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Volume IconWhat is telematics? What are its advantages?

Like aeroplanes, vehicles too have their own version of 'black box' which monitors driving habits, vehicle usage and distances covered. They are called telematics. Find out more about it here

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Telematics is a technology that combines telecommunications, informatics and wireless devices to send, receive and store data connected with vehicles. 

Telematics devices collect and transmit location using GPS and other vehicle-specific data through cellular networks or satellite communication to a centralised server.

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This data is processed and stored in a user-friendly format that can be accessed by fleet owners via websites and apps. 

The most common application of telematics is in the logistics and transportation industry, especially in commercial fleet vehicles.

The data captured using telematics devices can include location, speed, engine-idling, harsh braking or acceleration, fuel consumption, temperature and vehicle faults among other things.

This enables fleet owners to effectively monitor all their vehicles collectively and individually in real-time. 

Fleet management software can read this data to send alerts to fleet owners on performance issues, emergencies and critical events like route deviation or over speeding so that swift action can be taken. 

Vehicle maintenance can be improved and made predictable as sensors identify when to change oil, brake pads or batteries. 

Based on telematics data, fleet managers can also gain insights into driving habits and patterns which can in turn help them create training programmes to improve driver safety.

The technology can help boost productivity, save costs and thereby increase profitability for fleet owners.

Telematics also helps insurance companies underwrite premiums. Insurers can build a risk profile of the customer based on their usage of the car and charge premiums accordingly. Information on the average speeds at which a car is being driven, the distance covered on a daily or periodic basis and driving skills can support the insurer's decisions. 

According to a report by Fortune Business Insights, the global commercial telematics market size was $34.79 billion in 2020. The market is projected to grow from $40.18 billion in 2021 to $158.31 billion in 2028 at a compound annual growth rate CAGR) of 21.6% in the 2021-2028 period. 

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First Published: Feb 21 2022 | 8:45 AM IST

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