industry page.
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IBISWorld industry Report Key Topics
This industry manufactures the hardware and software used for fleet telematics systems. Fleet telematics systems use electronics and GPSs to track the location and other characteristics (e.g. mileage or speed) of vehicles in a fleet. This industry includes fleet telematics systems for mobile devices.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
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