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European Medium and Heavy-duty Commercial Vehicle Telematics Market
Where Lies the Next Biggest Opportunity?
KabirdasKabirdas SathyanarayanaSathyanarayana, Industry Analyst KabirdasKabirdas SathyanarayanaSathyanarayana, Industry Analyst Automotive & Transportation Industry
6th September 2011
Today’s Presenter: Sathyanarayana Kabirdas
K.Sathyanarayana
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 markets
2
K.SathyanarayanaIndustry AnalystAutomotive & Transportation
Frost & SullivanNorth AmericaChennai, India
- Passenger vehicle and commercial vehicle markets
What I bring to the Team
• Combined experience of research, consulting and manufacturing in automotive market
• Unbiased, comprehensive view of products, competition and markets
• Industry contacts and connections – Quoted in domestic and international publications
• Presentation and client management skills
Career Highlights
� 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
Definitions
Vehicle Classification DefinitionGross Vehicle Weight
Ratings
Light Commercial Vehicles (LCV) LCVs represent vans, and light trucks. The typical
applications include pick-up and delivery, utilities,
airport operations, facilities management and
several other vocational applications
Class 2- 3
GVWR <= 3.5T
Medium 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
and recycle collection, airport operations, small
and medium school and transit buses among
others.
Class 4-6
GVWR >3.5T & <=16T
Heavy Commercial Vehicles (HCV) This constitutes all types of large trucks. The
typical application includes line haul freight
trucks, refuse trucks, mining and construction
trucks, and other types of vocations that demand
high GVWR trucks.
Class 7 & 8
GVWR >16T
Snapshot of Overall Market: FMS is considered as a Reality Tool for ManyFleets to Remain Profitable and Stay in Business ; Growth Opportunities areLikely to Come From Certain Services
0%
25%
50%
75%
100%
40%
55%
5%Hardware
Mid tier FMS - €1500 ; last upto 5 years
Service
€35/month ; for 5 years (35*60) - €2100
Installation
€100 to €200 ; one time investment
Perc
en
tag
e S
pilt
Medium and Heavy-duty Commercial Vehicle Telematics Market: Percentage Split Among Hardware, Service and Installation (Europe), 2010
Medium and Heavy-duty Commercial Vehicle Telematics Market: FMS Installed Base Penetration (Europe), 2010 & 2017
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
12.1%
MCV & HCV VIO
FMS Installed-Base
MC
V &
HC
V P
arc
(Mill
ion)
31.9%CAGR 16.9%
28%
55%
0% 25% 50% 75% 100%
Navigation
EOBR
2010 2017 Supplier Vehicle Manufacturer
Major Telematics
Solution Providers
Transics, Qualcomm, MixTelematics,
GreentCat, Trimble , Microlise, Vehco & others
Key OEM Solution Providers
Fleetboard, Dynafleet, Scania , MAN, DAF,
IVECO and others
Communications
TechnologiesSatellite > Cellular > Wi-Fi > Multi-modal
Source : Frost & Sullivan
Installation Service Hardware
Medium and Heavy-duty Commercial Vehicle Telematics Market: Key Market Participants and Communication
Technologies (Europe), 2010
Navigation
Digital Tachograph
Medium and Heavy-duty Commercial Vehicle Telematics Market: FMS Services Penetration Forecasts (Europe), 2010 and 2017
Integrating
Services like
ADAS, Training
is the trend
0.0
2010 2017
Telematics Product & Service Pricing Range: Shift from Basic Track & Traceto High-end FMS
• Advanced Back-end Integration
• Integration of Training Module
• ADAS Integration
• Enterprise Fleet management
‘+’
Transport
Management Plus
Peripherals Data
‘+’
Transport
Management Plus
Peripherals Data
• Mobile workforce ( proof of
delivery, electronic signature, scanning )
• Transport orders follow up
• Advanced Truck navigation
Peripheral Inputs - liquid High-End FMSHigh-End FMS
Advanced Services –
Enterprise FMS
Services
Advanced Services –
Enterprise FMS
Services
Medium and Heavy-duty Commercial Vehicle Telematics Market: Product and Service Range ; Add-on Option (Europe), 2010
‘+’
Advanced Services
‘+’
Advanced Services
Hardware Cost
1500 – 2500 €
Hardware Cost
1500 – 2500 €
Service Cost
30 - 60 €
Service Cost
30 - 60 €
Hardware Cost
600 – 1000 €
Hardware Cost
600 – 1000 €
Service Cost
15 - 20 €
Service Cost
15 - 20 €
Hardware Cost
1000 – 1500 €
Hardware Cost
1000 – 1500 €
Service Cost
20 - 30 €
Service Cost
20 - 30 €
Source: Frost & Sullivan
• Driver service times
• Driver activity (manual / menu based
justification of activity )
• Track and trace
• Remote diagnostics - Maintenance info.
