The installed base of telematics devices in the car rental and leasing market in Europe and North America reached 5.6 million in 2021, according to a new market research report by IoT analytics firm Berg Insight.
The uptake of telematics in the industry is believed to be driven by demands on fleets to increase fleet utilization, the emergence of new mobility services, and the overall electrification trend in the automotive industry.
The COVID-19 pandemic has also increased demand for digital business models and increased adoption of telematics in both the rental and leasing industries.
The total active installed base is forecast to reach 12.6 million by 2026 across the rental and lease fleets in the two regions.
The telematics penetration rate in rental car fleets in Europe and North America is expected to increase from 38 percent in 2021 to 86 percent in 2026. The telematics penetration rate in the total lease vehicle population in the two regions reached 35 percent in 2021 and is expected to reach 61 percent by 2026.
Several categories of telematics applications are used today in the context of car rental and leasing. “The key benefit of using telematics for car rental and leasing companies is improved control over assets,” said Martin Cederqvist, IoT analyst at Berg Insight.
Fleet managers have an obvious interest in tracking the location of their vehicles and monitoring their status to prevent fraud, theft and abuse. In the long run, this will result in reduced running costs and potentially lower insurance premiums as well.
Mr. Cederqvist continued:
“Telematics technology can also enable new business models or services, such as long-term pay-per-use contracts for private vehicles or automated mileage reports for company cars, as well as digital and contactless rental and car sharing experiences.”
Car rental companies have also faced challenges to meet a rising demand for rental cars over the last year due to semiconductor shortages and production disruptions in the automotive industry, which in turn has had a positive impact on the adoption of telematics as the wise use of telematics systems has been shown to have a positive impact on a contribute to optimal fleet utilization.
The telematics value chain spans multiple industries, including a large ecosystem of companies including hardware specialists, software specialists and end-to-end solution providers. The telematics players active in the rental and leasing market include telematics specialists who are exclusively or mainly active in the rental and leasing sector and offer solutions for digital access or vehicle fleet management.
Examples of companies present in the rental and leasing market are fleet management solution providers Webfleet, PowerFleet and Geotab.
“Geotab has established itself as a leading provider of telematics services in the rental and leasing industry and has an installed base of more than 600,000 telematics subscribers in the two regions in this segment,” said Cederqvist.
Other noteworthy telematics service providers in the rental and leasing telematics market are Targa Telematics, CalAmp, Octo Telematics, Airmax, IMS and Zubie as well as specialized companies such as RentalMatics, HQ Rental Software, Kirrk and TSD Mobility Solutions. The integration of telematics data between automotive OEMs and rental and leasing companies has become increasingly common, and the involvement of automotive OEMs in the rental and leasing telematics industry is expected to accelerate in the coming years.
“Examples of automotive OEMs that have direct telematics integration with rental and leasing companies include GM, Ford, Stellantis (Free2Move), Tesla and Toyota,” added Mr. Cederqvist.
