Market Overview
The Global Vehicle Tracking System Market size was valued at USD 21.94 billion in 2022 and is estimated to reach USD 66.96 billion by 2031, with a CAGR of 13.2 % during the forecast period 2023–2031.
A vehicle tracking system monitors and tracks the activity of vehicles using cellular networks or global positioning satellites (GPS). Remote vehicle tracking and monitoring, vehicle maintenance, vehicle diagnosis, fuel management, route optimization, driver management, and safety management are all part of the package. The GPS, GSM/GPRS, digital maps, and specialized software in vehicle tracking systems form a closed loop.
A tracking module continuously collects GPS coordinates that indicate the vehicle's current location. The coordinates are instantly transmitted to the users' computers using cellular data service. Customers can view their vehicles on road maps by logging into the software, similar to in-dash and handheld GPS-based navigation systems. The location function of a vehicle tracking system is a fundamental and extensive application. In addition to vehicle tracking, a vehicle tracking system has fleet management applications such as vehicle security, maintenance, fleet visibility, fuel management, asset tracking, insurance cost reduction, transit tracking, weather updates, and traffic updates.
Market Dynamics
What factors drives the global vehicle tracking system market?
Vehicle tracking systems provide significant benefits such as increased operational efficiency, vehicle monitoring, vehicle maintenance, driver tracking, cost savings, and safety and security, which drives global demand for the industry. As a result of expanding government policies to increase emission-free transportation options, the growing popularity of battery-powered vehicles around the world is increasing the demand for electric vehicles among the general population. Furthermore, the growing adoption of 5G technologies, the expanding ICT industry, and the growing use of mobility-as-a-service drive the vehicle tracking systems market trend. Furthermore, the increasing popularity of self-driving cars among high-end customers is expected to increase demand for vehicle tracking systems. As a result, increased demand for current rechargeable and self-driving vehicles will drive the global vehicle tracking systems market size during the forecast period.
The growing demand for fleet telematics solutions in logistics and transportation also propels the global vehicle tracking system market forward. Several government organizations have issued regulations governing the installation of tracking systems in both passenger and commercial vehicles, with the safety of drivers and passengers in mind. Furthermore, as car rental and leasing services become more popular in developing countries, rental companies are encouraged to install trackers in their fleets. Furthermore, for accurate results, cellular vehicle-to-everything (C-V2X) and autonomous vehicle technologies rely heavily on global positioning system (GPS)-based location trackers. Such factors are propelling the global adoption of vehicle tracking systems.
What are the restraints for the global vehicle tracking system market?
Environmental factors frequently lead to ambiguous communication, which leads to a poor user experience. As a result, the adoption of vehicle tracking systems is limited, hampering the market growth. These systems use GPS to track the location and route of the vehicle. Furthermore, a direct line of sight between the satellite and the receiver is required. An object in the direct path can diverge the GPS signal and cause a poor connection. GPS signals can be weakened by various environmental factors, including steep hillsides, dense trees, tall buildings, and even heavy cloud coverage. As a result of geographical limitations, these devices frequently produce delayed results. This factor, to some extent, limits the growth of the vehicle tracking system market.
What are the future opportunities for the global vehicle tracking system market?
Global demand for automobile monitoring systems is being driven by the expansion of the goods and passenger transportation business, which ride-hailing companies, car rental companies, and the adoption of app-based transportation services are leading. Trackers can provide fleet managers with information on the vehicle's current operating state, such as speed, door lock and unlock, and other engine metrics, allowing them to track the vehicle. Vehicle tracking systems are becoming increasingly important for transportation companies as car rental agencies grow worldwide. Booking apps make renting a car more accessible to the general public. These apps make car rental costs visible to the public and include features such as price comparison, vehicle type selection, and passenger limit.
Regional Analysis
The global market for Vehicle Tracking Systems has been segmented based on geography into North America, Europe, Asia Pacific, and LAMEA.
In 2021, North America accounted for the largest market share at 32.4% and was anticipated to maintain its growth rate throughout the forecast period. The emergence of intelligent systems has resulted in the adoption of fleet management technologies. Moreover, rising concerns about carbon emissions and a growing awareness of vehicle fleet and cargo technology influence the market. The government's mandatory safety standards are also driving market expansion.
Asia-Pacific is anticipated to grow at a CAGR of 17.4% over the forecast period. The market's growth is driven by technological advancements in networking, a surge in the sales of commercial and passenger vehicles, stringent government regulations, the increasing popularity of the e-commerce sector in the region, and expanding trade activities. In addition, the increasing acceptance of technologies such as the cloud, IoT, connected cars, and autonomous vehicles in the region is driving market expansion.
