While there are parallels between the Mexican and U.S. telematics markets, most notably that trucking companies (both for-hire and private trucking companies) were the first adopters, there are distinct differences, according to Clem Driscoll, president of C.J. Driscoll & Associates and author of a first-of-its-kind report on the Mexican telematics market.
“Most large trucking fleets in Mexico have a GPS fleet tracking system, and the main motivation is security, especially for fleets that carry valuable cargo, which could be electronics, food, drinks, etc. Violent theft is not uncommon. The drug cartels are responsible for a lot of the thefts of both cars and truck,” he said. “Telematics was also first adopted by trucking companies in the U.S., because of the need of mobile communications pre-cellular.”
C.J. Driscoll & Associates has released its 148-page “2016-17 Mexican Telematics Market Study,” a comprehensive report details the state of telematics use in Mexico, including market penetration, types of fleets using telematics, and the major players.
There are about 1.1 million commercial telematics units in place in Mexico’s commercial vehicles, which number about 10 million. About 4 million of these commercial vehicles can be classified as fleet vehicles, according to C.J. Driscoll & Associates estimates.
Another difference between the U.S., European, and other more mature telematics markets is that the Mexican market is highly fragmented with no telematics provider commanding more than a 5% market share. However, there are a number of solution providers with more than 10,000 units in service. The leading Mexican telematics provider is Copiloto, but Driscoll noted that telematics companies from the U.S., Canada, Europe, South Africa, and South America are either active in or are moving into the Mexican market. Among these outside telematics companies active in the Mexican market are Geotab, Omnitracs, and Teletrac Navman.
While the U.S. market in particular has seen significant consolidation over the past year, the Mexican market has had little to no mergers or acquisition activity among the telematics companies, according to Driscoll.
“In Mexico, we’ve seen virtually no M&A activity that we’re aware of,” he said. “All the Mexican-based providers are privately held and they all reach a certain level and scale where they’re profitable and they just keep the business going.”
The telematics market is growing, however, expanding into segments beyond trucking, including government, private security firms (which are also, in some cases, providers of telematics solutions), public transit, taxi services, public safety — particularly ambulances — utilities, and telecom companies.
The “2016-17 Mexican Telematics Market Study” includes a detailed overview of the Mexican commercial market, profiles of 24 of the largest Mexican-based telematics providers, and profiles of 13 overseas companies currently active in or entering the Mexican market. For more information or to purchase the full report, go to www.cjdriscoll.com.