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Auto telematics growing at 17% CAGR

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IHS Markit estimates that more than 33 million light vehicles equipped with some form of telematics were produced in 2016 globally.

It is expected that production of such light vehicles will grow at a CAGR of 11%  to reach over 66 million units in 2023.

Approximately 70% of new light vehicles produced in 2023 will be equipped with some form of OEM telematics systems.

CE telematics continue to lead the global automotive telematics market since it is a relatively low-cost solution and available in a wide range of vehicles. It currently makes up nearly half of the market, the new research says.

The rapid growth of the smartphone market has had a significant impact on the telematics market, as many OEMs currently offer smartphone integration via Apple CarPlay and Google Android Auto or other smartphone projection-mode solutions as part of their connected car offerings.

Meanwhile, embedded telematics solutions are often used for safety and security features of telematics services such as emergency calling, roadside assistance, stolen vehicle tracking, over-the-air updates and more.

The demand of embedded telematics control units (TCUs) will increase, especially with the European eCall mandate that goes into effect in 2018. Then, the total revenue of embedded TCUs is expected to grow at a CAGR of 15 percent by 2023, IHS Markit says.

Hybrid telematics solutions, using both an embedded TCU and a connected CE device to provide a two-way data connection to the car, will have the strongest growth among the three type of telematics systems during the forecast period, according to IHS Markit forecasts. The production of hybrid telematics systems will surpass the production of other types of telematics systems in 2018. It will continue to lead the market throughout the forecast period.

“A large portion of vehicles already feature multiple connections especially in the luxury segment,” says IHS’ Anna Buettner,  “this trend is expected to spread to other lower segments during the next few years, as strong market demand will bring connectivity to vehicles and regions that traditionally lagged behind.”