One of the most interesting applications for embedded M2M technologies is with commercial vehicle fleets. Fleet Management is about improving commercial fleet vehicle operations. New mobile technology applications are an example of practical uses for concepts that are known as the Internet of Things.
Intelligent fleet management solutions based on proven wireless technologies -- such as GPS-based telematics -- are helping fleet operators to enhance their efficiency in terms of improving vehicle performance and fuel mileage, enhancing reliability or safety, scheduled maintenance planning and optimizing delivery routes.
The growing competitiveness among the transportation service providers, CO2 emission control norms, and rising fuel prices are making Fleet Management Systems an essential component for the business operation of the fleet vehicle operators. The overall Fleet Management market is expected to grow from $10.91 billion in 2013 to $30.45 billion by 2018 -- that's at a Compound Annual Growth Rate (CAGR) of 22.8% from 2013 to 2018.
According to the latest market study by Berg Insight, the number of active fleet management systems deployed in commercial vehicle fleets in North America was 4 million in the fourth quarter (Q4) of 2013.
Growing at a compound annual growth rate (CAGR) of 15.3 percent, this installed base of systems is expected to reach 8.1 million by 2018.
In Latin America, the number of active fleet management systems is expected to increase from 1.9 million in Q4-2013, growing at a CAGR of 16.1 percent to reach 3.9 million in 2018.
Berg Insight believes that the top ten providers of fleet management systems in the Americas now have a combined installed base of more than 2.5 million active units within the region.
Leading solution providers now have more than 300,000 active units in this market. The consolidation trend in the fleet management industry has continued and the market has seen a number of major transactions in recent years.
Qualcomm has divested its Omnitracs business which pioneered the fleet management industry in the 1980s. Omnitracs has since then acquired other solution providers – most notably the competing heavy truck fleet management provider XRS with more than 100,000 subscribers.
The global fuel card and workforce payment provider, FleetCor, has acquired NexTraq that's based in the U.S. market, while the tire manufacturer Michelin has acquired the leading Brazilian fleet management provider Sascar.
"These two deals are particularly interesting due to the fact that the well-known acquirers are newcomers to the fleet management space," said Rickard Andersson, senior analyst at Berg Insight.
Both FleetCor and Michelin decided to enter this market after having identified relevant synergies between its traditional product portfolios and fleet management solutions. The fleet management industry still remains overcrowded as there are hundreds of solution providers in the Americas alone.
Numerous additional mergers and acquisitions are thus expected in this industry in the upcoming years. Berg Insight anticipates a future scenario where the global fleet management market is dominated by a handful of providers with installed bases measured in the millions.