telematics in india: trends and...

Chennai, January 18, 2017

Telematics in India: Trends and Opportunities

2 20170118_Connected Vehicles 2017_Telematics_Short.pptx

Agenda

Telematics: An overview Brief overview of the significance of telematics in automotive

A

Telematics market Global market overview, Deep dive into Indian telematics market including characteristics, market structure and drivers

B

Trends and opportunities in India Key trends and characteristics of telematics ecosystem, potential opportunities for Indian players

c


In automotive sector, telematics equipment offers a wide variety of features to help make the vehicle smarter

Telematics:

Telecommunications + Informatics

Proactive maintenance

Driver behavior

Journey analysis

Vehicle tracking

GPS and navigation

Accident recording

Accident notification

Vehicle theft tracking

Fuel management

Intra-fleet benchmarks

Vehicle diagnostics

Vehicle logbook

Mileage reporting

Internet connectivity

Services facilitated by telematics equipment in automotive industry

Source: Secondary research, Roland Berger

Telematics – An overview


Globally, the vehicle telematics market is valued at USD 39 Bn; strong growth at 18% CAGR projected till 2022

Global vehicle telematics market revenue, 2014 – 2022 [USD Bn]

103

88

7564

5546

3933

28

2014 2015 2016E

+18%

2018F 2022F 2021F 2020F 2019F 2017F

Revenue share by vehicle type, 2015 [%]

66%

34%

CV

Others

> Global vehicle telematics market is valued at ~USD 39 Bn is 2016, it is expected to grow at CAGR 18% to USD 103 Bn in 2022

> Global telematics market is dominated by commercial vehicles which account for nearly two thirds of the total share

> "Others" segment includes passenger vehicles, aircrafts etc.

– Passenger vehicles drives demand in this segment primarily due to significant usage in cab services and increased deployment in

medium and high end passenger vehicles such as Volkswagen, BMW, Audi etc.

Global vehicle telematics market: Overview

Global telematics market


WGA - add slides on global CV telematics market since it is very different from India

NA – Added 3 slides – market overview and why connectivity is important in trucks


EMEA dominates the global CV telematics market with a 38% share; APAC is expected to be the leading contributor by 2022

Global telematics market – Commercial vehicles

Global CV telematics market revenue, 2014 – 2022 [USD Bn]

62

53

46

4034

3025

2219

2016E 2014 2015 2020F 2017F 2018F 2019F 2021F 2022F

+16%

Revenue share by region, 2015 [%]

Americas

26%

36%

EMEA 38%

APAC

> CV telematics finds applications in various fields such as passenger safety and security, customer relationship management, business

services such as fleet management and tracking as well as private services such as navigation support to passengers

> EMEA accounts for the greatest share of the market – regulatory initiatives such as eCall Driver Safety project are a key driver

> APAC is the second largest market driven by countries such as China, Japan, India etc. – By 2022, APAC is expected to be the leading

contributor to global commercial vehicles telematics market

Global commercial vehicle telematics market: Overview

New slide



Key driver behind growth in CV telematics is that it enables a greater value chain coverage….

Cov

erag

e

Transportation value chain

High

Low

New vehicle

sales

Fleet mgmt. Service/

repair

Spare part

sales

Rental Financial

services

Fleet/vehicle

operation

Coverage 2013 Coverage 2030

> Connectivity based solutions enable OEMs to understand their customers' needs and address them with tailored product and service offerings – OEMs need to strengthen

their aftersales business – Increased customer retention required

– Moreover OEMs are requested to serve growing customer demand – Extended support and user-specific products and services (e.g. remote diagnostics)

Enabler connectivity

Importance of truck connectivity

Profit pool coverage Connectivity solutions

Source: Roland Berger

Remote diagnostics

Load detection/ monitoring Performance analysis

Order management

Tacho management

…

Connectivity solutions


New slide


8

and enables OEMs to differentiate themselves and capture opportunities beyond vehicle sales

Truck OEM engagement/core business 2013 2030

> There is a higher engagement of OEMs along the value chain who are expected to market themselves as full-service providers

