Editor's Blog Section

From Opinion column issue 41 – June-July 2009

The failure of the former GlobalLive and losses reported at Minorplanet have sent shivers through the UK telematics sector.

Clearly suppliers are struggling, though Minorplanet has come out with a strongly positive message about its own prospects. But if others should fail, the rational view will be that the market is simply adjusting to economic conditions, and there is bound to be fall-out. The economy is still fragile – UK truck registrations for the year to June are down 49 per cent, and those for vans are down 40 per cent.

However, one company’s struggle is another’s opportunity. Causeway has had enough confidence in the future of the market to acquire GlobalLive’s assets and keep the brand alive, and other suppliers are also reported to be on the acquisition trail.

The fact is that telematics sector still has considerable growth potential. A report by analysts Frost & Sullivan predicts the global market will double in the next six years. Its view is based on the unarguable fact that investment in commercial vehicles telematics pays off by helping fleet operators boost productivity and reduce costs.

Frost says telematics suppliers must offer the right mix of product and service to reduce the cost of ownership and improve the rate of return on investment. Certainly they are continuing to invest in their products, as is evident in the trailer-tracking feature in this issue.

Their current focus on the fuel-saving benefits is a classic case of a demonstrable ROI: benefits translate into bottom-line cash savings, which look good in any accounts report.

Then there’s the green dividend. Transforming the UK into a low-carbon economy is one of the Government’s key policies. Road transport is said to account for 30 per cent of carbon emissions, so telematics are going to play a major role in reducing that impact – both directly, through reduced mileage and better vehicle fuel economy, and indirectly, through use of telematics to improve journey times and avoid congestion hotspots.

Telematics suppliers with the staying power nerve to ride out the current crisis will reap significant rewards, and so will vehicle operators wise enough to take full advantage of what they can offer.