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Automotive Software Market Research Report: By Software (ADAS and Autonomous Driving , Infotainment, Connectivity, Security, and Connected Services, Powertrain and Chassis, Body and Energy, Operating System and Middleware), Function (Development, Validation and Verification, Integration), Vehicle Type (Passenger Car, Commercial Vehicle) - Global Industry Analysis and Growth Forecast to 2030

  • Published: July 2020
  • Report Code: AT12038
  • Available Format: PDF
  • Pages: 204

Market Outlook

The automotive software market size was $28,214.6 million in 2019, and it is expected to advance at a CAGR of 12.4% between 2020 and 2030. This growth is being driven by the mounting demand for connected cars, rising research and development (R&D) activities, and introduction of innovative technologies for advanced user interfaces.

However, the automotive software industry was severely impacted by the outbreak of COVID-19 owing to the slowdown in the automobile sector caused due to the temporary lockdowns in the affected countries. The market will experience a further decline due to the booming cases of coronavirus. However, the situation will not be as worse as that of the automobile sector because of the rising demand for electric vehicles (EVs) and for advanced driver-assistance system (ADAS) solutions in new vehicles.

Automotive Software Market Outlook

ADAS and Autonomous Driving (AD) Software Dominated Market

The ADAS and AD category, under the software segment, generated the highest revenue in the market for automotive software during 2014–2019. Advanced technologies including ADAS, lane assist, and automatic braking enhance the driving experience and increase vehicular safety. These technologies also help in reducing the likelihood of road accidents by lowering the incidence of traffic rule violations. Additionally, several software companies are working on the R&D on such autonomous technology.

Development Category To Display Fastest Growth

The development category, under the function segment of the automotive software market, will record the fastest growth during 2020–2030. Comprehensive software provides improved functionality in an array of products and offers better value to customers. In recent years, automakers have started deploying more software features in vehicles. Owing to this, the dependence of automobiles on software has risen, to manage an array of components, ranging from infotainment systems to advanced drivetrains.

Passenger Cars Held Majority Share

The passenger car category accounted for the larger share in the vehicle type segment of the market for automotive software in 2019 due to the surging demand for connected cars and growing disposable income of customers. Apart from the larger consumer base for passenger cars, the mandates for vehicle safety are contributing to the growth of this category. Several automakers are proactively working on the installation of different autonomy levels in passenger cars, which has made advanced software a necessity here.

Asia-Pacific (APAC) Is Largest Regional Market

The APAC region accounted for the major market share in 2019 due to the presence of the largest automobile market, flourishing economy, and escalating purchasing power of customers. Owing to the economic development, the region is experiencing a high demand for advanced features in vehicles.

To meet this demand, automobile manufacturers are providing advanced applications, such as human–machine interfaces (HMI), auto-park assist, and keyless entry, which create a vast customer base in the automotive software market. Moreover, the leading position of APAC in the EV market acts as a catalyst for the demand for automotive software here. Among the APAC nations, China records the highest sales of EVs. In 2019, nearly 1.1 million plug-in electric cars were sold in China.

Automotive Software Market Regional Analysis

OTA Software Update Is Trending in Market

With the increasing dependency of vehicles on software, the practice of updating the automobile systems by using the OTA technology is gaining momentum. Various vehicle manufacturers are deploying this technology in their offerings to update the software of vehicles at regular intervals, as it provides more clearance at higher speeds. At present, Tesla Inc. is one of the leading companies that offer this technology. It uses the OTA software to modify or fix systems, which could involve changing the suspension settings of automobiles or recalling charger plugs.

Automotive Software Market Growth Drivers

Burgeoning Demand for Connected Cars Fueling Market Growth

Connected cars are being adopted in large numbers due to the rapid urbanization worldwide. The demand for these cars is also being fueled by the soaring concerns for vehicle safety and security, rising demand for a better driving experience, and increasing adoption of the internet of things (IoT) technology in the automotive industry. Thus, the integration of these new-age technologies is the key driver for the automotive software market. Automobile companies are integrating IoT to achieve pathbreaking results in the connectivity solutions deployed in connected cars. IoT also offers a wide range of infotainment services and advanced connectivity solutions for drivers.

Increasing Adoption of Innovative Technologies for Advanced User Interface

Automakers across the world are incorporating innovative technologies to offer an advanced user interface. As automobiles are becoming more technologically advanced, it has become essential to design the technologies to be more human and personal. For instance, the Model S by Tesla Inc. has few physical controls on or near the steering wheel. However, the majority of the secondary functions, including rear-view mirror, media player, climate control, and cell phone, do not possess any dedicated physical control. These functions can be accessed through a 17-inch touchscreen display, which is placed on the dashboard of the vehicle. Such interfaces need software for technology integration.