• Security (theft, accidents )
• Geo-fencing, corridor fencing and others
• Base Routes
Base-Level
Driver Management
Base-Level
Driver Management
‘+’
Vehicle
Management
‘+’
Vehicle
Management
ThroughputThroughput• Peripheral Inputs - liquid
counters, cranes, weighing systems, trailer
tracking & others
• Eco drive ( drive style analysis)
Entry-Level FMSEntry-Level FMS
Mid-Tier FMSMid-Tier FMS
High-End FMSHigh-End FMS30 - 60 €30 - 60 €
Most OEM’s are likely to offer FMS as standard;
while, consolidation among telematics vendors is
imminent
Vendors are expanding their portfolio by offering
trailer telematics & transport management
systems
Driver‘s hour regulation due in
October 2011; ensures only true driving time
being recorded
Smartphone gaining prominence ; additional value-added services around smart phones
are likely
Opportunity in markets like
Germany, Turkey, Poland and Italy
Key Trends Impacting FMS Adoption:Opportunity for All Value-Chain Participants of the Eco-System
Quick ROI and Operation Optimization
Service and Information Transparency
Economic Slowdown
Cost of Telematics
Lack of awareness / StandardizationDrivers Restraints
FMS Offered as Standard by OEM’s
Integrating FMS with Advanced driver assistance systems provides value to all participants of the eco-
system
Opportunities for value chain participants who
offers real-time information
Demand for navigation; navigation shifting from being an independent
system to an integrated system
FMS Penetration by Country: Both Western and Eastern Europe has TremendousGrowth Potential
<10%
10-20%
>20%
Western Europe Clearly Dominates
Eastern Europe
2010 2017
Data Key MixTelematics , Dynafleet, Fleetboard
and Microlise
Transics and Qualcomm
Transics, Qualcomm, Dynafleet and GreenCat
Fleetboard, Qualcomm and Trimble
Benelux
Nordic
7
Eastern Europe
Transics, GreenCat, DAF and Trimble
Vehco , Dynafleet and Transics
Transics (Carrierweb), Qualcomm &
Fleetboard
Qualcomm, Trimble and Fleetboard
Qualcomm (IVECO) and MixTelematics
France
Iberia
Italy
Germany
UK
Poland
Turkey
Benelux
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
Germany 60%
80%
100%
Germany
Poland
Turkey
Rest
~60% of Total VIO
Medium and Heavy-duty Commercial Vehicle Telematics: Key Countries with FMS Opportunity (Europe), 2010
North
EastRussia
8
Turkey
SYIR
SA
IQ
JD
High VIO (together about
60% of the Total EU VIO)
Easy Movement 0%
20%
40%
UK
France
Iberia
BeneluxNordic
Italy
2010
Source: Frost & Sullivan
Middle East
South
Russia
FMS Opportunities Globally
Medium & Heavy-duty Commercial Vehicle Telematics Market: FMS Opportunity & Key Vendors by Country(World), 2010
1
2
3
6 7
Potential CountriesFleetboard, Transics, Qualcomm, GreenCat, Dynafleet, Microlise, Mi
xTelematics, Vehco and others
9
5
4
2 3 4 5 6 71 North America Europe Russia Brazil South Africa Middle East Asia
Source: Frost & Sullivan
Qualcomm, PeopleNet(Trimble), XATA, Teletrac, Webtech Wireless
and others.
