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SA's fleet telematics firms eye massive gains

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The number of fleet management systems in SA reached 1.3 million in Q4 2017, says Berg Insight.
The number of fleet management systems in SA reached 1.3 million in Q4 2017, says Berg Insight.

The number of active fleet management systems deployed in commercial vehicle fleets in SA is expected to reach 2.5 million by 2022, growing at a compound annual growth rate of 14%.

This is according to a new research report from the Internet of things analyst firm Berg Insight, which notes the number of fleet management systems reached 1.3 million in Q4 2017.

Berg Insight notes SA is a relatively mature telematics market and the penetration is comparably high from an international perspective.

Far from all deployments are, however, full-scale advanced fleet management solutions, the firm says.

It points out that a notable share of the installed fleet telematics systems on the South African market is represented by comparably low-end tracking systems; for example, light fleet management solutions, including stolen vehicle recovery systems extended with basic fleet management features.

According to the analyst firm, the South African fleet management market is clearly dominated by five domestic players with broad telematics portfolios, which together account for as much as two-thirds of the total number of fleet management systems in use in the country.

"Berg Insight ranks Cartrack and MiX Telematics as the largest providers of fleet management solutions in South Africa, both having estimated installed bases of more than 200 000 active units in the country," says Rickard Andersson, principal analyst at Berg Insight.

Earlier this month, Cartrack reported accelerating interim subscriber and revenue growth, with the South African operations showing a particularly good performance.

The JSE-listed Cartrack grew its overall subscriber base by 28% to 849 772, an acceleration of the already robust compound growth rate in subscribers over the past six years of 21% per annum.

On the day Cartrack announced its results, rival MiX Telematics also reported strong interim growth, with group subscription revenue increasing 18.4% year-on-year, to R811 million.

Andersson notes the second runner-up is Tracker which, in addition to its in-house-developed solutions, also markets fleet management systems powered by TomTom Telematics.

"The remaining top five players are Netstar and Ctrack, which both have installed bases exceeding 100 000 units in South Africa," says Andersson.

Altron subsidiary Netstar last month reported an 11% increase in revenue and 14% improvement in EBITDA, with improved growth in its subscriber base, particularly in stolen vehicle recovery, with churn and retentions under close control.

Additional examples of domestic aftermarket players include Digit Vehicle Tracking (Digicell), GPS Tracking Solutions (Eqstra Fleet Management/enX Group), Autotrak and PFK Electronics, says Berg Insight.

In addition to TomTom Telematics, other international providers active in the market include Gurtam, Pointer Telocation and Geotab, it notes.

Berg Insight notes foreign telematics players have, however, generally not managed to achieve any top-ranking market shares in the South African fleet management market to date.

"Commercial vehicle OEMs [original equipment manufacturers] including Scania, Daimler, MAN and Volvo Group have moreover all introduced fleet telematics solutions in South Africa, though the adoption levels remain relatively modest so far," Andersson concludes.

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