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European Medium and Heavy -Duty Commercial Vehicle Telematics Market


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A presentation on the European medium and heavy-duty commercial vehicle telematics market, by industry analyst Kabirdas Sathyanarayana.

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European Medium and Heavy -Duty Commercial Vehicle Telematics Market

  1. 1. European Medium and Heavy-duty Commercial Vehicle Telematics Market Where Lies the Next Biggest Opportunity? Kabirdas Sathyanarayana Industry Analyst Sathyanarayana, Automotive & Transportation Industry 6th September 2011
  2. 2. Today’s Presenter: Sathyanarayana Kabirdas Functional Expertise More than 6 years of automotive industry expertise, which include 4 years of market research and consulting experience. Particular expertise in: - Cross profile experience – expertise in research, quality and manufacturing in automotive domain - Strategic recommendation - growth consulting in advanced automotive technologies market - Analysis – competitive and end-user analysis ; benchmarking - Client interaction - analyst briefings and media interviews Industry Expertise Experience base covering broad range of sectors, leveraging long-standing working relationships with leading industry participants’ Senior Executives - Telematics and infotainment systems - Automotive safety and security systems - Passenger vehicle and commercial vehicle marketsK.Sathyanarayana What I bring to the TeamIndustry Analyst • Combined experience of research, consulting and manufacturing in automotive marketAutomotive & • Unbiased, comprehensive view of products, competition and marketsTransportation • Industry contacts and connections – Quoted in domestic and international publications • Presentation and client management skillsFrost & SullivanNorth America Career HighlightsChennai, India Before Frost & Sullivan, expertise in quality and manufacturing in several leading automotive firms: - Jaguar Cars, Castle Bromwich, England - PSA Peugeot Citreon at Ryton, England - SunFab Industries, Chennai, India Education Master of Science in Automotive Engineering from Coventry University, Warwickshire, UK Certified Training Programme on Six Sigma and Quality Tools Bachelor of Engineering in Mechanical Engineering from Madras University, Chennai, India 2
  3. 3. Definitions Gross Vehicle Weight Vehicle Classification Definition Ratings Light Commercial Vehicles (LCV) LCVs represent vans, and light trucks. The typical applications include pick-up and delivery, utilities, Class 2- 3 airport operations, facilities management and GVWR <= 3.5T several other vocational applicationsMedium Commercial Vehicles (MCV) MCVs represent all types of mid size trucks, vans and buses. The typical application includes home delivery, logistics, parcel delivery, utilities, waste Class 4-6 and recycle collection, airport operations, small GVWR >3.5T & <=16T and medium school and transit buses among others. Heavy Commercial Vehicles (HCV) This constitutes all types of large trucks. The typical application includes line haul freight Class 7 & 8 trucks, refuse trucks, mining and construction GVWR >16T trucks, and other types of vocations that demand high GVWR trucks.
  4. 4. Snapshot of Overall Market: FMS is considered as a Reality Tool for Many Fleets to Remain Profitable and Stay in Business ; Growth Opportunities are Likely to Come From Certain Services Medium and Heavy-duty Commercial Vehicle Telematics Market: Percentage Medium and Heavy-duty Commercial Vehicle Telematics Market Split Among Hardware, Service and Installation (Europe), 2010 : FMS Installed Base Penetration (Europe), 2010 & 2017 5% 7.0 100% MCV & HCV VIO MCV & HCV Parc (Million) Hardware 6.0 FMS Installed-BasePercentage Spilt 75% Mid tier FMS - €1500 ; last upto 5 years 5.0 55% Service 4.0 50% €35/month ; for 5 years (35*60) - €2100 3.0 CAGR 31.9% 25% Installation 2.0 16.9% 40% €100 to €200 ; one time investment 1.0 12.1% 0% 0.0 Installation Service Hardware 2010 2017 Medium and Heavy-duty Commercial Vehicle Telematics Market: FMS Medium and Heavy-duty Commercial Vehicle Telematics Services Penetration Forecasts (Europe), 2010 and 2017 Market: Key Market Participants and Communication Technologies (Europe), 2010 28% 2010 2017 Supplier Vehicle Manufacturer Navigation Navigation Integrating Major Telematics Transics, Qualcomm, MixTelematics, Services like Solution Providers GreentCat, Trimble , Microlise, Vehco & others ADAS, Training Digital 55% is the trend Key OEM Solution Fleetboard, Dynafleet, Scania , MAN, DAF, EOBR Providers IVECO and others Tachograph Communications Satellite > Cellular > Wi-Fi > Multi-modal Technologies 0% 25% 50% 75% 100% Source : Frost & Sullivan
