1. Market Research

Prognostics in the European and North American Trucking Industry—Big Data is Creating all the Difference

  • January 2014
  • 95 pages
  • Frost & Sullivan
Report ID: 1941688

Summary

Table of Contents

Fleet Managers’ Demand for Vehicle Uptime and Efficiency Spur Prognostics in MCV and HCV Segments

Key Findings

Original equipment manufacturers (OEMs), telematics vendors, analytics companies, and Tier I component suppliers will play a pivotal role in market development.

- Predictive analytics and business intelligence companies enabled by Big Data will create revenue streams by providing analytics capabilities to the value chain. Integration within the value-chain partners will hold the key to revenue model.
- The revenue derived from the prognostics space will increase substantially post 2017. The estimated revenue in 2020 for North America is $xx million and $xx million in Europe for OEMs and third-party vendors. There are revenue benefits to other market participants such as aftermarket service providers, warehouse distributors and fleets. The overall revenue benefit for the entire value chain is estimated to be around $xx billion by 2025.
- Predictive analytics has reduced maintenance days by half, increased fuel efficiency, and has helped improve vehicle usage through driver behavior monitoring, leading to increased efficiency in fleets and an effective supply chain.
- The key to information generated from vehicles is held by certain participants in the value chain. Today, the benefits of basic prognostics are largely monetized by these participants–OEMs and component suppliers, internally. This situation is bound to change as telematics vendors are looking to monetize the opportunity.
- Almost xx % of fleet managers have an active or a passive purchase intention toward prognostics and diagnostics services to reduce vehicle downtime and increase vehicle efficiency. This reflects the increasing activity from OEMs and vendors to enter the prognostics space.

Key Findings and Future Outlook

In 2012, the penetration of prognostics in fleets with telematics was xx % and xx % in North America and Europe respectively.

Market Status
- The market is still in a nascent phase and value chain participants are working out ways to work with each other and to monetize the opportunity presented.
- The prognostics market is likely to reach xx % and xx % penetration within vehicles with telematics in 2020, in North America and Europe respectively.

Value Chain
- Currently, the competition is between OEMs and established telematics vendors, who are paving the way in establishing the value proposition in the market.
- The value chain will expand and major Tier I suppliers, such as Cummins, Eaton, Allison, WABCO, Bendix-Knorr Bremse, ZF, Meritor, are expected to become increasingly involved in prognostics.

Technology
- Usually, prognostics services do not complete the loop by relaying information to the service stations or dealerships. It is up to the fleet manager to choose how he or she would like to deal with the predicted maintenance event.
- Integration within the value chain and an opportunity to monetize the service will make sending information to the workshop/dealers and to fleet managers, with little or no human intervention, more common.

Pricing
- Some aftermarket vendors offer prognostics and diagnostics in their high-end solutions, or as an upgrade at $xx to $xx and € to € , in North America and Europe.
- As the market matures, the price is likely to be absorbed in the packages offered, and by 2020, OEMs will offer prognostics as a standard across all new trucks.

Prognostics in the Trucking Industry

Key benefits from prognostics include offering improvements in vehicle uptime, reduction in lifecycle costs, and creating new revenue streams for disparate market participant groups.

Vehicle Uptime
Maintenance managers understand the value of information and of structured data. Prognostics drives fact-based decision making on how a vehicle has to be maintained and the best repair options to ensure vehicle uptime. In other words, a fleet manager can service the vehicle during the course of natural downtime.

Vehicle Management Insights
A holistic approach for an asset that is not performing could be an indication of how a vehicle is managed and handled. These vehicle handling insights are important when managing a fleet. For example, an asset could be hauling heavier loads or could be handled inefficiently by drivers. Data available from the vehicle can be analyzed and corrective measures can be taken and better asset usage could be encouraged.

Improve Product Lifecycle
The average life span of a fleet has increased. OEMs are accessing data from vehicles to get insights and improve product quality and life. Prognostics for OEMs also play a significant role in saving warranty costs and improving warranty policies.

Efficient Supply Chain
As prognostics advances, it benefits the entire value chain, making it efficient and reliable. It reduces the total cost of ownership and inventories across all participants, reaping monetary and ancillary benefits.

Benefits to Truck Manufacturers

Benefits can be monetized largely by vehicle manufacturers; this will slowly change as aftermarket telematics vendors are looking to monetize this opportunity in the near future.
- Volvo’s proactive diagnostics package, which ran on a pilot of telematics equipped vehicles, helped reduce diagnostic time by xx % and average repair time by xx %.
- Volvo Group’s collaboration with AUTOSAR—a standardized software architecture developed with other vehicle manufacturers, suppliers, and developers—emphasizes the focus of OMEs in advanced technologies.
- Daimler Trucks North America’s Virtual Technician reduces repair time from – days to half– day.
- Navistar can predict breakdowns, notify operators, and proactively send parts, reducing downtime for some repairs from seven days to just 18 hours.

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