VEHICLE TRACKING SYSTEM MARKET ANALYSIS

The global vehicle tracking system market size was valued at US$ 9.3 billion in 2022 and is anticipated to witness a compound annual growth rate (CAGR) of 12.32% from 2023 to 2030. The rising demand for GPS-based technologies and increasing adoption of connected vehicles is driving the market growth. Similarly, government initiatives to promote eco-friendly transportation are also likely to fuel the market growth. These policies promote the use of electric and battery-powered vehicles and are a significant factor driving global demand for these systems. The growth of this market is also supported by the rapid expansion of the app-based transportation system, rise in vehicle leasing and rental activities, and concerns regarding safety of automobiles from theft.

Global Vehicle Tracking System Market: Regional Insights

The global tracking system market is anticipated to show substantial growth in North America region, owing to increase in concerns regarding safety, security and emissions of vehicles, which are further significantly influencing transportation industry. Moreover, governments of countries in this region have acknowledged these concerns and consequently are getting involved in development of safety programs and introduction of stringent regulations. For instance, the government of the U.S. developed a program called ‘National Safety Program’ for the General Services Administration fleet. These factors are thus driving growth of the global vehicle tracking system market across the region.

Furthermore, among other regions, Asia Pacific is also projected to gain major growth in the global vehicle tracking system market over the forecast period. The growth of this region can be attributed to increasing technological developments in networking, rapidly expanding e-commerce sector, stringent regulatory mandates by governments of countries across the region, and growing sales of vehicles in the region. Moreover, the regions is also witnessing rise in adoption of advanced technologies such as autonomous vehicles, IoT, cloud, and mobility solutions, which is further anticipated to fuel growth of the global vehicle tracking system market over the forecast period.

Figure 1: Global Vehicle Tracking System Market Share (%), By Region, 2022

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Global Vehicle Tracking System Market Drivers:

Growing transportation and logistics industry to boost the market pace

The expansion of global transportation and logistics industry is increasing all over the world. The tracking fleet has become necessary for the security of vehicle and timely delivery, with the rise in fleet size of transportation and logistics companies. The sales of commercial vehicles are rapidly increasing all over the world, which further is creating demand for vehicle tracking systems for maintenance and fleet tracking operations. For instance, as per the Organization Internationale des Constructeurs d’Automobiles, the sales of commercial vehicle increased in Germany to 409,801 units in 2019 from 386,282 units in 2018. Thus, increasing growth of transportation and logistics industry is likely to drive growth of the global vehicle tracking system market during the forecast period.

Need for enhancement in operational efficiency to augment the market growth

The need for reduction in cost and enhancement in operational efficiency is increasing for achieving higher productivity along with profitability. A vehicle tracking systems offers services such as telematics, asset tracking, predictive fleet maintenance, and fleet route planning. With these services, the optimum use of resources and operational flexibility is facilitated. Moreover, use of these systems also enhances the customer experience and helps boost cost savings. Due to aforementioned factors, the demand for vehicle tracking systems is increasing all over the world, which in turn is expected to propel growth of the global vehicle tracking system market over the forecast period.

Global Vehicle Tracking System Market Opportunities:

Emerging cloud computing is expected to bring growth opportunities in the global vehicle tracking system market during the forecast period. The adoption of connected vehicle tracking systems has increased, owing to enhanced connectivity services and proliferation of technology. The use of cloud computing has increased in recent years, as it offers software, computation, data, and storage access resources, without needing information of the vehicle owner. The vehicles come with GPS antenna and GSM-enabled device. The GSM-enabled device is connected to sensors to monitor necessary parameters such as fuel consumption, vehicle speed, vehicle location and others. Due to various benefits of cloud computing, its adoption across vehicles technologies is increasing, which in turn is likely to benefit the market in the coming years.