Rising R&D on Autonomous Technology Accelerating Market Growth

Autonomous vehicles are completely dependent on software, and the rising effort to integrate self-driving solutions creates a significant demand for software. The increasing incorporation of Level 1 and Level 2 autonomous technologies in vehicles is, therefore, acting as a catalyst for the automotive software market growth. Moreover, in 2019, some of the vehicle manufacturers introduced Level 3 autonomy in their vehicles. Further, many companies are involved in the R&D and testing of Level 4 and Level 5 autonomy in various cities of the world.

Germany became the first nation in the world to legalize the use of level 4 and 5 autonomous vehicles in 2017. In addition, some European cities have Allowed pilot fleets to operate on private properties that provide ideal road traffic conditions.

Automotive Software Market Report Coverage
Report Attribute Details
Historical Years 2014-2019
Forecast Years 2020-2030
Base Year (2019) Market Size $28,214.6 million
Forecast Period (2020-2030) CAGR 12.4%
Report Coverage Market Trends, Revenue Estimation and Forecast, Segmentation Analysis, Regional and Country Breakdown, Company Share Analysis, Companies’ Strategical Developments, Product Benchmarking, Company Profiling
Market Size by Segments Software, Function, Vehicle Type, Geography
Market Size of Geographies U.S., Canada, Germany, France, Italy, U.K., Japan, China, India, South Korea, Brazil, Mexico
Secondary Sources and References (Partial List) Alternative Fuels Data Center (AFDC), American Automobile Association (AAA), American Public Transportation Association (APTA), Australian Bureau of Statistics (ABS), Bloomberg New Energy Finance (BNEF), California Alternative Energy and Advanced Transportation Financing Authority (CAEATFA), China Association of Automobile Manufacturers (CAAM) Note: Above listed references and organizations are partial; the detailed and complete list is available in the final report.

 

Market Players are Partnering with Other Firms to Gain Competitive Edge

The global automotive software market is fragmented in nature, with the existence of market players such as NXP Semiconductors N.V., Robert Bosch GmbH, Airbiquity Inc., Renesas Electronics Corp., BlackBerry Ltd., and Microsoft Corp. In recent years, players in the industry have taken several strategic measures, such as partnerships, in order to stay ahead of their competitors. For instance:

  • In January 2020, Blackberry Ltd. announced its partnership with Amazon Web Services Inc. (AWS), to demonstrate a connected vehicle software platform for in-vehicle applications. The software combines the security and safety of BlackBerry’s QNX real-time operating system with AWS’ IoT services available on the cloud and in the car. The platform permits automakers to securely access data from the sensors of the vehicle and create software applications and machine learning models for electric, connected, and autonomous vehicles.
  • In November 2019, Renovo Motors Inc., an automotive software company, announced that it will receive data from Vaisala Oyj, for its platform for connected and autonomous vehicles. Initially, Vaisala Oyj’s road surface state dataset was to be made available through Renovo Motors Inc.’s system.
  • In September 2019, Lear Corp. announced that Xevo Inc., its automotive software subsidiary, has partnered with Hyundai Motor Company, in order to deliver Xevo Market (merchant-to-driver interaction platform) capabilities to Hyundai Motor Company’s vehicles in Europe and the U.S. The platform will enable owners of compatible Hyundai Motor Company vehicles to interact and engage with their favorite merchant brands and services, through an easy-to-use interface on the in-vehicle touchscreen, and Hyundai Motor Company’s mobile application. Offerings will include parking, fuel, dining, and a digital payment feature for a secure transaction experience with the participating merchants.

Some of the Key Players Covered in Automotive Software Market Report include:

  • NXP Semiconductors N.V.
  • Robert Bosch GmbH
  • Airbiquity Inc.
  • Renesas Electronics Corp.
  • BlackBerry Ltd.
  • Microsoft Corp.
  • NVIDIA Corp.
  • Continental AG
  • Green Hills Software LLC
  • Alphabet Inc.
  • CloudMade 
  • Intellias Ltd.
  • Connexion Telematics Ltd.
  • GlobalLogic Inc. 
  • Harman International Industries Inc.
  • KaaIoT Technologies LLC
  • Ignite Ltd.
  • NORDSYS GmbH 
  • SAP SE

Automotive Software Market Size Breakdown by Segment

The research offers market size of the global automotive software market for the period 2014–2030.

Based on Software

  • Advanced driver-assistance systems (ADAS) and Autonomous Driving (AD)
  • Infotainment, Connectivity, Security, and Connected Services
  • Powertrain and Chassis
  • Body and Energy
  • Operating System (OS) and Middleware

Based on Function

  • Development
  • Validation and Verification
  • Integration

Based on Vehicle Type

  • Passenger Car
  • Commercial Vehicle

Geographical Analysis

  • North America
    • U.S.
    •  Canada
  • Europe
    • Germany
    • U.K.
    •  France
    •  Italy
  • APAC
    • China
    •  Japan
    • India
    • South Korea
  • LAMEA
    • Mexico
    •  Brazil
Frequently Asked Questions About This Report
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