Connected Cars Market is Growing Rapidly with 15.76% CAGR by 2032

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Table of Content

By 2032, the connected cars market size will be around USD 286.89 by 2032 from accounted for USD 66.4 in 2022 and is poised to grow at a CAGR of 15.76% between 2023 and 2032.

The connected cars market growth is driven by growing investment, increased demand for enhanced user comfort, safety, and convenience, increasing technological advancements, rising disposable income, and growing government initiatives.

Market Overview

Cars that are connected to the internet and have a local area network for communication with other automobiles can reach the internet. These cars have a broad variety of devices that send and receive signals from the makers in combination with the services to improve the customer experience with the real-time engagement of the vehicles. These vehicles can link to cellphones or other mobile devices, giving the driver the ability to physically watch the vehicle's performance.

The Asia Pacific is expected to capture the largest market share over the forecast period. The growth in the region is attributed to the increase in demand for smart features in vehicles especially in the countries like China and India. One of the world's biggest marketplaces for automobiles is China, which sold more than 21.48 million passenger cars in 2021, a 6% increase over the previous year. Despite the pandemic, China remains one of the world's top vehicle exporters, which presents an incredible opportunity for predictive technology to establish itself in the Chinese auto industry. The Chinese government is putting a lot of emphasis on electric transportation as well as advanced driver assistance systems (ADAS) components of advanced car technology. With the addition of the new level 2 and level 3 ADAS features, the country's main manufacturers are updating their product lineup. For instance, the new Chitu compact SUV was introduced in May 2021 under the HAVAL name of Great Wall Motor Co. Ltd. It is powered by a 1.5L turbocharged engine with a 7-speed wet dual-clutch gearbox and has a highest power production of 135kW and a peak torque of 275Nm.

The car also has a Level 2 ADAS system, which, based on the variant, has different features. Besides, India has the potential and an opportunity to grow its connected car market as it progressively enters the automated and artificial intelligence-focused automobile sector and introduces numerous new products. For instance, in September 2020, the MG Gloster is the nation's first Autonomous (Level 1) Premium SUV, according to MG Motor India. Gloster includes the industry's first Adaptive Cruise Control (ACC), Automatic Emergency Braking (AEB), and Automatic Parking Assist systems. Other functions include Blind Spot Detection, Lane Departure Warning, and Forward Collision Warning. Thus, this is expected to fuel the market expansion over the forecast period.

Europe is expected to grow at a significant rate during the forecast period owing to the advent of 5G infrastructure. With the help of this technology, drivers can interact with other vehicles on the road in a way that was previously not feasible due to human limitations. We anticipate that almost everything in our environment will be connected by a super-fast, extremely dependable, and completely fast network due to fifth-generation wireless technology. We'll be able to fully utilize the potential of cutting-edge technologies like artificial intelligence, virtual reality, and the Internet of Things because of 5G. (IoT). As a result, businesses are concentrating on the application and advancement of 5G in vehicles to obtain a competitive edge over other market participants. Furthermore, the growing strategic initiatives by the key player are projected to drive market growth during the forecast period. For instance, in March 2023, The American electric vehicle (EV) maker Lucid Motors revealed that it had chosen Orange Business as its favoured+++ European partner due to its next-generation in-vehicle networking and digital expertise. As its operations in Europe are expanded, Lucid intends to sell its all-electric Lucid cars directly to customers while providing infotainment and telemetry communication from Orange Business. Lucid is guided by its emphasis on innovation.

Scope of this report

 

Report Highlights

• By technology, the 5G segment is expected to dominate the market during the forecast period. Some telecom companies are developing complex 5G networks to enhance connectivity between connected cars and external devices. According to the 5G Automobile Association, a smooth 5G network can stop more than 60% of traffic collisions. For instance, South Korea and the EU have partnered to build a 5G network for regional projects by spending more than USD 1.5 billion. This ought to lower the rising number of traffic collisions.
• By connectivity, the integrated segment is expected to capture the largest market share during the projected period. These technologies provide countless choices for data exchange and are more cheap than embedded and tethered systems. Leading OEMs around the world have partnered with other significant companies to develop state-of-the-art combined solutions for connected cars that enable users to communicate seamlessly. For instance, Ford and Geotab worked together to develop a tracking system for Ford vehicles.
• By service, the driver assistance segment is expected to capture the largest market share during the projected period. The penetration gap between today's vehicles and the subsequent cars is anticipated to close as a result of the advanced driver assistance systems (ADAS) presented. Additionally, end users are willing to spend more money on the newest technologies that improve driving experiences and raise driver and passenger safety as a result of the increasing technological advancements in the automotive business. Consumer behavior is significantly impacted by ADAS features like collision warning, lane aid, blind spot recognition, etc. These features are also anticipated to improve the performance of cars by decreasing vehicle delay by notifying the owner of any problems with the vehicle.

Market Dynamics

Market Drivers: The rising government initiatives

The market for connected cars will be driven by a rise in government initiatives to create intelligent transportation networks. Government initiatives during that time to create connected and autonomous vehicles helped the connected car industry expand. For instance, the growth of connected cars was significantly aided by government initiatives in the UK. To launch business automated vehicle (AV) services like delivery trucks and passenger shuttles, the UK government has committed £40 million (US$50 million) in various projects. Many trials have also taken place, and a new law has been proposed to encourage the use of connected cars. The UK is anticipated to gain £62 billion ($74.36 billion) in economic advantages from the use of connected and automated cars by 2030.

Market Restraint: Security threats

The connected car market's expansion is anticipated to be constrained by data hacking. As malware can propagate by breaking into a manufacturer's or dealer's online site, proximity is not required to infiltrate a car's network. The main security concern is that the vehicle's operating system and the data it collects and saves are accessible to hackers. For instance, in 2021 According to reports, the DoppelPaymer group launched a malware assault against Kia Motors America that disrupted operations, including in-vehicle OEM infotainment.

Opportunity: Technological advance products

To boost their revenue and obtain a competitive advantage over their rivals, connected vehicle companies are developing novel technologies, such as automated vehicles. For instance, in 2022, the American technology company NVIDIA Corporation unveiled its "DRIVE Map" autonomous vehicle navigation system. It is a multi-modal mapping system designed to accelerate the adoption of Level-3 and Level-4 automated vehicles that can run unsupervised. After acquiring HD mapping firm DeepMap last year, Nvidia has accelerated the development of DRIVE Map. These new businesses' tracking software is now used by DRIVE Map. Nvidia's DRIVE Map combines the depth of AI-based crowdsourcing with the accuracy of survey mapping from DeepMap.

Recent Developments:

In March 2021, Voyage has been acquired by Cruise, a self-driving vehicle company headquartered in the US. The acquisition will help with crowded metropolitan areas. An American self-driving vehicle business is called Voyage.

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