The automobile is becoming more connected as consumers and governments start mandating safety and security features. Telematics were initially used by companies with large fleets of vehicles so they could keep track of their assets and the performance of their employees. As the technology started getting cheaper and the insurance industry applied the technology in consumer vehicles, people started noticing the benefits of using telematics. ABI Research (News - Alert) estimates that safety and security telematics will be part of factory-installed feature in 15.7 percent of new vehicles globally in 2013.

Telematics provides information that organizations can use to provide a specialized service for the driver. However, the industry is increasingly moving to safety and security solutions that can help drivers avoid emergencies. Insurance companies, for example, use the data to offer better rates for drivers who have shown a safer driving behavior. On the other hand, service companies can monitor the vehicle and make suggestions for maintenance related problems that could help avoid accidents or breakdowns.

The biggest driving force for this growth is the mandate countries around the world are making of manufacturers. This type of technology saves municipalities millions of dollars in asset recovery, rapid and accurate medical emergency response, better usage of human resources in emergency situations and traffic integration in future smart city applications.

Municipalities are pushing for telematics because of the explosive population growth of cities around the world. With more people and vehicles, smart cities that have the ability to keep track of all the vehicles will make the city more efficient. The telematics in these new vehicles gives governments the tools they need to coordinate their efforts with private service providers to ensure a safe environment for all drivers. These mega-cities will start implementing many rules related to vehicle ownership and driving to reduce traffic and environmental damage. Mandatory telematics implementation will give governments access to vehicles at all times to ensure they are complying with regulations.

Car manufacturers also see telematics as a tool to engage with their customers. Social media platforms have taught companies that consumers like to engage with the makers of the products they purchase. This interaction gives businesses information to improve the product and increase long-term customer retention. Manufacturers see telematics as a Customer Relationship Management (CRM) tool that can improve the ownership experience for both parties. Tools that perform remote diagnostic, maintenance recommendations and updates or upgrades to software related functions for the vehicle builds loyalty and appreciations for the vehicle.

The research sees a future in which the connected vehicle comes from the manufacturer with the right set of tools to connect with the services the consumer needs. Cooperation across the whole value chain will be essential because each segment will be reliant on the information gathered by the vehicle and the consumer driving the vehicle.

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