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Drivers of Telematics Adoption in Passenger and Light Commercial Fleets

The International Truck, Trailer and Equipment Show

In early April we attended the International Truck Trailer and Equipment Show in Melbourne. As always the range of trucks on display was impressive, but most of our time was spent speaking with the leading providers of telematics systems including Go-Tech, International Telematics, Mix Telematics. MT Data, Navman Wireless, RTL Telematics, and Trimble. We should also mention that AGL’s progress with their Compressed Natural Gas (CNG) offering also caught our eye but we will leave a deeper discussion on those advances for another blog.

There is no doubting the relevance and importance of telematics to the road freight transport industry, particularly given the new regulatory environment. But are the prospects for the adoption of telematics across passenger and light commercial vehicle fleets the same, how are systems currently being used and what factors will drive take up?

We have previously published the results of our research which showed that only 15% of fleet managers say they have fitted a telematics system in their fleet. Despite telematics evolving dramatically over the last few years when we investigate in more detail the features fleet managers are using, around two-thirds of these organisations are still only using simple vehicle tracking and navigation.

The fleet managers that we have spoken to, including adopters, considerers and rejecters mention a wide range of factors they take into account when considering telematics. As illustrated below, this is a complex and confusing area for many fleet managers which may explain why there is so much inertia in the market.

Telematics Systems

Fundamentally, the main barrier to adopting telematics appears to be set-up and running costs, which most fleet managers do not believe outweigh the benefits. We recently interviewed a fleet manager, responsible for the fleet of a business, managing large-scale engineering projects who said:

“The running costs for telematics are far too high. Installation is not the problem but I was quoted a charge of $4 per car per day. These costs have to come down before we use telematics.”

As described above most of the drivers for adopting telematics in the passenger fleet market are internal, unlike the road freight transport industry where external factors, such as the establishment of the National Heavy Vehicle Regulator, have prompted businesses to consider telematics as a compliance tool. 

As part of our forthcoming study of the fleet technology and telematics market, ACA research will be addressing the barriers and benefits around adoption of telematics, and the pricing structures that are likely to encourage more fleet managers to trial and adopt these systems in the future. A number of organisations have expressed interest in this study – please get in touch with us if you would like further details. Or, if you would like to read more on this exciting field have a look at last weeks blog on telematics in the road freight transport industry and its associated maturity curve.

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Topics: Automotive Research