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  • Pune, August 18, 2017

    Telematics in India: Trends and Opportunities Presentation

  • 2 20170818_Telematics_India2017_v01.pptx

    Agenda

    Telematics: An overview Brief overview of what is telematics and its significance in various sectors including automotive

    1

    Telematics market: Global and India Global market overview, India market overview including market characteristics, market structure and drivers

    2

    Trends and opportunities in India Key trends and characteristics of telematics ecosystem, potential opportunities for Indian players

    3

  • 3 20170818_Telematics_India2017_v01.pptx

    Telematics is widely recognized as a game changer in many industries

    TELEMATICS

    HEALTH: Control of biological parameters (voltage, weight, heart rate ...) facilitating hospitalization or home health monitoring

    SPORT: Management of trainings, efforts & performances of top athletes & amateurs

    TELESURVEILLANCE: Detection systems to trigger an intervention in case of intrusion into premises or a remote immobilization for stolen vehicles

    TRANSPORT AND LOGISTICS: Fleet management, visualization in real time of the progress of deliveries and anticipation of technical controls

    AUTOMATIC DISTRIBUTION: Anticipation of shortages and maintenance plans, collection of data on consumption habits to adjust assortments and prices

    OFFICE AUTOMATION AND INDUSTRY: Monitoring of proper functioning of equipment (e.g. air conditioners, elevators, conveyor belt) and information on supply needs or preventive visits (e.g. copiers, printers)

    TRADE: Economical and flexible solution for fast cash credit card payments

    ENERGY: Real-time monitoring of transport networks in order to detect leaks and control flows, immediate collection of actual consumption to ensure more accurate and flexible billings (e.g. water, gas and electricity)

    ENVIRONMENT AND COMMUNITIES: Control of facilities, remote management (e.g. traffic lights, timestamps, public lighting) and emergency matters (e.g. flood management, pollution control, telesurveillance)

    Telematics contraction of telecommunication informatics - represent a real breakthrough as it enables not only to receive data but also to store and send it

    By 2020, it is estimated that there will be 24 bn "connected objects" aside of 12 bn mobile connected devices

    Source: GSMA, Press, Roland Berger analysis

    Telematics An overview

  • 4 20170818_Telematics_India2017_v01.pptx

    In automotive sector, telematics equipment offers a wide variety of features to help make the vehicle smarter

    Telematics:

    Telecommunications + Informatics

    Proactive maintenance

    Driver behavior

    Journey analysis

    Vehicle tracking

    GPS and navigation

    Accident recording

    Accident notification

    Vehicle theft tracking

    Fuel management

    Intra-fleet benchmarks

    Vehicle diagnostics

    Vehicle logbook

    Mileage reporting

    Internet connectivity

    Services facilitated by telematics equipment in automotive industry

    Source: Secondary research, Roland Berger

    Telematics An overview

  • 5 20170818_Telematics_India2017_v01.pptx

    Globally, the vehicle telematics market is valued at USD 39 bn in 2016 and is dominated by telematics for commercial vehicles

    Global vehicle telematics market revenue, 2014 2022 [USD bn]

    61%

    Passenger vehicle

    Commercial vehicle

    38% 39%

    62%

    75

    2021F 2016 2015 2019F

    64

    55

    39

    +17%

    2020F

    46

    2018F

    88

    2017F

    103

    2022F 2014

    28 33

    40%

    60%

    61%

    39%

    63%

    34%

    65% 64%

    32%

    68%

    35%

    66%

    36% 37%

    > Global vehicle telematics market is

    valued at ~USD 39 bn is 2016, it is

    expected to grow at CAGR 17% to

    USD 103 bn in 2022

    > Global telematics market is

    dominated by commercial vehicles

    which account for nearly two thirds

    of the total share

    > In the passenger vehicle segment,

    demand is driven by significant

    usage in cab services and

    increased penetration in medium

    and high end passenger vehicles

    such as Volkswagen, BMW, Audi

    etc.