  5. 5. Telematics Product & Service Pricing Range: Shift from Basic Track & Trace to High-end FMSMedium and Heavy-duty Commercial Vehicle Telematics Market: Product and Service Range ; Add-on Option (Europe), 2010 • Advanced Back-end Integration ‘+’ • Integration of Training Module Advanced Services Advanced Services – • ADAS IntegrationHardware Cost Enterprise FMS • Enterprise Fleet management Services1500 – 2500 € • Mobile workforce ( proof of ‘+’ delivery, electronic signature, scanning ) Transport Service Cost • Transport orders follow up Management Plus • Advanced Truck navigation Peripherals Data 30 - 60 € • Peripheral Inputs - liquid High-End FMS Throughput counters, cranes, weighing systems, trailer tracking & others • Eco drive ( drive style analysis) • Remote diagnostics - Maintenance info. ‘+’Hardware Cost1000 – 1500 € Mid-Tier FMS • Security (theft, accidents ) Vehicle • Geo-fencing, corridor fencing and others Management Service Cost • Base Routes 20 - 30 € • Driver service timesHardware Cost Base-Level Entry-Level FMS • Driver activity (manual / menu based 600 – 1000 € Driver Management justification of activity ) Service Cost • Track and trace 15 - 20 € Source: Frost & Sullivan
  6. 6. Key Trends Impacting FMS Adoption:Opportunity for All Value-Chain Participants of the Eco-System Most OEM’s are likely to offer FMS as standard; while, consolidation among Vendors are expanding Opportunity in markets their portfolio by offering like telematics vendors is imminent trailer telematics & Germany, Turkey, Poland transport management and Italy systems Smartphone gaining Driver‘s hour prominence ; additional regulation due in value-added services October 2011; ensures around smart phones only true driving time are likely being recorded Demand for navigation; Integrating FMS with navigation shifting from Advanced driver assistance being an independent systems provides value to system to an integrated Opportunities for value all participants of the eco- system chain participants who system offers real-time information FMS Offered as Standard by OEM’s Economic Slowdown Quick ROI and Operation Optimization Cost of Telematics Service and Information Transparency Lack of awareness / Standardization Drivers Restraints
  7. 7. FMS Penetration by Country: Both Western and Eastern Europe has TremendousGrowth Potential Data Key MixTelematics <10% , Dynafleet, Fleetboard and Microlise 10-20% 2010 2017 Transics and Qualcomm >20% Nordic Transics, Qualcomm, Dyn afleet and GreenCat Western Europe Fleetboard, Qualcomm and Trimble Clearly Dominates Benelux Eastern Europe UK Transics, GreenCat, DAF and Trimble Poland Germany Vehco , Dynafleet and Transics France Transics Italy (Carrierweb), Qualcomm & Fleetboard Qualcomm, Trimble and Iberia Fleetboard Qualcomm (IVECO) and Turkey MixTelematics 7
  8. 8. Key Countries with FMS Opportunity: Germany, Poland, Italy and Turkey OffersGreat Potential; High Volume, Yet Under-Penetrated; Italy is Still Conservative andRequires Educating Customers About the Need of FMS Medium and Heavy-duty Commercial Vehicle Telematics: Key Countries with FMS Opportunity (Europe), 2010 100% Rest Poland North 80% Turkey ~60% of Total VIO Germany East 60% Germany Russia Italy 40% South Nordic Turkey Benelux SY Iberia IQ IR 20% JD France High VIO (together about Middle East 60% of the Total EU VIO) SA UK Easy Movement 0% 2010 Source: Frost & Sullivan 8
  9. 9. FMS Opportunities GloballyMedium & Heavy-duty Commercial Vehicle Telematics Market: FMS Opportunity & Key Vendors by Country(World), 2010 Fleetboard, Transics, Qualcomm, GreenCat, Dynafleet, Microlise, Mi Potential Countries xTelematics, Vehco and others 3 2 1 6 7 Fleetboard has recently set-foot in China with about 200 units Qualcomm, PeopleNet 4 (Trimble), XATA, Teletr ac, Webtech Wireless and others. 5 MixTelematics, Digicore, Ne Autotrac, Zatix, Onixsat, Wir tstar, Tracker and others elessCar, and others Beyond 20141 North America 2 Europe 3 Russia 4 Brazil 5 South Africa 6 Middle East 7 Asia Source: Frost & Sullivan 9
  10. 10. FMS Line-Fit to be Standard: Markets, Platform Change, Miles Driven & Truck Pricing are Considered to be Key Factors; Initial Free Subscription Allows Fleet Owners to Realize the Benefits of FMS, Increasing the Active Subscribers Medium & Heavy-duty Commercial Vehicle Telematics Market: Key Factors, Challenges & Steps to Line-fit FMS (Europe), 2010 Markets / Countries M e Platform Change “ Hardware penetration FMS doesn’t necessarily equate e Line-Fit to service penetration ” Long-Haulage s High-priced models Lucrative Finance •Increase in Some operators do not want to be linked to the•First 4 up to 48 Months •Lucrative Free Period OEMs or to a particular OEM Free Financial Options and/or Base – money back Services Some OEMs do not have the capability of Free guarantee Add-on’s expanding outside their own vehicle line Service Operators with mixed fleets do not prefer OEM’s base-telematics systemsNote: For base service, ~48 months (Eg:Scania) and for advanced service ~4 months (Eg:Fleetboard) free service Source : Frost & Sullivan 10
