Market Challenges And Opportunities

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 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.