Telematics on the rise in South Africa

The number of active fleet management systems deployed in commercial vehicle fleets across South Africa reached an estimated 1,1 million in quarter four of 2016, according to a new research report from the analyst firm, Berg Insight.

The report indicates that, growing at a compound annual growth rate of 12,6 percent, this number is expected to reach 1,9 million by 2021.

The market is dominated by a group of South African aftermarket telematics players including Cartrack, MiX Telematics, Ctrack, Altech Netstar and Tracker. They have installed the bases of more than 100 000 fleet-management units each on the domestic market.

Notably, these top-five players together represent as much as two thirds of the total number of active fleet-management systems in use in the country today.
 
Rickard Andersson, senior analyst, Berg Insight, says foreign telematics players, such as TomTom Telematics, Pointer Telocation and Geotab, have generally not managed to achieve any top-ranking market shares on the South African fleet management market so far.

“Most other foreign vendors have more limited presence and many renowned international players have not yet entered South Africa at all,” says Andersson.

He adds that the remote location and the relatively high telematics penetration, combined with the presence of an abundance of local solution providers, can act as barriers for international fleet-management providers eyeing the South African market.

The South African fleet telematics market is far ahead of the rest of the African continent in terms of adoption, despite sub-Saharan Africa being the least-developed region. Northern Africa is comparably advanced and well ahead of sub-Saharan Africa when it comes to fleet telematics penetration, though still quite a bit behind South Africa.

According to Berg Insight, the African fleet-management market beyond South Africa is described as “challenging” by many industry representatives, but promising as well.

The report indicates that South Africa’s recent weak economic environment, foreign exchange rate fluctuations and unstable political climate makes the market a challenging business environment overall.

The report says there are, however, promising prospects for players adapting to the local market dynamics as the rest of the African market has considerably more untapped opportunity than South Africa can offer at this stage.