Growing demand for GPS tracking devices is likely to create business opportunities in the global vehicle tracking system market over the forecast period. The adoption of GPS tracking has increased across insurance companies for calculating car insurance premiums. The GPS tracking device can be used for tracking driving patterns such as rash driving and speeding by insurance companies, which further helps quoting the appropriate premium rate. Thus, increasing demand for GPS tracking for usage-based insurance is likely to offer growth opportunities in the market.

Global Vehicle Tracking System Market Trends:

Transportation and Logistics segment among End-Use is gaining traction

Transportation is an important element in modern society. The use of tracking solutions by the logistics and transportation sector improves vehicle maintenance. With enhanced maintenance, the life of vehicle can be extended. It many also help prevent delays occurring due to break down of vehicles. As the growth of private companies that offer car services and ride-sharing, such as Lyft, Uber, and Roam is increasing, tracking of location data has become crucial asset for these companies. Thus, this in turn is expected to drive growth of the global vehicle tracking system market over the forecast period.

Increasing adoption of car leasing and rental services is a recent trend

Emerging countries are witnessing rise in adoption of car leasing and rental services, which has enabled the vehicle rental companies in these countries integration of tracking device for improving their services. The capabilities of 5G such as enhanced speed, low latency, and high capacity are likely to drive the launch of cellular vehicle tracking, which in turn is expected to boost adoption of vehicle tracking devices. This trend is likely to continue in the global vehicle tracking system market over the forecast period.

Global Vehicle Tracking System Market Restraints:

High cost and complexity to impede market growth

Due to the rapid evolution of technologies, the market for vehicle tracking systems is highly sensitive towards price. The cost of vehicle tracking system involves cost of wireless connectivity modules, expensive automotive electronic components, and the initial cost for integrating software and hardware. The high cost of automotive component is becoming a major factor impacting the market, as end users are highly likely to choose inexpensive options. Thus, the high cost of vehicle tracking systems is expected to hinder growth of the global vehicle tracking systems market over the forecast period. However, with increasing focus of market players to develop cost effective solutions with simple functionality is likely to aid in growth of the market.

Growing adoption of hardware-agnostic tracking solutions to hinder the market pace

With technological revolution, manufacturers are introducing various smartphones at low cost. With increasing advancements in technology and various software applications, smartphone users are enabled to access GPS signals for tracking vehicles. These software applications can be installed easily, and offer an easy to use graphical user interface. Thus, use of smartphone as tracking devices is increasing, which in turn is expected to hamper growth of the global vehicle tracking system market during the forecast period.

Figure 2: Global Vehicle Tracking System Market Share (%), By Type, 2022

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Global Vehicle Tracking System Market Segmentation:

The global vehicle tracking system market report is segmented into Vehicle Type, End-Use, Technology Type, Type, and Component Type.

Based on Vehicle Type, the market is segmented into Passenger Vehicles, Light Commercial Vehicles, and Heavy Commercial Vehicles. Out of which, Passenger Vehicles is expected to dominate the global market over the forecast period and this is attributed to the increasing fleet operators in many emerging countries. Moreover, the growing shift of these operators to offer improved user experience at different costs is also driving growth of this segment.

Commercial Vehicles segment is also expected to witness significant growth in the near future and this is owing to the increasing penetration of e-commerce industry and growing adoption of light commercial vehicles such as pickup trucks and minivans. These vehicles utilized for delivering HVAC, services, and plumbing services, along with courier and trade services. Companies who provide these services are thus capable of monitoring proof of delivery, offer invoices, and show the best delivery route to the team.

Based on End-Use, the market is segmented into Transportation & Logistics, Construction & Manufacturing, Aviation, Retail, Government & Defense, and Others. Out of which, Transportation & Logistics is expected to dominate the global market over the forecast period and this is attributed to the increasing use of GPS (global positioning systems) tracking in the industry. Many companies are using GPS systems due to growing adoption of connected vehicles. The use of vehicle tracking system reduces cost of administration and consumption, due to which the safety of vehicle and driver, and monitoring of real-time location is impacting the vehicle tracking system market positively.