> Logistics providers will require extended services and tailored solutions such as fleet/vehicle operation models

> Logistics companies will focus on business contracting and operation of core routes – maintaining capacity/cost flexibility when contracting new business or facing demand volatility and business risks

100%

0%

Fleet/vehicle operation

Transportation business

New vehicles ("Iron & steel")

Financial services

Spare part sales

Fleet management

> Route execution

> Driver lease

> Vehicle lease

Transportation value chain

OEM engagement/ core business

Source: Roland Berger

OEM engagement along the transportation value chain – Outlook 2030

Rental

Service/repair


New slide


In India, telematics market is still at a nascent stage; commercial vehicles market dominates the overall market

CV Telematics introduced for the first time in India

Launch of Mahindra e2o plus (an electric vehicle), first connected car in India

Government mandates that GPS and panic buttons are a must for all taxis

CV manufacturer Ashok Leyland launches Alert, a GPS based telematics service

Evolution of telematics in India

2003

2008 2013

2015

2012

Government announces that it plans to install tracking and fleet management services in 400,000 buses by 2017

Characteristics of Indian market

1 Dominance of CV sector

> Adoption low in PV and single truck owners due to prohibitive costs

> Primary usage by fleet operators and taxi companies

2 Use of basic services

> Usage of telematics in India is characterized by basic services like fleet tracking and management

> Optimization of fuel costs as well as safety and security concerns are expected to drive growth in future

– Apart from CVs, small and medium car segments offer high growth opportunities


Telematics market in India

Indian telematics market: Evolution and characteristics


Vehicle telematics is gaining popularity mainly due to its advantages such as safety, information, navigation and remote diagnostics

Telematics

in

Indian market

> Telematics provides the car with anti-theft

features through tracking the location of

the car and an automated interface with

law enforcement agencies

> This reduces the response time, which

leads to reduction in vehicular theft

Safety against thefts

Navigation

Remote diagnostics

> Data collected by telematics black box

can provide valuable insights into

functioning of the vehicle thus providing

service reminders

> Driving behavior had also led to promotion

of usage based insurance in India

Wireless connectivity

> With increasing penetration of mobile

technology in India, there is an increased

demand for V2X connectivity of cars

> Hands free calling, Bluetooth compatibility

and smartphone connectivity are in high

demand in urban users

> GPS connectivity and navigation services

have become high demand due to

increasing complexity of road network in

cities and availability of real-time traffic

information availability through online data

Factors promoting telematics in automotive market


Telematics market in India


CV telematics market in India is expected to grow at 25% p.a., mainly led by after-market segment and entry level solutions

1,383

293

+25%

2015 2022F

Telematics installed base ['000 units] Split of installed base

Type of fitment Type of solution

Split by region Split by industry

Aftermarket

84%

16%

OEM

31%

1%

68%

Mid tier

Entry level

High end

Others Tourism

3% Retail 11%

Pharma

12%

21%

Cold chain

27%

Courier

26%

South

North

West

East

13%

27%

28%

32%

Telematics penetration in CV market in India


Telematics market in India – Commercial vehicles


There are ~20 players in the domestic market, top 3 account for 60% of the total market

Comments CV telematics market share in India [2014]

30%

17%

Others

5%

4% Mahindra

Dhanus Technologies

Ashok Leyland Telematics

CMC Technology

10%

7%

e-Logistics

Trimble

16%

11% Arya Omnitalk


Competitive landscape in CV telematics

> The Indian telematics industry is highly competitive

> The competitive environment is further expected to

intensify with increasing product extensions, more

advanced offerings, technological innovations and

M&A

> Trimble is the market leader with 30% market share.

