Proving the Business Case for the Internet of Things

Government initiatives, cost concerns to drive telematics take-up in China: Frost & Sullivan

Iain Morris
December 3, 2014

While telematics has been slow to take off in the Chinese market because of high prices, government initiatives combined with the fuel efficiency features of telematics are now proving to be a strong pull for commercial vehicle operators in the country, according to the latest research from Frost & Sullivan.

As a result of surging interest in the technology, spending by commercial vehicle and fleet operators on telematics will soar over the next seven years, says the company.
Chinese government initiatives include mandating the installation of satellite positioning and telematics systems in specific commercial vehicles.

Moreover, the fuel efficiency of China’s commercial vehicles is lower than that of trucks in OECD countries – leading organizations to adopt fleet management solutions to lower costs.

“Apart from the high prices of telematics, which are often equivalent to a small fleet operator’s profits, the varied polices of local governments on commercial vehicles also peg back adoption rates,” said Will Wong, an automotive and transportation analyst with Frost & Sullivan. “While changes in the regulatory framework are unlikely, varied local governments’ requirements will be a long-term challenge as they complicate the business of fleets.”

At the moment, the Chinese government is focusing efforts regarding the installation of telematics technology on tourist buses, coaches, dangerous goods vehicles, tractor units and heavy duty trucks.

All those vehicles are required to have factory-installed satellite positioning equipment and telematics control units while entering certain provinces.

Frost & Sullivan says the need to improve the monitoring and management of these types of vehicles presents a huge opportunity for telematics suppliers in the commercial vehicle market.

“The market will open up for telematics providers that have the flexibility to offer customized solutions,” said Wong. “In a market marked by cost consciousness, meeting the budgets of various scales of fleet operators is vital for success.”
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