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Cartrack to launch low-cost vehicle tracking offering

11th November 2016

By: Irma Venter

Creamer Media Senior Deputy Editor

  

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Fleet management and vehicle recovery company Cartrack will launch a low-cost vehicle tracking and data-mesh solution for cars priced between R20 000 and R50 000.

The solution will be “substantially more affordable” than anything else on the market, said CEO Zak Calisto when he announced the company’s financial results for the six months ended August 31.

The solution would be available in Africa and South Africa.

“We would like to deliver a tracking solution to every vehicle on the road,” noted Calisto.

While the product would deliver a lower quality of data than traditional systems, it would still be effective, he added.

The product, in simple terms, would see devices near the asset talk to each other wirelessly – using Bluetooth, for example – to send Cartrack messages about the vehicle’s movements and behaviour.

The technology could potentially also be used for assets prone to theft, such as fridges and televisions.

Calisto added that it was Cartrack’s belief that the South African vehicle tracking, fleet management and insurance telematics market was “substantially underpenetrated”, at around 30%.

The market for vehicles under R150 000 “was almost completely untouched”.

“We believe every vehicle will be wired one day.”

That said, however, he did not believe that autonomous (self-driving) vehicles would ever render vehicle tracking obsolete, as this type of vehicle would also be stolen.

There also remained the question of whether autonomous vehicles would reach emerging markets.

“So, our services will remain relevant.”

Cartrack reported an 18% jump in revenue to R554-million for the six months ended August 31, compared with the same period last year.

Profit for the six months inched up to R119.3-million from R117.8-million in the previous period.

Calisto said the weakening rand had had a negative effect on operating profit of around R19-million.

The company’s subscriber base grew 19%, to 551 392 units in 24 countries around the world.

Around 77% of this subscriber base is in South Africa.

“Our biggest bottleneck in [terms of growth] is human resources,” said Calisto.

He said Cartrack was experiencing a severe shortage of technicians and sales staff.

“We are selling more units than we have ever sold, at around 18 000 a month. We are selling 25% more than before. We currently can’t meet demand in South Africa. We do not have enough salespeople and technicians.”

Cartrack will attempt to solve this problem by establishing training academies for both these professions.

Looking at a regional breakdown of the company’s performance, Cartrack reported a 14% jump in operating profit in South Africa for the six months under review to R145-million, but a 35% drop in the rest of Africa to R18-million.

Calisto said Cartrack was “basically treading water” in this market, severely dampened by currency depreciation, a slowdown in local business, high inflation and a sluggish commodities market.

He hopes for an improvement in the next 12 to 18 months.

“We are basically selling 50% of what we sold last year.”

Europe recorded a 26% decline in operating profit to R9.7-million.

Calisto said this market was expanding fast, with the drop in profit attributed to the company’s growth in distribution infrastructure.

The Asia-Pacific and Middle East market reported a R4-million loss, following on its loss of R5.5-million in the previous period.

Calisto was positive that this business could report a profit within three years.

The US market, which Cartrack had only just entered, would probably be lossmaking for 24 to 48 months, he noted.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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