The top three players (Trimble, Arya Omnitalk and

CMC Technology) account for ~60% of the total market

share

> To remain competitive in the market, vendors not only

have to develop new technologies but also keep

abreast of global developments and emerging

technologies that could potentially impact their product

portfolio



OEMs operating in India are entering partnerships with telematics players to offer integrated fleet management solutions for logistics

Telematics Systems

Source: Secondary Research, Roland Berger

Navigation

Real Time Tracking Geofencing SMS Alerts & Queries

Real Time Tracking Geofencing SMS Alerts

Real Time Tracking Geofencing SMS Alerts

Real Time Tracking Geofencing SMS Alerts & Queries

Real Time Tracking SMS Alerts

Fleet Management

Trip Management Driver Analysis Report Generation

Driver Analysis Report Generation



Safety & Security

Anti theft alerts

Anti theft alerts Collision Warning Systems in school buses

Anti theft Immobilizer Emergency SOS button Driver Assistance System

Anti theft alerts Fire Detection and Supression System for buses

Multi Drive Mode for driving assistance

Remote Unit Mgmt. Maintainence Reminders

Remote Diagnostics Maintenance Reminders

Maintenance Reminders

Vehicle Mgmt. Others

Mobile App connectivity Infotainment and Passenger Info System for buses

Infotainment and Passenger Info System for buses

Mobile App connectivity Infotainment and Passenger Info System for buses

Infotainment System for buses


Maintenance Reminders Mobile App connectivity Infotainment System


WGA - I had footnotes in these slides, eg. for bharat benz as this was a dealer solution, where are they?

NA – Added, double-checked discrepancy, they were missing in the source from where I had taken this slide

1)

1) Trident Trucking, dealer of Bharat Ben in Karnataka, has partnership with Ormat


On the other hand, connected cars market in India is still at a nascent stage; reach expected to hit 2.6% in 2020

2016 2018

465

2017

634

226

2015 2014

852

142

2020 2019

77

333

# connected cars

Connected cars in India ['000 units]

2.6% 2.1% 1.6% 0.9% 0.6% 0.4% 1.3%

% Penetration in India

Revenue in the "Connected Car" market [USD m]

2014 2020

2,430

658 Safety & Driving Assistance

2018

933

Connectivity

Navigation Services

2016

Diagnostics & Maintenance

2015 2019

453

1,298

2017

302

1,786 Content & Services

+30.0%

+70.4%

+49.1%

+85.0%

+38.8%

CAGR

2014-20

Connected car market in India

> Connected cars segment include cars with connectivity to the internet (“embedded telematics”), Wi-Fi Hotspots within the car, safety and

driving assistance systems, navigation services, location-based advertising, payment, predictive maintenance, usage-based insurance,

remote update services, infotainment, productivity services

> The market's largest segment is the segment "Safety & Driving Assistance" with a market volume of USD 486 m in 2016 and would continue

to be the largest in future as well

Source: Statista; Roland Berger analysis

Telematics market in India – Passenger vehicles

Slide can be hidden if required as this is the only slide which talks about PV telematics. There is not much data available on PV telematics market in India


Telematics ecosystem will involve diversified competencies…

Source: Roland Berger analysis

Distribution of the connected vehicle / device

Management of client relationship

Manufacturing of components and interface

Manufacturing of Intelligence /

OS Connectivity supply

Data processing Services providing

> Manufacturing of hardware: screens, control

interface, sound system, measuring elements,

modem, connected devices (embedded,

aftermarket or brought-in)

> Development of operating systems and

connected intelligence inc. HMI/ IVI1) (external

to core-car onboard computer)

> Distribution of connected vehicle or device

> Providing of

connectivity hardware

(simcard, Wifi etc.)

> Providing of connectivity

services (prepaid,

subscription…)

> Data analytics and knowledge generation:

local and central data storage, encryption,

enrichment, calculation

– Driver data

– Personalized cloud data

– Vehicle data

– Vehicle health status data

> Creation and commercialization of apps and

software

Telematics market in India – Trends and opportunities

WGA - This slide is not clear to

me pls explain

NA – The slide shows various competencies that will be required in the present/future to leverage telematics

They include

1)Manufacture of components (in vehicle connectivity devices) and associated interfaces

2) Development of OS and intelligence (off-vehicle devices such as sensors connected to environment and their underlying logic)

3) Connectivity supply includes hardware and associated services to leverage telecom technologies

4) Data processing and analytics

5) Providing services based on data collected from vehicle or 3rd party content providers

