GOTHENBURG, SWEDEN – According to a new research report from the analyst firm Berg Insight, 2.2 million passenger cars in Europe had an on-board telematics device at the end of 2007. Stolen vehicle tracking is the main application, followed by automatic emergency call, driver assistance and motor insurance telematics.

“After many years of slow adoption, we now see that the market is entering a growth phase,” said Tobias Ryberg, senior analyst, Berg Insight. “The penetration rate is still below 1 percent of the total car parc, so there is a huge untapped potential.”

Berg Insight forecasts that the major breakthrough for telematics in Europe will come with the introduction of the eCall system proposed by the EC. Even though the original 2010 deadline for a mandatory GSM/GPS emergency call device in all new cars will not be possible to meet, there is a high probability that eCall will become a reality in the early 2010s. Berg Insight projects that the safety system will generate 16 million new telematics-enabled cars per year once implemented.

The report highlights regional variations in the applications for which telematics devices are being used. Stolen vehicle tracking is popular in most Western European countries expect Germany, where the application has failed to generate interest. In Italy, the insurance industry actively supports telematics initiatives that help reducing vehicle-related risks. Due to a high incidence of theft and fraud, Italy is the most expensive market for motor insurance in Europe. Car owners who install a telematics device that give their insurance company access to vehicle data in case of a crash and GPS-tracking in case of a theft can get substantial premium rebates.