Frost: Benefits of Japanese Commercial Vehicle Telematics to Drive Long Term Growth
January 10, 2007 // Published as a news service by IHS
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Specific advantages of commercial vehicle (CV) telematics, as compared to fleet management services (FMS), is likely to drive growth for telematics in the Japanese CV market in the long term.
New analysis from Frost & Sullivan of Japan's CV telematics market found earned revenues of $286.4M in 2005, with estimates to reach $478.8M in 2012.
Analysts said CV telematics faced considerable initial competition from FMS, which was popular among trucking companies. However, CV telematics has certain distinct advantages compared to FMS.
FMS entails a considerable investment in hardware, software and know-how on information technology (IT) applications.
CV telematics, on the other hand, can fit into any vehicle with a system-compatible computer and an Internet connection, and thus has a distinct cost advantage over FMS.
"The specific advantages of CV telematics over FMS is likely to trigger a considerable shift toward CV telematics in Japan for the next couple of years," said Frost & Sullivan industry manager V. Bhanu Prakash.
"The CV systems are likely to find acceptance among the medium-scale fleet operators and transportation companies, which may find the highly-priced FMS uneconomical."
Prakash said CV telematics' role in enhancing trucking efficiency will also drive growth in the market. The vehicle diagnostic reports generated by CV telematics service providers (TSPs) imparts several specific benefits, such as increased vehicle security, lower vehicle maintenance cost, increased fuel efficiency, increased driving safety and improved vehicle productivity.
"These benefits enhance the efficiency of trucking operations by minimizing breakdowns and delays and maximizing fuel efficiency," Prakash said.
The TSP also provides trucking companies with detailed vehicle diagnostics on the vehicle mileage fuel consumption and level of gaseous emissions, such as carbon dioxide, nitrogen oxide and particulate matter during CV operation.
Analysts said this information can be used by trucking companies to advise the CV drivers to change driving methods to minimize carbon dioxide emissions, which cause global warming.
"Minimizing environmental impact of CV operations has assumed increased importance with the Japanese government's green environment policy," Prakash said.
According to Frost & Sullivan, the environmental benefits of using CV telematics will be a high impact driver for CV telematics growth in Japan in the next few years.
Source: Frost & Sullivan.