Home FleetWatch 2016 Telematics on the move Cartrack launches in the USA

Cartrack launches in the USA

One of the many thousands of rigs plying the roads around America. Cartrack has just entered the USA market with a range of products aimed at adding value to local operators. The USA market is in a huge growth phase in terms of telematics.

Cartrack, a global provider of fleet management, stolen vehicle recovery and insurance telematics services, is making headlines of late with the latest news that the company has started operations in the United States (US). The company’s operational base will be situated in Los Angeles.

“We believe the US is an established and increasingly active market for telematics. There are gains to be made in the market, which is growing rapidly,” says Zak Calisto, Global CEO for Cartrack. “With the impending Electronic Logging Device mandate for fleets in the US, we see a large potential market for Cartrack’s telematics products.”

The use of electronic logging devices (ELDs) was part of a bill enacted by the US Congress in 2012. It mandates the installation of ELDs on all long-haul vehicles. These devices will be used to record a driver’s Record of Duty Status (RODS) electronically, which will replace the paper logbook system that some drivers currently use to record their compliance with Hours of Service (HOS) requirements. The deadline for fleets to implement ELDs is December 2017.

Since its inception over 12 years ago, Cartrack has built an active subscriber base of over 550 000 vehicles globally. South Africa is currently the largest operation but the company’s global expansion strategy has thus far led to the launching of operations in more than 23 countries within Africa, Europe and Asia-Middle East.

“When we compare Cartrack’s technology to other products in the US, we believe we have an offering that will find ready-acceptance in the US. We offer at least the same features and in several respects, the product may be even more advanced because of the uniqueness of the product design and numerous features that have been developed over the years for the South African market, which is a very demanding environment in respect of both security and driving conditions.

“We do not intend to compete with the high-end fleet management products that are integrated into the vehicles. This is not our primary focus,” says Travis Schmidt, CEO of Cartrack’s US business. “I believe we have the ability to offer the US market a competitively-priced and higher-quality product than that which we have seen in the US market to date.”

Cartrack has spent time on technical development specifically for the US market to ensure requirements for International Fuel Tax Agreement (IFTA) reporting are met. The applications for telematics have expanded significantly into the fleet management arena over recent years, focusing on driver behaviour monitoring, safety on the roads, insurance risk management and fleet and workforce efficiency and productivity improvement. Cartrack has penetrated these markets with a range of products and features. Currently, approximately 60% of Cartrack’s unit sales are made into these markets, making it a truly diversified telematics service provider.

“We see a real opportunity in the fleet management sector, and for the insurance industry as well in terms of risk management. This is a large and growing market on most continents and “the other side of fleet management,” says Schmidt. “Companies who operate fleets are looking for increased productivity, efficiency enhancements and cost reduction by being able to better manage their infrastructure and improve profitability.”

Safety improvement on the roads is also a huge thrust in the US, with serious liability consequences for driver negligence.

“Following-on from our experience in entering markets in the Europe and Asia, we know the US market will take time to penetrate and that this has an associated cost. However, we are committed to introducing ourselves into this market carefully and selectively, while ensuring that we penetrate and compete effectively over time. We will be leveraging off our existing technology base, which is centrally managed from South Africa and the marginal cost of expansion is therefore controlled and minimized. Cartrack is a highly cash generative business in all its established operations, thus expansion is intended to be funded from internal cash flows,” Calisto concludes.

Fastest growing market

Telematics is one of the fastest evolving and attractive markets at the moment, as evidenced by Verizon Communications Inc’s. recent acquisition of GPS vehicle-tracking company Fleetmatics Group Plc for $2.4-billion. Verizon’s telematics division posted $400-million in sales in the first half, with the business growing about 25 percent year-over-year.

Similarly, Novatel Wireless (Nasdaq:MIFI), a leading provider of solutions for the Internet of Things (IoT) and inventor of MiFi® technology, last year acquired South African based DigiCore Holdings for approximately USD $87-million.

According to Research and Markets, the world’s largest market research company, the global commercial telematics market is expected to reach approximately US$41-billion by 2020, indicating a compounded growth rate of 16% per annum for the next five years.

Berg Insight, a global research company offering intelligence to the telecom industry, believes the market for fleet management in the Americas is in a growth period which will continue in the years to come. In regard to Europe, Berg Insight forecasts the number of fleet management systems in active use to grow at a compound annual growth rate of 15,1%, increasing from 4,4 million units at the end of 2014 to 8,9 million by 2019.

The Insurance Telematics market is also currently in a phase of strong growth which is expected to accelerate in the coming years. Berg Insight estimates the European market to grow at a compound annual growth rate of 42,4% to reach 28,1 million by 2019. In North America, the total number of Insurance Telematics policies in force is forecasted to reach 32,5 million policies by 2019, representing a compound annual growth rate of 50,6%.

Cartrack currently has a presence in 23 countries which spans across Africa, the Middle East, Europe and Asia, and now the US.

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