Increasing demand for improvements in transportation operations is projected to drive fleet management market growth, finds Future Market Insights (FMI) in a recent market survey.
In 2020, the coronavirus outbreak compelled manufacturers operating in the fleet management market to seek out impactful solutions for small and large-sized fleet operators.
In addition to this, companies are actively providing consultation services to help end-users navigate through concerns pertaining to operations and revenue, which in turn is keeping the market afloat.
The survey divulges insights into factors enabling growth across key segments, including component, fleet type, application, and industry. The incorporation of technological advancements in software systems is anticipated to fuel sales.
2021-2031 vs. 2016-2020 Fleet Management Market Outlook
The global fleet management market is estimated to be valued at US$11.5B in 2021.
The fleet management market is expected to witness growth at a CAGR of 10.4% during the forecast period 2021-2031.
The introduction of connectivity-driven technologies such as artificial intelligence (AI), cloud computing, and big data analytics is boosting sales in the global fleet management market.
Apart from this, government subsidies aimed at encouraging production and fleet management software adoption will shape the demand outlook positively.
Technological innovation is backing every industry vertical and transportation and logistics industries are no exceptions. Today, consignment delivery is ensured with rising smartphone usage and related applications along with the availability of real-time tracking solutions.
Owing to such advancements in technology, fleet management solutions enable consumers and businesses to facilitate cost-efficient transport and logistics with fuel and route choice optimization.
The global fleet management market is anticipated to witness growth in revenue from US$10.5B in 2020 to over US$30.9B by 2031.
Surging demand in North America
According to the FMI analysis, the overall fleet management spending in the U.S. alone is likely to increase at a rate of 10% between 2021 and 2031, with a market value of US$2.6B in 2021.
North America will emerge as the largest market for fleet management, due to the strong presence of service providers, in the region. This is attributed to the increase in demand from various industrial verticals. Moreover, increasing demand for full-service leasing is significantly fueling the growth of fleet management companies in recent years.
In North America, especially in the U.S., continuous innovation in big-data analytics in fleet management is resulting in greater choice, flexibility, and cost-saving solutions for fleet management and towards the future of mobility.
In terms of large-sized fleet operators, a spike in demand for on-demand trucking services has been witnessed in recent years. Cost-reduction and automated task management will continue shouldering demand for fleet management systems, thereby propelling sales in the market.
Digital transformation and FMS
Increasing digitization is enabling firms to restructure departments and put additional staff on the front line where they can be used to support the growing demand for consultancy services. Waiting in the wings as an untapped resource is a huge volume of real-time vehicle data.
This information could deliver potentially huge benefits in terms of predictive maintenance, safety, and asset management. This looks unlikely to happen this year. The issue of who controls this data – OEM, leasing/rental company or end-user – and how it should be packaged and paid for remains unanswered, with no conclusion on the immediate horizon.
For customers, digital platforms are becoming ever more intuitive and flexible. This is particularly true of the PCH channel. Digital interaction and customer service-based Artificial Intelligence (AI) systems are being rolled out across the industry. This ensures the delivery of major levels of personalization and detail which are increasingly replacing car showrooms.
These services are providing a more reliable and efficient means of individual transactions for lease companies and brokers. The rental sector is also embracing digitization creating potentially lucrative opportunities.
Key expansion strategies
Market players are delivering solutions proactively and providing consultation services to help end-users maneuver through the ongoing pandemic. Companies are developing creative solutions for their customers.
However, every fleet varies, which means different fleets demand different operational and management strategies. Customers dealing with larger fleets are concerned about the operational impacts of COVID-19. Companies are helping these customers ensure efficiency and enhanced productivity, especially for fleets that are deployed for essential use cases.
Companies are also deploying service professionals to cater to non-preventive and preventive maintenance demands. Small-sized fleet operators are more sensitive to the short-term economic impacts of the ongoing pandemic. Companies are working to cater to customization demands aimed at meeting ever-changing requirements.
- The fleet management hardware segment will remain dominant through 2031, accounting for 48% of the total market share.
- In terms of fleet type, trucks/cars/buses are anticipated to enhance growth prospects in the market.
- Fleet tracking and geofencing will exhibit high demand due to increased productivity and visibility in fleet management operations.
- The transportation sector is anticipated to remain the leading end-user backed by the growing need for real-time location tracking and schedule management for effective delivery.
- North America is anticipated to emerge as the most lucrative market, owing to increasing demand from end-use industries for full-service leasing.
- Technological advancements to support safety and automation in transportation will drive sales in the market.
- The increasing adoption of connected vehicles will shape the demand outlook for the fleet management market.
- Threats regarding cybersecurity and data breaches may hamper sales prospects.
- Lack of professional training to operate and launch fleet management software by fleet personnel may hinder the market growth.