  11. 11. Increase in Demand of Navigation System : Shift from Being a Stand-Alone System to an Integrated System; Adds More Value ; Opportunities for Value ChainParticipants Who Offers Real-time Information Stand-Alone System Eastern EU is experiencing driver shortage (Polish drivers are replaced by Bulgarian drivers) – Demand for Navigation Parking Slots Integrated System – Adds More Value Charging Tolls Points Driving Behaviour EngineCharacteristics Characteristics Opportunities Value Chain Secured Eco- Driver Routes Routes Work Time Cost/Environment Characteristics Vehicle Characteristics 11
  12. 12. Key Findings Services to Target Revenues to Target “ Focus on Recurring Revenue and new “Shift to high-end FMS ; value added services service offerings – promotion of hardware & that are demonstrating higher ROI – offer software maintenance contract; consulting services Advanced Back-end approach and others ” Integration, Integration of Training Module, ADAS Integration and others ” “ Under penetrated small fleets provide “ Matured market to undergo replacement significant growth opportunities – offer cycle & Eastern Europe to see growth – right product and service mix ” target new regions like South America, Middle-East, China; start educating these market ” Fleet Size to Target Countries to Target Source: Frost & Sullivan 12
  13. 13. Key Telematics Vendors 13
  14. 14. Rapid Migration Towards MCP and OmniExpress
  15. 15. Qualcomm Targets Eastern European Countries Such as Turkey andRussia; Especially with its Recent Agreement with Waberer in Hungary(with more than 2000 trucks), Have Good Opportunity in Eastern Europe
  16. 16. Plans to Offer Solution to More OEM’s Much Like its Partnership withIVECO (Blue & Me fleet); DAF Might Follow ; Though Qualcomm SlowlySeems to be Struggling with IVECO
  17. 17. Research Service Also Includes Detailed Profiling of the Below Key OEMs Offering Telematics Services 17
  18. 18. Scania: Scania Driver Support is Now Almost Standard on New Scania Long-Haulage Vehicles ; Likely to be Aggressive in Terms of Offering FMS as StandardFeature in All Scania Trucks and Models; Based on Markets or Countries Sold
  19. 19. Depth of Analysis Covered in Our Research for Commercial Vehicles –Covers both North America and European Market Identifies models, which are likely to have FMS as Line-fit (standard) by OEM ; also denotes the percentage of line- 1 fit FMS by each OEM (vehicles sold per year) in 2017 Graphs the percentage of FMS penetration in the total European commercial vehicles in operation by Fleet 2 Size; also base year market shares (Installed-base) by Industries served and by telematics market participants Showcases the current (2010) and future (2017) FMS penetration by individual countries across Europe - 3 addressable market ; also presents the country-wise revenue forecast potential by 2017 – growth analysis Identifies key countries with FMS opportunities and key suppliers in each country, globally; lists the 4 upcoming legislations across the globe; the North America report graphs the split by local, regional and long-haul ; also by private and for-hire fleets Showcases the real-time return of Investment (ROI) example with saving potential in Euros; and also 5 graphs the various ways of attaining revenue opportunity; in addition it also presents the ‘Next Big Factor for Product Differentiation For Truck makers’ in the new decade ? Comprehensive profiling of key telematics vendors – packages (pricing), suppliers (hardware, navigation, & 6 others) installed base, (split by country, industry served, packages offered, services offered, private/for- hire, direct/resellers, hardware/service revenues and others) and its key strengths and objectives Comprehensive profiling of key OEMs offering telematics – packages, installed-base, suppliers, models offered 7 (plants location, production volumes, models likely to offer FMS as line-fit and others) and percentage of FMS penetration in its production volumes by 2017 19
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  23. 23. For Additional InformationKatja Feick Cyril CromierCorporate Communications Sales DirectorAutomotive & Transportation Automotive & Transportation Europe+49 (0) 69 7703343 +31 (1) 42 81 22 cyril.cromier@frost.comPraveen Chandrasekar Franck LevequeProgram Manager Vice President – Growth ConsultingAutomotive & Transportation Automotive & Transportation Europe+91-44-66814129 +49 (0)69 770 33