    Global vehicle telematics market: Overview

    Global telematics market

    Source: Secondary research, Roland Berger

    CAGR [%]

    2017-22

    16%

    20%

    added CV/PV slit and CAGR

  • 6 20170818_Telematics_India2017_v01.pptx

    EMEA dominates the global CV telematics market with a 38% share; APAC is expected to be the leading contributor by 2022

    Global telematics market Commercial vehicles

    Global CV telematics market revenue, 2014 2022 [USD bn]

    62

    53

    46

    4034

    3025

    2219

    2016 2014 2015 2020F 2017F 2018F 2019F 2021F 2022F

    +16%

    Revenue share by region, 2015 [%]

    Americas

    26%

    36%

    EMEA 38%

    APAC

    > CV telematics finds applications in various fields such as passenger safety and security, customer relationship management, business

    services such as fleet management and tracking as well as private services such as navigation support to passengers

    > EMEA accounts for the greatest share of the market regulatory initiatives such as eCall Driver Safety project is a key driver

    > APAC is the second largest market driven by countries such as China, Japan, India etc. By 2022, APAC is expected to be the leading

    contributor to global commercial vehicles telematics market

    Global commercial vehicle telematics market: Overview

    Source: Secondary research, Roland Berger

  • 7 20170818_Telematics_India2017_v01.pptx

    Key driver behind growth in CV telematics enables a greater value chain coverage.

    Cov

    erag

    e

    Transportation value chain

    High

    Low

    New vehicle

    sales

    Fleet mgmt. Service/

    repair

    Spare part

    sales

    Rental Financial

    services

    Fleet/vehicle

    operation

    Coverage 2013 Coverage 2030

    > Connectivity based solutions enable OEMs to understand their customers' needs and address them with tailored product and service offerings OEMs need to strengthen

    their aftersales business Increased customer retention required

    Moreover OEMs are requested to serve growing customer demand Extended support and user-specific products and services (e.g. remote diagnostics)

    Enabler connectivity

    Importance of truck connectivity

    Profit pool coverage Connectivity solutions

    Source: Roland Berger

    Remote diagnostics

    Load detection/ monitoring Performance analysis

    Order management

    Tacho management

    Connectivity solutions

    Global telematics market Commercial vehicles

  • 8 20170818_Telematics_India2017_v01.pptx

    8

    and enables OEMs to differentiate themselves and capture opportunities beyond vehicle sales

    Truck OEM engagement/core business 2013 2030

    > There is a higher engagement of OEMs along the value chain who are expected to market themselves as full-service providers

    > Logistics providers will require extended services and tailored solutions such as fleet/vehicle operation models

    > Logistics companies will focus on business contracting and operation of core routes maintaining capacity/cost flexibility when contracting new business or facing demand volatility and business risks

    100%

    0%

    Fleet/vehicle operation

    Transportation business

    New vehicles ("Iron & steel")

    Financial services

    Spare part sales

    Fleet management

    > Route execution

    > Driver lease

    > Vehicle lease

    Transportation value chain

    OEM engagement/ core business

    Source: Roland Berger

    OEM engagement along the transportation value chain Outlook 2030

    Rental

    Service/repair

    Global telematics market Commercial vehicles

  • 9 20170818_Telematics_India2017_v01.pptx

    In India, the commercial vehicle telematics market is valued at USD 113 m in 2016 and expected to grow at CAGR 21% in 2017-22

    India commercial vehicle telematics market revenue, 2014 2022 [USD m]

    378

    320

    269

    224

    180

    144

    11390

    72

    2021F 2016 2015 2019F

    +21%

    2020F 2018F 2017F 2022F 2014

    > The Indian commercial vehicle

    telematics market constitutes 0.45% of

    the global commercial vehicle

    telematics market

    > Market is expected to grow at CAGR

    21% during 2017-22, driven by:

    Demand for cargo and vehicle

    safety - increasing incidents of

    large scale highway truck theft for

    cargo and truck high-jacking

    necessitates need for remote

    monitoring

    Transit losses - transit losses

    account for 10% of logistics cost in

    India on top of fuel pilferage which

    is also very common

    Evolving business models for

    professionalized cargo

    transportation (3PL, 4PL players)

    Policy support by government for

    preventing accidents (monitoring

    speed, driving pattern, etc.)

    India commercial vehicle telematics market: Overview

    Source: Secondary research, Roland Berger

    Telematics market in India

    added slide

  • 10 20170818_Telematics_India2017_v01.pptx

    CV telematics installed base in India is expected to grow at

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