Telematics Markets in Japan and South Korea to Experience Double-Digit CAGR

• Posted: Wednesday, December 06, 2006
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• Author: pradhana
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• Filed under: Market Survey

A new ABI Research study forecasts that in 2011 the aggregate Japanese commercial telematics market will reach $267 million, up from a 2006 level of just over $120 million, amounting to a compound annual growth rate of 17%. In the same period, the South Korean market, an emerging opportunity for commercial telematics services, will show very strong growth, accounting for a high CAGR of between 38% to 41% in subscribers, hardware shipments, and market values.

With intense competition in the logistics environment, freight carriers in Japan and South Korea have faced a heavy workload in relation to vehicle allocation and the operational management of trucks.

According to Seoul-based ABI Research senior analyst Andy Bae, "Carriers have come to realize that fleet management systems allow them to achieve more efficient vehicle allocation and lower distribution costs. Increasingly, carriers are pursuing operational innovation through fleet management systems which they perceive as powerful tools to achieve a competitive edge."

Along with fleet management systems for freight trucks and construction vehicles, varied applications for commercial telematics, such as EMS (Emergency Medical Service), public transportation, rental cars and taxis, and municipal fleets, are emerging."

Market drivers in the region are lowered integration and implementation costs," notes Bae. "With the advent of GPS-enabled mobile phones, even small and medium enterprises in Japan and South Korea have comfortably adopted commercial vehicle telematics services including fleet management. The GPS-enabled phone will provide key momentum for commercial telematics services in the Japanese and Korean markets."

With location based services proliferating via the mobile handset, many South Korean service providers and manufacturers have integrated LBS applications for vehicle-centric services. Meanwhile, Japan's commercial telematics adoption has grown steadily under the Japanese government's ambitious ITS (Intelligent Transportation System) project.

"Compared with North America, Japan and South Korea lag behind in terms of market penetration and the range of applications," notes Bae. "However, ABI Research foresees that GPS enabled phones, along with carriers' desire for innovation and efficiency in their daily operations, will generate new momentum for commercial telematics services in both regions.

Source: ABI Research

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