MixTelematics, Digicore, Netstar, Tracker and others
Beyond 2014
Autotrac, Zatix, Onixsat, WirelessCar, and others
Fleetboard has recently set-foot in China with
about 200 units
FMS Line-Fit to be Standard: Markets, Platform Change, Miles Driven & TruckPricing are Considered to be Key Factors; Initial Free Subscription Allows FleetOwners to Realize the Benefits of FMS, Increasing the Active Subscribers
Me
e
s
FMS
Line-Fit
Markets / Countries
Platform Change
Long-Haulage
High-priced models
Medium & Heavy-duty Commercial Vehicle Telematics Market: Key Factors, Challenges & Steps to Line-fit FMS (Europe), 2010
“ Hardware penetration doesn’t necessarily equate
to service penetration ”
10
Note: For base service, ~48 months (Eg:Scania) and for advanced service ~4 months (Eg:Fleetboard) free service
Some operators do not want to be linked to theOEMs or to a particular OEM
Some OEMs do not have the capability ofexpanding outside their own vehicle line
Operators with mixed fleets do not prefer OEM’s base-telematics systems
Source : Frost & Sullivan
•First 4 up to48 MonthsFree
Free Service
•LucrativeFinancial Options– money backguarantee
Lucrative Finance •Increase in
Free Periodand/or BaseServices
Add-on’s
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
Integrated System – Adds More Value
Engine
Driving Behaviour
Parking Slots
TollsCharging
Points
Eastern EU is experiencing driver shortage (Polish drivers are replaced by
Bulgarian drivers) – Demand for Navigation
11
Va
lue
Ch
ain
O
pp
ort
un
itie
s
Driver Work Time
Vehicle Characteristics
Engine
Characteristics
Cost/Environment Characteristics
Behaviour Characteristics
Eco-Routes
Secured Routes
Key Findings
“Shift to high-end FMS ; value added services
that are demonstrating higher ROI – offer
services Advanced Back-end
Integration, Integration of Training
Module, ADAS Integration and others ”
Services to Target
“ Focus on Recurring Revenue and new
service offerings – promotion of hardware &
software maintenance contract; consulting
approach and others ”
Revenues to Target
12
Source: Frost & Sullivan
Fleet Size to Target
“ Under penetrated small fleets provide
significant growth opportunities – offer
right product and service mix ”
Countries to Target
“ Matured market to undergo replacement
cycle & Eastern Europe to see growth –
target new regions like South
America, Middle-East, China; start
educating these market ”
Key Telematics Vendors
13
Rapid Migration Towards MCP and OmniExpress
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
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
Research Service Also Includes Detailed Profiling of the Below Key OEMs Offering Telematics Services
17
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
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-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 FleetSize; 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 -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
1
2
3
19
Identifies key countries with FMS opportunities and key suppliers in each country, globally; lists theupcoming legislations across the globe; the North America report graphs the split by local, regional andlong-haul ; also by private and for-hire fleets
Showcases the real-time return of Investment (ROI) example with saving potential in Euros; and alsographs the various ways of attaining revenue opportunity; in addition it also presents the ‘Next Big Factorfor Product Differentiation For Truck makers’ in the new decade ?
Comprehensive profiling of key telematics vendors – packages (pricing), suppliers (hardware, navigation, &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(plants location, production volumes, models likely to offer FMS as line-fit and others) and percentage of FMSpenetration in its production volumes by 2017
4
5
6
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