During the forecast period, the European vehicle tracking device market is expected to grow at a significant CAGR. The growth in this region is primarily due to the government's increased investment in advanced technologies to improve public transportation. For example, in May 2016, the UK government's Crown Commercial Service and Trading Fund signed a vehicle telematics agreement to develop smart transportation. This initiative would aid in improving on-road safety and efficiency and monitoring and tracking fuel consumption, vehicle tracking, and driver behavior. This agreement was completed in collaboration with various organizations, including healthcare, law enforcement, central and local government transportation, and a wide range of small and medium-sized businesses.
Segmental Analysis
The global market for Vehicle Tracking Systems is categorized by Vehicle type, End-use, Technology type, Type, and Component.
Based on Vehicle type, the market is divided into Passenger Vehicles, Heavy Commercial Vehicles, and Light Commercial Vehicles.
In 2021, the passenger vehicle segment held a market share of over 42%. The segment is also anticipated to have the highest CAGR over the forecast period, at 16.9%. Using a tracking system by app-based transportation car leasing and renting businesses like Ola; Uber; Careem; and Lyft, Inc. for efficient operational control drive the segment's growth. The tracking system enables businesses to collect information such as average speed and distance traveled, number of rides per day, and idle time to increase operational efficiency and profitability.
The segment of light commercial vehicles is projected to have the second-highest CAGR during the forecast period, at 12.5%. Increased domestic and international logistical shipments via road transport are anticipated to contribute to this growth. The commercial vehicles used for delivery, trading, and courier services are anticipated to further boost the demand for tracking systems. Transporting high-value assets such as industrial machinery, defense ammunition, and ammunition is facilitated by the tracking system. The relevant party can track the vehicle to ensure on-time delivery and safety.
Based on End-use, the market is segmented into Transportation & Logistics, Construction & Manufacturing, Aviation, Retail, Government & Defense, and Others.
The transportation and logistics sector held the largest market share in 2021, at 26.4%, and is projected to record the highest CAGR between 2022 and 2031, at over 17.2 %. This is a result of the growing fleet size and fleet operators. The global application of global positioning system tracking for logistics and transportation has increased.
The vehicle tracking system provides benefits such as fleet management, ensuring the safety of the driver and the cargo, increasing efficiency due to real-time traffic alerts and accurate route planning, monitoring fuel levels, distance traveled, and vehicle speed, and controlling administrative costs. The system's benefits have a positive influence on the expansion of the market.
The retail segment is anticipated to achieve the second-highest CAGR over the forecast period, at 14.1%. The increasing influence and reliance on e-commerce have prompted retailers to expand their delivery services and fleets based on the delivery region parameter. The tracking system is utilized by e-commerce delivery companies to collect data to create delivery timelines, optimize operation costs, and increase productivity.
Based on Technology type, the market is segmented into GPS/Satellite, GPRS/Cellular Network, and Dual Mode.
In 2021, the GPS/satellite segment held the largest market share, surpassing 49%, and is anticipated to record the highest CAGR of 15.7% over the forecast period. The expansion can be attributed to increased sales of commercial vehicles and the adoption of cloud technology and IoT in the healthcare, automotive, logistics, and defense industries. GPS's compatibility with network technologies, including WiMAX, GSM, and LTE. Moreover, the evolution of the GS tracker's size, which has resulted in increased battery life, functionality, and durability, is also driving the market's expansion.
The market is segmented by technology type into GPS/satellite, GPRS/cellular network, and dual-mode. The dual-mode segment is projected to expand at a CAGR of 12.6% during the forecast period. The dual-mode application provides GPS and GPRS-based tracking methods. The dual-mode technology is inexpensive, simple to install, and creates a dependable connection between the server and the vehicle tracking device. This factor is anticipated to contribute to the segment's growth during the forecast period.
Based on Type, the market is segmented into Active and passive.
The active type segment dominated the market in 2021, accounting for 83.8% of total revenue, and is expected to grow at the fastest rate of 14.6% by 2030. The functionality of active and passive vehicle tracking systems is the same. On the other hand, the active system monitors real-time data transferred to a computer system or a data analysis center via satellite or cellular networks. The active tracking system performs all functions but has the advantage of providing easy access to tracking data and compatibility with various networks. The benefits of an active tracking system are expected to drive up demand in major market regions.
During the forecast period, the passive type segment is expected to grow at a CAGR of 9.4%. The data collected by passive vehicle tracking devices is recorded and stored on a memory card or a hard drive. After some time has passed, the data can be downloaded using the auto-download feature, which sends vehicle data to the computer system. The system operates independently of the cellular network and is inexpensive to use.
Based on Components, the market is segmented into Hardware and Software.
In 2021, the software segment had the highest revenue share of 66.6% and the highest CAGR of 14.5% over the forecast period. Tracking software includes features such as fleet analytics, real-time alerts for traffic and maintenance, vehicle diagnostics, driver behavior monitoring, and measuring vehicle utilization, which indicates vehicle efficiency and total cost of vehicle ownership and is driving significant growth. End users have access to data that they can review and analyze, making it easier to maintain operational synergy, improve performance, monitor employee behavior, and reduce management costs.
