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Study: Telematics to Play Bigger Role in Greening Fleets

January 12, 2010

LONDON --- More and more fleets in North America and Europe will come to rely on telematics to bolster fuel efficiency and reduce CO2 emissions in the next five years, according to a study from Frost & Sullivan. 

Fleet companies and consumers alike are increasingly warming to green telematics services since they can reduce emissions and fuel costs by 10 percent, according to the report titled Strategic Analysis of European and North American Green Telematics Market for Passenger and Commercial Vehicles. The study found that the European and North American fleet green-telematics market will likely increase from $80.0 million in 2008 to $700.0 million by 2015.

The market is growing at a compound annual growth rate of 36 percent from 2008 to 2015, primarily because of mounting pressure on fleet companies to reduce their carbon footprint and develop a greener image. 

"The desire for greater return-on-investments (ROI) benefits, given fluctuating oil prices, is a critical driving factor for green telematics in the commercial fleet sector," explained Frost & Sullivan Research Analyst Karthik Elamvaluthi. "Additionally, the high cost of implementing alternative means of emissions reduction and garnering a greener image also boost this market." 

Green telematics packages, such as vehicle and driver management services, provide complete data for driving behavior and fuel consumption analysis for commercial vehicles. Optimizing these parameters ensures green fleet operation. Real-time navigation alerts also help reduce unwanted mileage. As commercial fleets grow increasingly concerned about the impact of ROI while striving to improve their green image, both these elements are critical drivers, according to Frost & Sullivan. 

However, the economic slowdown is forcing fleet companies and individuals to rethink their priorities and investments. There should be greater efforts to increase public awareness of the availability of green telematics systems and services, according to Frost & Sullivan. 

"Although a few fleet companies and private car buyers are aware of the benefits of green telematics services, the majority are affected by the economic crisis and are still weighing their priorities, further constraining the growth of this market," said Elamvaluthi. 

"Navigation manufacturers, insurance companies, telematics vendors and fleet companies should strive to raise awareness about green telematics systems," concluded Elamvaluthi. "They should focus on it being a cost-effective and fuel-efficient method to decrease emissions." 

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