Connected Car Market by Connectivity, End-user, and Geography - Forecast and Analysis 2023-2027

Connected Car Market Forecast 2023-2027

The connected car market is forecast to invrease by 172.76 billion, growing at a CAGR of 27.36% between 2022-2027. Market expansion hinges on various factors such as the escalating internet penetration, which significantly influences the connected cars sector. Additionally, the utilization of blockchain technology in connected cars and government mandates aimed at enhancing in-vehicle safety and safety controls contribute to market growth. However, challenges persist, including the intricate design and technological hurdles faced by manufacturers. Furthermore, the relatively short product lifespan of connected car technologies, attributed to the rapid advancements in passenger smartphones, poses a significant obstacle. Additionally, managing the extensive data generated by connected cars presents another challenge. Despite these hurdles, the market continues to evolve, driven by ongoing technological innovations and regulatory initiatives aimed at enhancing safety and connectivity in vehicles.

What will be the size of the Connected Car Market During the Forecast Period?

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Market Segmentation

This report extensively covers market segmentation by connectivity (embedded solutions, integrated solutions, and tethered solutions), end-user (OEM and aftermarket), and geography (North America, Europe, APAC, South America, and Middle East and Africa). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.

By Connectivity

The market share growth by the embedded solutions segment will be significant during the forecast period. In recent times, telematics with a navigation system and smartphone integration was integrated with the in-vehicle infotainment system. These systems are moving towards adopting embedded software and smartphone-based applications, which provide entertainment, navigation, external communications, security, and Internet-based services.

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The embedded solutions segment was valued at USD 10.75 billion in 2017 and continued to grow until 2021.The growing demand for hybrid vehicles worldwide is encouraging smartphone manufacturers to develop applications that will help consumers connect their smartphones to the vehicle to provide the real-time status of their vehicle battery. Furthermore, investments in autonomous cars are increasing. , in January 2019, BlackBerry and Baidu, a Chinese search engine company, announced a collaboration to provide embedded solutions for autonomous vehicles in China.

Under the collaboration for integration of Baidu high-definition maps into BlackBerry real-time operating system, QNX Neutrino. As such developments and applications require the use of embedded software, such collaborations will drive market growth. Automotive OEMs, of late, are focusing on reducing the cost of embedded infotainment systems integrated into automobiles. The introduction of low-cost infotainment solutions increases the sales of vehicles equipped with infotainment systems. This will lead to the increased adoption of embedded solutions in automotive infotainment systems. Therefore, such drivers are expected to positively impact the growth of the global market during the forecast period.  

Key Region

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North America is estimated to contribute 35% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.

The US and Canada are among the major contributors to the growth of the market in North America. The primary factors for the growth are the advent of IoT technologies in cars and the rising adoption of vehicle-to-vehicle (V2V) connectivity.  In addition, stringent regulations from National Highway Traffic Safety Administration (NHTSA) on road safety improvements have led to a rise in the adoption of connected features like crash imminent braking, dynamic brake support, and pedestrian automatic emergency braking in cars.  

Furthermore, several firms also provide external plug-in connectivity solutions in cars. For instance, the Advance Connectivity and Automation in the Transportation System (ACATS) program conducted by the Government of Canada creates awareness about autonomous and connected technologies and develops innovative connectivity solutions. Such government initiatives are also expected to drive the growth of the market in North America during the forecast period. 

Market Dynamics and Customer Landscape

The expansion of the connected car market is propelled by various factors, including advancements in vehicle production and the integration of advanced safety and comfort features. Legislative policies and regulations also play a crucial role in shaping the market landscape, ensuring compliance with safety standards and promoting innovation. Moreover, the rise of online platforms facilitates the adoption of connected car technologies, enabling real-time communication and connectivity solutions. Advanced driver assistance systems (ADAS) and self-driving capabilities, coupled with V2V communication and blind spot detection, enhance vehicle performance and safety. The emergence of 5G technology, supported by the 5G Automotive Association, further accelerates connectivity and enables innovative applications in the connected car ecosystem, driving the market's growth. Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.

Key Market Driver

The government regulations to increase in-vehicle safety and improvement in safety controls are notably driving the market growth. Governments worldwide are focusing on improving safety standards and environmental conditions. Telematics solutions such as eCall and ERA-GLONASS are increasingly being adopted in vehicles. These two examples were a result of increased focus on the connectivity capability in vehicles.   

Additionally, the increasing adoption of safety technologies like advanced driver assistance systems (ADAS) is another factor attributing to the adoption. For instance, ADAS technologies can curb 30% of all accidents, while autonomous technologies can curb them by 90%. While ADAS contributes to reducing accidents, the ability of the automotive reconfigurable instrument is likely to assist the drivers in easier information processing of the in-vehicle systems and contribute to safer driving. Thus, this system contributes to the vehicle's onboard safety and makes it easier for the drivers to process information while constantly having an eye on the road. Therefore, these factors will drive the global market growth during the forecast period. 

Significant Market Trend

Big data platforms provided by connected cars to push further developments are emerging trends in the market. The growth of connectivity solutions in the automotive segment is expected to offer a huge opportunity for automobile OEMs during the forecast period. Automotive OEMs focus on developing efficient products for customers, owing to the increasing availability of real-time data. Moreover, big data is expected to grow further due to the rising adoption during the forecast period.  

Furthermore, insurance providers can use this data to calculate the optimum premium for individual customers as per their driving behavior calculated from their vehicle usage real-time data. This allows insurance providers to create long-term and more profitable customer relationships. Therefore, such factors will fuel the market growth during the forecast period. 