Other competencies include distribution of devices (could possibly be done by a different company) and management of client relationship which would include skills pertaining to customer lifecycle management 1) In-vehicle infotainment


… and greatly expand the playing field by bringing in new players

Traditional players New players

IT/INFRASTRUCTURE PROVIDERS OPERATORS

DEVICE MANU-

FACTURERS

INTERNET COMPANIES

IT SERVICE PROVIDER

SUPPLIERS

SPECIFIC SERVICES

Reach new customers and keep the control of

the client relationship

Major actors of the connected car environment

Consolidate position on intelligence systems, avoid

new entries…

Extend business to new usages…

Extend the connectivity and mobility way of life to new universes …

Reinforce the relationship with customers, optimize vehicle design and usage…

OEMs



http://www.ford.de/

http://www.ford.de/

http://images.motorcycle-usa.com/PhotoGallerys/bosch-logo.jpg


The changing ecosystem will also lead to new alliances, roles and underlying principles

New

Alliances

> Insurance groups could team up with navigation and emergency call system providers to get access to driver data

> Network giants such as Google etc. could sponsor mobile internet access from the vehicle

New

Roles

> Automotive companies are becoming software developers

> Telecom companies are starting to see themselves as automotive suppliers for data transfer channels

> Hardware companies become analytics provider/operator, for example Octo Telematics

New speed,

new principles

> Automotive industry needs to realign itself – new cycles, partners ….

> IT industry development cycles are much faster than those of car manufacturers



Changes in the new ecosystem WGA - where is this from, what is

Octo Telematics

NA – Taken from the pdf document you had shared titled ' Who will drive the Connected car?' (page 13)

Octo telematics is one of the initial entrants into telematics insurance opportunities and have built solutions to help insurers and drivers by capturing data such as driving behavior, location, duration, contextual elements and crash impact information


As a result, several opportunities open up; Indian players can leverage and monetize these to build successful businesses

Domain Potential opportunity description Sno.

2 Driver assistance and related services

(Services based on underlying product solutions)

IT services

(Supporting software/enabler solutions)

> Integration, management and maintenance of entire consumer information stack

> Cyber security solutions 3

Opportunities for Indian players [selection] Not exhaustive



1 Connectivity solutions

(Product (largely hardware) focused)

> Providing hardware and software solutions which leverage various communication technologies and enable M2M1) communication

> Common applications include various ADAS sensors such as driver drowsiness detection, parking assist, lane departure warning systems, lane keep assist etc.

1) M2M – Machine-to-machine

WGA - what does this mean

concretly?

NA – Service offerings in the telematics market will either be based on data collected from vehicles/drivers or gathered from other 3rd party providers. Content providers are those 3rd party providers. For example, Facebook can be a content provider and provide my social media related data which can be leveraged to form a service that tells me which of my friends are nearby on my driving route. Similarly, Zomato can be a content provider and can tell me average ratings of various restuarants nearby on my driving route

Data processing and services

> Data analytics services to record various types of vehicle and driver data; some examples include

– Driver data including his preferences, condition, fatigue, behavior etc.

– Vehicle data including vehicle health, GPS location, position, speed etc.

– Data from vehicle environment such as traffic lights, weather etc.

> Formulation of service modules such as those pertaining to navigation, diagnostics etc.

Content providers

> Providing all relevant data (e.g. social, consumer preferences etc.) from users to vehicles

> Development and distribution of various services to different players in the playing field

Segregated growth areas into product (primarily hardware with some software), services and supporting software/enabler solutions

Added ADAS point in "hardware" side as it is largely sensor driven


Hardware is a fast-growing segment within telematics market with ~ 21% CAGR till 2022; connectivity solutions are a key component

Hardware market growth in India CV telematics[USD m]

3719

174

48

185

90

378

5

2015 2022F

Installation Hardware Services

+19.6%

+24.8%

+21.4%

CAGR

2015-22

> Hardware market is an important component of overall telematics market accounting for more than 50% of share in 2015

> It is expected to grow at CAGR 21% till 2022 to a total market size of USD 185 m within overall CV telematics market; separate potential within other segments such as PV, aircrafts etc.

