The automatic vehicle location (AVL) systems market continues to grow and, in the view of one market research firm, offers expanding opportunities to a variety of companies.
According to Frost & Sullivan’s North American Automatic Vehicle Location Hardware and Service Markets report, the AVL industry generated revenues of nearly $500 million in 1999. Frost & Sullivan projects revenues to grow aggressively, surpassing $3 billion by 2007.
Strong economic growth and customers' growing reliance on just-in-time delivery are largely responsible for the growing number of delivery vehicles in use, which in turn expands the potential market for AVL systems.
However, though a growing market results in high demand for products, as demand is met, the need for new products will become less important. Therefore, towards the end of the forecast period, as demand for new products slows, the replacement segment should experience a significant upturn in demand and sales, the form said.
“As these units age and become technologically outdated, a replacement cycle can be expected to kick in. This should sustain demand even when the major market segments are satiated.” Frost & Sullivan industry expert Joerg Dittmer said.
While the AVL market in the long-haul trucking industry is already well established there are several other segments where these solutions are just beginning to penetrate. Manufacturers and providers that target these emerging segments can position themselves to take advantage of the replacement market in the future.
“The local-use fleet and trailer divisions are ready for tremendous growth due to the success of AVL systems in long-haul use,” said Dittmer. “There are also many sub-divisions in the local-use area, including prime sectors like government and mass transit vehicles.”