Major Market Challenge

Data challenges associated are major challenges impeding market growth. The number of vehicles with wireless network connectivity is increasing every year. They are capable of generating huge amounts of data, including engine performance to driver performance data. The generated data through such cars can influence the growth of the automotive industry and the driving experience. However, there are significant challenges associated with the generation and handling of data. Most importantly, vendors face challenges such as determining what kind of data should be collected, how it should be used, and how the data can be protected.  

Furthermore, another data challenges associated with connected cars is understanding how to use the data to provide better and personalized customer experiences. Therefore, such challenges are expected to hinder the growth opportunities for vendors in the market, which in turn, will affect the market growth during the forecast period.

Key Market Customer Landscape

The report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.

Global Market Customer Landscape

Who are the Major Connected Car Market Companies?

Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.

Airbiquity Inc. - The company offers a full range of connected vehicle technologies and services, integration expertise, and solution hosting flexibility to its customers. The key offerings of the company include connected cars. 

The report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:

• Alps Alpine Co. Ltd.
• AT and T Inc.
• BMW AG
• DXC Technology Co.
• Ford Motor Co.
• Intellias group
• Mercedes Benz Group AG
• NXP Semiconductors NV
• Qualcomm Inc.
• Robert Bosch GmbH
• Samsung Electronics Co. Ltd.
• Schaeffler AG
• Sierra Wireless Inc.
• Telefonica SA
• Tesla Inc.

Qualitative and quantitative analysis of vendors has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.

Segment Overview

The report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027. The market has been segmented by Connectivity (Embedded solutions, Integrated Solutions, and Tethered solutions), End-user (OEM and Aftermarket), and Geography (North America, Europe, APAC, South America, and Middle East and Africa).

• Connectivity Outlook 
  • Embedded solutions
  • Integrated solutions
  • Tethered solutions

• End-user Outlook
  • OEM
  • Aftermarket

• Region Outlook 
  • North America
    • The U.S.
    • Canada
  • Europe
    • The U.K.
    • Germany
    • France
    • Rest of Europe
  • APAC
    • China
    • India
  • Middle East & Africa
    • Saudi Arabia
    • South Africa
    • Rest of the Middle East & Africa
  • South America
    • Chile
    • Brazil
    • Argentina

Market Analyst Overview

The growth of the connected car market is propelled by numerous factors such as the integration of advanced safety and comfort features, vehicle infotainment systems, and the emergence of self-driving or automated vehicles. Legislative policies and regulations aimed at enhancing vehicle safety and promoting electric mobility also play a crucial role. Advanced Driver Assistance Systems (ADAS) features, including ABS, ESC, AEB, collision warning, lane assistance, and blind spot detection, contribute to improved vehicle safety. The ease of vehicle diagnosis is crucial for fleet management, ensuring adherence to maintenance schedules and efficient monitoring of diagnostic systems, smoke emissions, and fuel consumption.

Additionally, advancements in network technology, including 5G, facilitate V2V and V2I communication, enabling real-time communication and enhanced convenience for drivers. Car manufacturers, service providers, and technology companies are actively involved in the development and adoption of connected car solutions, driving the market forward amid the transition phase towards 5G-enabled connected car solutions. The market is witnessing rapid growth driven by various factors. V2V communication and predictive technology contribute to enhanced safety, reducing road accidents. The maintenance schedule includes monitoring diagnostic systems and smoke emission.

Moreover, the advanced features like ABS, ESC, and AEB further bolster vehicle safety standards. The emergence of 5G networks, supported by the 5G Automotive Association, enables high-speed data transfer, facilitating seamless connectivity. Telecommunication companies like AT&T are pioneering 5G-enabled connected car solutions, offering remote access and GPS tracking. With embedded connectivity solutions and advanced diagnostics, vehicle maintenance becomes more efficient. Additionally, the demand for luxury and comfort drives the adoption of connected cars, while global standards ensure quality and interoperability. As technology advances and production scales up, the connected car market continues to revolutionize transportation and improve overall driving experiences.

Scope
Report Coverage	Details
Page number	171
Base year	2022
Historic period	2017-2021
Forecast period	2023-2027
Growth momentum & CAGR	Accelerate at a CAGR of 27.36%
Market growth 2023-2027	USD 172. 76 billion
Market structure	Fragmented
YoY growth 2022-2023(%)	24.41
Regional analysis	North America, Europe, APAC, South America, and Middle East and Africa
Performing market contribution	North America at 35%
Key countries	US, China, Japan, Germany, and UK
Competitive landscape	Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks
Key companies profiled	Airbiquity Inc., Alps Alpine Co. Ltd., AT and T Inc., BMW AG, BorgWarner Inc., DXC Technology Co., Ford Motor Co., Intellias group, Mercedes Benz Group AG, NXP Semiconductors NV, Qualcomm Inc., Robert Bosch GmbH, Samsung Electronics Co. Ltd., Schaeffler AG, Sierra Wireless Inc., Telefonica SA, Tesla Inc., Valeo SA, Volkswagen AG, and Zubie Inc.
Market dynamics	Parent market analysis, market forecasting,  Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period.
Customization purview	If our market research report has not included the data that you are looking for, you can reach out to our analysts and get segments customized.

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What are the Key Data Covered in this Connected Car Market Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the market growth and forecasting of the market between 2023 and 2027
• Precise estimation of the size of the market size and its contribution to the parent market
• Accurate predictions about upcoming market trends and analysis and changes in consumer behavior
• Growth of the market industry across Europe, North America, APAC, South America, and Middle East and Africa
• Thorough market growth analysis of the market’s competitive landscape and detailed information about vendors
• Comprehensive market analysis and report on the factors that will challenge the market research and growth of market companies

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