August 16, 2022
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Connected Cars Market Size Estimated to Surpass $170.5 Billion Mark by 2026

The global Connected Cars Market size is estimated to surpass $170.5 billion mark by 2026 growing at an estimated CAGR of more than 14.4% during the forecast period 2021 to 2026. The market is driven by progress in level of autonomous technology and dictate usage of 4G technology embedded in the car, and 5G coverage rollout will become ubiquitous. This game-changing concept is called as “Connected Car”, where the car is suitably defined as a vehicle using mechatronics, telematics and artificial intelligence technologies to interact with the environment. This provides greater safety, comfort, entertainment and, importantly a connected life experience. Rising demand for Vehicle Management, Advanced Driver Assistance Systems and fleet management is projected to drive market growth. Over the last few years, automotive electronics and wireless technologies have grown by leaps and bounds. Advancement in these technologies combined with device convergence and changing lifestyle demands are enabling the automobile to extend the driving experience beyond traditional vehicle transport.

Key Takeaways

  • The Global OEMs have rapidly boosted innovation in the area of safety. The finding stated, the number of accident prevention technology has increased by more than 500%, and Advanced Driver Assistance System (ADAS) innovation by 400%, over the eight years. The first benefit is driving getting safer, with active collision warning technology recognize pedestrian and active cross traffic assistant systems that can prevent very serious accidents. With V2V (vehicle-to-vehicle) communication becoming a reality, Diamler’s new Mercedes E-Class, is an example.
  • Second factor is driving is getting more convenient, due to improved human-machine interfaces can now use natural language processing to control many of car’s functions, and further advances in ADAS will continue to make driving easier. For example, BMW 7 Series offers the garage parking assistant, and Tesla recently introduced its Summon feature. Mostly the continuous advances in autonomous driving is essentially expected by car manufactures and players like Google and Tesla.
  • The current development process for security software involves binding it to the car’s hardware. As a result, updating the software will set to support functions, including risk management, progress monitoring and reporting, and incident management, all of these must also be put in place if the software development effort is to succeed.

Connected Car Device Market Segment Analysis – By Connectivity Type

Increasing number of solutions are providing vehicle to infrastructure communication (V2I) and vehicle-to-vehicle communication (V2V), allowing the driver able to communicate effectively. The Connected Car Devices Market is segmented into 3G, 4G, 5G, Wifi, Bluetooth and DSRC technology. DSRC Technology is a fast growing market showcasing growth of 18.6% through 2026. Among all, these 4G technology is witnessing the high demand on account of it being the fastest connectivity technology. However 5G is set to grow at the fastest rate. The demand for navigation, Vehicle Management, Advanced Driver Assistance Systems and fleet management is growing extremely in region of APAC, due to growing adoption rate of Ola and Uber services. This helps the user to know the real time update about the traffic. This is especially true in the development of network technology is expected to create growth opportunities for the market.

Connected Car Device Market Segment Analysis – By End Market

The OEM segment dominates the market with share of 78% in 2020. Today, nearly 70 percent of the inclusive connected services sales come from superior brands such as General Motors Co., Bavarian Motor Works (BMW), Audi AG, Honda Motors Co. Ltd., Fiat Automobiles and others. By 2026, this number will grow extremely, due to reduction in expenses. The modern tech world will influence the market to generate sales. A large market aftersales has led the companies to upgrade their services will likely be established, much like market for apps and accessories that grew quickly in smart phones. This will provide incremental revenue for OEMs and open up opportunities for new startups and technology providers.

 Connected Car Device Market Segment Analysis – By Geography

Geographically, the market is segmented into North America, Europe, Asia-Pacific, South America and rest of the world. The Asia-Pacific region indicated a prominent growth at 16.9% through 2026 and keep its market-leading position over the forecast period. In the years to come, APAC should be eminent in automobile market. One of the key factors for increased demand for infotainment and navigation services as well as Vehicle Management, Advanced Driver Assistance Systems and fleet management solutions, particularly in China, Japan and South Korea. North America and Europe are well established in the present market, this helps the inventors to expand their business in the others regions, who are likely to chase towards the development.

Connected Cars Market Drivers

New Technologies driving Connected Car Penetration

Many technologies are completely transforming the driving experience such as driverless cars that can drive itself with no human intervention under certain circumstances using some communication protocol such as vehicle to vehicle (V2V) and vehicle to infrastructure (V2I) technologies. The artificial intelligence (AI) software in vehicles’ infotainment system serve as a virtual personal assistant with the ability to respond to voice commands and guiding drivers in navigation systems. With increasing use of sensors and other technologies, AI is the key for autonomous driving that requires major enhancements in vehicles and infrastructure. This effort will increase demand in both automobile and construction sector that will automatically increase revenue in the connected cars market.

Rise of V2X and Telematics

Automotive telematics play a vital role in monitoring vehicle infirmity and smart maintenance service. V2V allows vehicles on a road to talk with each other by sharing data on speed, road conditions, and other factors through improvised network created among vehicles. This helps the vehicles to avoid crashes, and ease traffic congestion. The upcoming trend in the automotive industry is vehicle to everything (V2X) technology that will make vehicles to communicate with smart traffic signals. Sensors such as LiDAR, radar, cameras, and ultrasonic in connected cars are impacting auto safety, security, and vehicles maintenance costs.

Connected Cars Market Challenges

Data Security Challenges

Security breaches pertaining to internet connectivity which was a major challenge for the connected cars manufacturers is being sidelined by developing cybersecurity technologies consisting of intrusion detection and protection software. The rising use of Vehicle Management, Advanced Driver Assistance Systems and fleet management solutions is set to multiply the amount of data being collected. Such assurance in term of security diminishing hacking and system failure has elevated the consumer’s preference towards connected cars positively influencing the market. Technology is everywhere in the market and it has struck the connected cars market as well. Even though the enabling technology has influenced the market, its customers are still concerned about cyber-attacks. In order to safeguard the customers’ qualms, the U.S. government has started to introduce regulatory frameworks such as Self Drive Act. They are even working on data security regulation.

Connected Cars Market Landscape

Product launches, acquisitions, and R&D activities are key strategies adopted by players in the Connected Cars Market. General Motors Co., Bavarian Motor Works (BMW) AG, Audi AG, Bosch (Germany), Denso (Japan), and Harman (US), Honda Motor Co. Ltd, Fiat Chrysler Automobiles, Mercedes-Benz, and Continental (Germany), and Delphi (UK) are considered to be the key players of the Connected Cars Market.

Acquisitions/Technology Launches/Partnerships

  • In February 2020, Microsoft and Bosch partnered to build a connected car software platform. The platform will run on technology giant’s cloud service, and have software modules from the German auto component maker.
  • In March 2019, Alibaba AI Labs partnered with major automotive OEMs to supply technology for home-to-vehicle such as Daimler, Volvo, and Audi AG.