> Hardware market includes on-board, off-board units and associated interfaces – both in-vehicle as well as those outside the vehicle

– Key examples of products include connected devices such as sensors and other devices including ADAS devices which enable machine-to-machine communication

> Compared to software, hardware complexity in Indian market is still evolving – growth in telematics has made hardware structure more complex and sophisticated which is expected to slow down overall market growth

Trends and opportunities – Connectivity solutions

Source: 6WResearch, Secondary research, Roland Berger

CV telematics market growth by hardware, services and installation costs

New slide to show market potential

Corresponding data was not available for PV telematics market in India and hence have considered only CV


Services is the fastest growing segment within telematics market with ~ 25% CAGR till 2022; significant potential exists

Services market growth in India CV telematics[USD m]

3719

174

48

185

90

378

5

2015 2022F

Installation Hardware Services

+19.6%

+24.8%

+21.4%

CAGR

2015-22

> Services market is an important component of overall telematics market accounting for ~ 40% share in 2015

> Services market is expected to grow at CAGR 25% till 2022 to a total market size of USD 174m within overall CV telematics market; separate potential within other segments such as PV, aircrafts etc.

> Services market value chain includes actors such as content provider, content aggregator, application providers and integrators

– Key examples of offerings include analytics based services for diagnostics, fleet management, fuel cost optimization, navigation etc. as well as infotainment/ entertainment services

Trends and opportunities – Driver assistance and related services

Source: 6WResearch, Secondary research, Roland Berger

CV telematics market growth by hardware, services and installation costs

New slide to show market potential

Corresponding data was not available for PV telematics market in India and hence have considered only CV


Since the market is in a nascent stage, multiple opportunities exist – key is to tailor your offerings to Indian context

Trends and opportunities – Examples of select Indian offerings


Solution Potential/existing tapped opportunity Sno. Rationale

Parking solution > PparkE offers parking solutions in the city through few taps on the phone

> Phone sensors and applications can inform users of nearby parking spots, pre-book spots, navigate them to chosen spot and pay required amounts

1 > Average urban driver spends ~40 minutes to find parking slot

> Parking is a major hassle with limited spaces in garage

Entertainment during commute

> Potential opportunities include bringing engaging applications such as social media etc. to driver

– Examples include customized recommendations, alerts on places of interest, friend suggestions enroute etc.

> Key point to keep in mind is that all opportunities must be brought in a driver friendly manner which does not hamper driving by distracting drivers

> OEMs such as Volkswagen launched IPL edition cars in India, which could connect to Internet and get live cricket feeds on interactive live display screens to cash in on the cricket fever in India

2 > Average urban driver spends ~90 minutes driving to and fro from the workplace, representing a large portion of their entire day

IPL edition cars source

http://www.oncars.in/car-news/volkswagen-launches-vento-ipl-edition-update/153

Source

https://www.pparke.in/

https://pparke.in/info/2015/06/26/66/

WGA - How does this tie to the discussions earlier? where are CV applications? can we talk about Hitex Robotics as well and

their ADAS applications? Are there other examples that we should have here?

NA – Hidden this slide since it doesnt tie up in the storyline. Will add ADAS applications in the previous section on services







Contact us

Your contact at Roland Berger

Dr. Wilfried Aulbur Managing Partner India Member of the Supervisory Board Roland Berger E-mail: [email protected] Mobile: +919920630131

Office address: Mumbai

702, VIBGYOR Tower,

Bandra Kurla Complex,

Mumbai - 400 051

Delhi (Gurgaon)

Level 18, DLF Cyber City,

Building No. 5, Tower A,

Phase III, Gurgaon - 122 002

Pune

4th Floor, Alaina Building,

Lane 8, Koregaon Park,

Pune – 411 001

Chennai

Level 5, Tamarai Tech Park,

S.P. Plot No.16-19 & 20-A,

Thiru Vi Ka Industrial Estate,

Inner Ring Road, Guindy,

Chennai – 600032

telematics in india: trends and...

Documents