What do we know about fleet management in India and the development of vehicle and insurance telematics in India? We might argue that we do not know much – but this might soon change! This topic will be discussed in depth at the Telematics for India and South Asia 2013 conference in April.
We would like to share some information from Shreya Ganapathy, Project Director for this Conference:
India a high-reward, high-risk telematics market
Stepping onto a road in India is an invitation to mayhem. There are cars and trucks, cows and goats, taxis and rickshaws. Some are headed in the same direction; others form a dizzying web of eddies and offshoots that lead to accidents, traffic jams, and a general disregard for lane dividers, traffic lights and stop signs.
This is a world, in one respect, primed for telematics. The ability to navigate from point A to B and avoid traffic jams, locate local businesses, save fuel and connect with people should all have high appeal. And yet cultural differences, a sensitivity to price, and an infrastructure in flux present challenges.
As a result, India falls on both ends of the telematics spectrum—a place to target and a place to avoid. Location-based products and services in India are growing at a rate faster than most markets around the world. The car market has exhibited steady growth in recent years, with India now producing more than two million passenger vehicles a year. That puts it in the top 10 of largest car producers in the world, and places it fourth for Asian auto exporters.
On the flip side, the country is still hampered by a lack of infrastructure and digital content. Many places are off the grid when it comes to digital maps, and local authorities are disconnected, making some services difficult or impossible to supply. Back in 2004, Frost and Sullivan forecast the passenger vehicle telematics market to grow from $6.4 million in 2004 to $80 million by 2011.
Current forecasts are more modest, with the passenger vehicle telematics market hovering around $40 million by 2013. “It’s a difficult market to predict,” says Jayendra Parikh, head of the advanced engineering group at Ashok Leyland. “It’s always changing, arguably as fast as anywhere in the world, which can offer rewards but also high risk.”
Fleet telematics takes centre stage
The market for fleet-based telematics is the most steady of any telematics market in India. The market is still fledgling—Parikh estimates that 15 to 20 percent of fleets utilize telematics—but increasingly fleet managers are expressing interest in productivity tools to improve management, which has led to an increased interest in telematics solutions.
Taxi operators are becoming more accustomed to monitoring and routing applications, while fleet managers are warming to features like geofencing to geographically track where vehicles are and when and if drivers are going out of bounds and products that can highlight driver behavior like speeding, overloading, and harsh breaking. “It all boils down to how efficient your fleet can be,” says Parikh.
Ashok Leyland is the second largest commercial vehicle producer in India. Parikh says that in addition to geofencing, fuel conservation is a second focus—known here as monitoring ‘kilometers per liter’—and ‘track and trace’ a third and perhaps the most coveted of the bunch. Fleet owners want the ability to track and trace where a vehicle and its packages are or have been so that they can better meet delivery time lines.
Despite increasing adoption, the fleet market still faces challenges. Chief among them is the fragmentation of fleets in India. Unlike in the West, where legions of trucks trundle along under the banner of a few main carriers, in India most fleets are small, with transport businesses often defined by a handful of trucks or individual truck owners. Seventy percent of commercial vehicle owners claim fewer than 20 vehicles in their fleets.
A second deterrent is cost, as the price of telematics solutions is still comparatively high compared to the basic cost of a commercial vehicle. As a result, providers must pursue niche markets with small margins, or OEMs must build in telematics solutions as optional add-ons.
Consumers leading the way
The market for built-in and aftermarket telematics services continues to underperform in India. This is due in part to difficulties on the supply side and to lack of demand.
On the supply side, offering mapping and safety services is more difficult in India than it is in most parts of the developed world. Due to the rapid growth of population and the burgeoning middle class, infrastructure is constantly on the rise in India with.
Furthermore, safety and security services are plagued by local entities that are difficult to interconnect. Police, hospitals and 911 services vary by district, and even on the local level there’s often a lack of linkages between different agencies, which makes providing an OnStar-like service difficult in India. China presents the same challenge: Different provinces often have different regulations and emergency call numbers.
Educating the consumers
Even if companies were able to overcome these hurdles, the general Indian population hasn’t shown signs that it would be particularly interested in the resulting solutions. Amongst the wealthy, many in India pay for chauffeurs, lessening the need for navigation services.
Professional drivers aside, it’s a cultural norm to roll down a window and ask for directions. And with the proliferation of cell phones in Indian society, it’s easy enough to search a mobile platform if a navigation question arises. Currently, more than 900 million of India’s 1.2 billion citizens are mobile phone subscribers.
As a result, personal navigation devices are very much a niche product in India. The SatGuide PND from SatNav, MapmyIndia Navigator from MapmyIndia, and TomTom and Garmin offerings control much of the market share, scant as they may be compared to other emerging and developed markets.
Likewise, most large OEMs with a presence in India—GM, Ford, Hyundai, Honda, Skoda—offer an option for navigation and in-dash systems with Bluetooth connectivity in their mid- to high-range vehicles.
But unlike in nearby China, where GM has launched a massive campaign with 500,000 customers subscribing to OnStar China, and where competitors have followed suit with telematics services of their own (like G-Book from Toyota, Star Wings from Nissan, and D-Partner from InkaNet), India’s market is bereft of mainstream infotainment and telematics platforms.
Making the most of the mobile market
With a cell phone penetration rate close to 100 percent (and exceeding 100 percent in urban centers like Mumbai), mobile platforms offer the best opportunity for delivering telematics services to the Indian market. After all, the tepid demand for telematics services in India today doesn’t translate to indifference among average Indians toward connected services.
On the contrary, India represents the world’s second largest mobile phone market and the world’s third largest mass of Internet users. Rates for data and talk time are the cheapest in the world, further stoking mobile use.
Unlike in China, where official mandates prohibit use of services like Facebook and Twitter, in India use is widespread. 3G communications has grown rapidly in the past several years. Music is a major draw on phones, as most cell phones come equipped with FM receivers.
The path forward for offering connected services in the vehicle is therefore likely through solutions that link phones to dashboards. Drivers want to be able to turn their vehicles into radios based on their phones. They also want to be able to use Twitter and Facebook and leverage location-based services. It’s simply a matter of figuring out the price points to enable this integration.
Learn more on Telematics Opportunities in India and South Asia and the deployment strategies:
During independent research for the Telematics India & South Asia Conference we identified several topics crucial to the Indian market, including:
- See how the market is moving from security needs towards navigation and other connected infotainment services to plan an up-to-date business strategy
- Get an update how Europe and the US are utilizing infotainment systems, such as traffic management systems and real time information to entice new and existing customers
- Analyse ways in which to reduce big brother effect on fleet drivers. Motivate local drivers of the benefits of driver profiling to their own safety as well as with better pay for better driving.