New analysis from Frost & Sullivan, Analysis of the Commercial Vehicle Telematics Market Outlook in South Africa, finds that the installed base of CV telematics in South Africa stood at approximately 600,000 in 2014 and estimates this to reach around 840,000 by 2017. Features for driver behavior, maintenance, productivity and utilisation will be in demand, along with traditional safety and security capabilities.
Automotive production in South Africa has been steadily increasing. The parallel focus on fuel efficiency and low cost of ownership is expected to bolster the adoption of telematics in South African commercial vehicles (CVs). Post 2017, the enforcement of relevant regulations and the entry of vehicle original equipment manufacturers (OEMs) through partnerships and acquisitions is expected to augment the deployment of telematics in CVs, according to Frost & Sullivan.
Aftermarket suppliers dominate the overall telematics market in South Africa, with OEMs only recently kicking off in-house telematics fitments, according to the analysis. Joint ventures, mergers and major acquisitions among vehicle OEMs and aftermarket vendors are likely to gain momentum, making room for entrants.
"The emergence of new business cases, such as pay-per-service as well as higher awareness on mid-tier solutions, will unlock opportunities in the South African CV telematics space," explained Frost & Sullivan Automotive and Transportation Research Analyst Gokulnath Raghavan. "Major OEMs are looking to provide factory installed telematics, especially in light CVs since more than 90 percent of this segment remains untapped."
However, the lack of policies and standardization will present a daunting challenge for new participants. Strategic pricing will be vital to succeed in the price-sensitive and highly competitive market, according to the analysis.
"To improve their service relationships, telematics vendors must train fleet operators on the use of information gleaned from telematics," suggested Raghavan. "Greater awareness on technology and the aggressive involvement of vehicle OEMs as well as third-party vendors will facilitate the shift to higher-end services and establish telematics as a requisite in the South African CV domain."