Construction & Manufacturing segment is also expected to witness significant growth in the near future and this is owing to the many factors such as monitoring engine runtime, accurate budgets, field service management, location stolen equipment, monitoring PTO events and others.   

Based on Technology, the market is segmented into GPS/Satellite, GPRS/Cellular Networks, and Dual Mode. Out of which, GPS/Satellite is expected to dominate the global market over the forecast period and this is attributed to the various factors, like its ability to work with different technologies such as GSM, LTE, and WiMAX and it can be publicized with many satellites. Thus, due to the better productivity and chart of GPS/Satellite, their adoption is high among several applications, which is driving growth of this segment.

Dual-mode segment is also expected to witness significant growth in the near future and this is owing to the presence of many companies offering both GPS and GPRS-based vehicle tracking systems. Calamp Corp. for instance, offers both GPS and Cellular-based devices. The dual-mode devices can be installed easily, are inexpensive, and are the reliable links between the tracking devices and application servers. Due to this, the demand for dual-mode vehicle tracking system technology is increasing, which is further likely to boost the market growth.

Based on Type, the market is segmented into Active, Passive. Out of which, Active is expected to dominate the global market over the forecast period and this is attributed to the ability of active tracking systems to track real-time data through cellular and satellite networks. Moreover, despite the complexity of the system, it offers enhanced benefits compared to the counterpart of this system.

Passive segment is also expected to witness significant growth in the near future and this is owing to the factors such as no requirement for monthly subscription, easy to operate and easy functionality of passive vehicle tracking systems. These systems are still being used widely, despite the lack of provision of real-time location. The passive systems collect vehicle data and store it on a hard drive or a memory card, and this data can be accessed later on when these devices are connected to a tablet or a computer.

Based on Component, the market is segmented into Software (Performance Measurement, Vehicle Diagnostics, Fleet Analytics and Reporting, Driver Behavior Monitoring, and Others), Hardware, (OBD Device/tracker & advance tracker, Standalone Tracker). Out of which, Software is expected to dominate the global market over the forecast period and this is attributed to the increasing adoption of software-based systems for vehicle tracking, in which, the systems is installed directly on the user’s machine, which further eliminates the need for hardware. Moreover, the use of software also provider various other benefits, and these factor in turn are driving growth of this segment.

Hardware segment is also expected to witness significant growth in the near future and this is owing to the features of hardware components such as, sleep mode on low power, buzzer support, and effective GPS and cellular performance.

Global Vehicle Tracking System Market: Key Developments

In March 2021, Geotab Inc. and Lion Electric entered into collaboration, for powering the advanced electric vehicle telematics system of Lion, LionBeat. This telematics systems optimizes the operations of heavy-duty, zero emission vehicles of Lion Electric.

In March 2020, Cartrack, introduced a mobile app, Karu Safety to provide emergency security assistance. Its customer can use private security service by only touching a button and can ensure fast and reliable safety support.

In December 2020, TomTom International B.V.’s complete stack of navigation components was chosen by Mitsubishi Motors for powering the infotainment systems of the Eclipse Cross, its new SUV.

In March 2021, Tracker, the subsidiary of CalAmp entered into partnership with Stoneacre Motor Group. With this partnership, the companies will focus on protecting customers from the growing risks of keyless vehicle theft.

Global Vehicle Tracking System Market: Key Companies Insights

The global vehicle tracking system market is highly competitive. This is attributed to continuous launch of new technologies due to ongoing R &D and efforts by value chain participants. Moreover, key players are adopting various business growth strategies in order to expand their presence on regional as well as global basis.

Some of the key players in the global vehicle tracking system market are Trackimo  Inc., Verizon, Laipac  Technology  Inc., Geotab   Inc., Xirgo Technologies,  Llc., Cartrack, Orbcomm  Inc., Tomtom  International  B.V., Teltonika, and Calamp.

*Definition: A Vehicle Tracking System is an automated tracking solution that enables fleet management. It consists of a telematics device installed in a car or truck, communicating with a GPS satellite network. It collects and sends information about the vehicle's location, speed, and other data points.