Connected Car Market Research Report: By Service (Driver Assistance, Entertainment, Vehicle Safety, Mobility Management, Fleet Management), Technology (2G/3G, 4G/ LTE, 5G), Application (Navigation, Infotainment, Telematics), Connectivity (Embedded, Integrated, Tethered), End Use (OEM, Aftermarket) - Global Industry Analysis and Growth Forecast to 2025

Market Outlook

The connected car market revenue was $72,499.2 million in 2019, and the market is predicted to progress at a CAGR of 24.1% from 2020 to 2025. The burgeoning requirement for an enhanced driving experience, adoption of the internet of things (IoT) in the automotive industry, and concerns being raised over vehicular safety and security are the main factors fueling the market advance.

Due to the COVID-19 pandemic, the global automotive industry has been badly hurt. This is because the lockdown measures implemented around the world led to the shutting down of auto plants. Similarly, factories producing the components and electronic systems for connected cars were also closed. On the demand side, the widespread financial distress has led to the extremely low sales of vehicles, as people are majorly spending on drugs and other essential commodities.

Driver Assistance Generating Highest Revenue in Market

In 2019, the driver assistance service category held the largest share in the market. This was due to the large-scale integration of advanced driver assistance system (ADAS) features in vehicles due to the concerns of people over vehicular safety and enactment of favorable government policies and regulations regarding ADAS, which is boosting the connected car market advance. In many countries, the authorities have made the installation of ADAS features in all new automobiles mandatory. For example, in the U.S., the National Highway Traffic Safety Administration (NHTSA) has made the integration of electronic stability control (ESC) in all automobiles that were manufactured after 2012 mandatory.

5G Predicted To Exhibit Fastest Growth in Coming Years

The 5G category is predicted to demonstrate the fastest growth in the forthcoming years, under the technology segment. This is attributed to the soaring requirement for driving-related information in automobiles, on account of its ability to reduce the latency time and improve the overall driving experience, by providing the driver with real-time traffic updates. Additionally, the surging demand for better coverage enhancement across the world is driving the integration of the 5G communication technology in vehicles.

Navigation Set To Register Fastest Growth in Market in Coming Years

The navigation application category held the largest share in the market for connected cars in 2019, and it is predicted to demonstrate the fastest growth in the upcoming years. The progress of the category is being driven by the rising requirement for real-time in-vehicle navigation and improved optimization with proper route planning features, for a hassle-free journey.

Integrated Connectivity Category To Exhibit Fastest Growth in Future

The integrated connectivity category generated the highest revenue in the connected car market in 2019. Moreover, this category is predicted to demonstrate the highest growth rate from 2020 to 2025. This is credited to the ballooning requirement for the integration of high-resolution human–machine interfaces (HMI) in connected cars and surging demand for better in-vehicle communication and vehicle management systems.

Original Equipment Manufacturers (OEM) Holding Larger Market Share

The OEM category dominated the market for connected cars in 2019, under the end use segment. This category is also predicted to hold the larger share in comparison to the aftermarket category in the coming years. This will be a result of the higher requirement for these solutions among OEMs on account of the implementation of strict government regulations regarding vehicle and passenger safety around the world. As a result, automobile manufacturing companies are required to provide various built-in technologies in their vehicles.

North America Dominating Industry

North America held the largest share in the 2019 on account of the huge requirement for connected cars and advanced technologies in passenger vehicles. Connected cars are equipped with roadside assistance, smartphone connectivity, automobile diagnostics, traffic and collision warning, and real-time traffic update features. In essence, the growing requirement for a safe driving experience and increasing implementation of favorable policies by state and federal governments regarding enhanced driving technologies are propelling the expansion of the connected car market in this region.

Additionally, the region is home to numerous leading automobile manufacturers, such as Ford Motor Co., Tesla Inc., and General Motors Co., which are involved in extensive R&D pertaining to advanced automotive technologies.

Asia-Pacific (APAC) — Most-Expeditious Regional Market

The connected car industry is predicted to register the fastest growth in the APAC region in the coming years. This will be because of the increasing requirement for the integration of connected devices in passenger cars and surging popularity of digital services, such as software updates and cybersecurity.

Besides the aforementioned factor, the increasing number of strategic alliances being announced between automotive and non-automotive companies for developing an improved communication infrastructure and meeting the government regulations for automobile data security is predicted to drive the sales of connected cars in this region.

Adoption of Artificial Intelligence in Vehicles Major Market Trend

One of the major trends currently being witnessed in the industry is the advent of artificial intelligence (AI) interfaces. Across the globe, several automakers are adopting AI software in vehicle infotainment systems. Such moves by the connected car market players are allowing these infotainment systems to serve as virtual personal assistants that have the ability to respond to the voice commands of drivers and proactively guide them with the help of navigation systems. Moreover, the adoption of AI is fueling technological innovations in the automotive industry, which is, in turn, resulting in higher customer satisfaction and improvements in the driving experience.

Soaring Requirement for Enhanced Driving Experience Propelling Market Advance

The increasing urbanization rate is positively impacting the demand for commercial and personal vehicles, especially in developing countries, such as India, Indonesia, and China. The sharp increase in the number of automobiles on the roads is causing various issues, such as roadblocks, lack of parking space, and long traffic jams. With the adoption of advanced connectivity features, these issues can be resolved to a great extent, which could, in turn, substantially improve the driving experience. Thus, the growing requirement for an enhanced driving experience is fueling the market expansion.

Increasing Concerns over Safety and Security Boosting Market Growth

The other major factor driving the progress of the market is the increasing concerns being raised over safety and security by governments, end users, and connected car market players. Advanced technologies, such as lane assist, automatic braking, and ADAS, massively improve the driving experience and considerably enhance vehicular safety. Moreover, these technologies play a major role in reducing the incidence of traffic rule violations, thereby mitigating the prevalence of road accidents. Because of this reason and the increasing enactment of strict vehicle safety regulations by governments, the adoption of IoT and ADAS in automobiles is rising sharply across the globe.

Integration of IoT in Automotive Industry Propelling Market Expansion

The integration of IoT-based technologies in automobiles is completely transforming the face of mobility by helping automakers achieve better connectivity in these vehicles. IoT covers a plethora of advanced connectivity solutions and infotainment services for drivers. The rapid commercialization and incorporation of IoT and various associated technologies are positively impacting the market growth, by increasing the popularity of vehicles that have such features.

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Market Players Entering into Partnerships and Collaborations to Gain Competitive Edge

The global connected car market is partially fragmented in nature, with the presence of market players such as DENSO CORP., Delphi Technologies PLC, Valeo SA, ZF Friedrichshafen AG, and Robert Bosch GmbH.

In recent years, players in the industry have entered into a number of collaborations and partnerships, in order to stay ahead of their competitors. For instance:

• In December 2019, DENSO CORP. collaborated with NTT Communications Corp. in order to begin validating their jointly developed vehicle security operation center (V-SOC) technology, to monitor and analyze a vehicle’s security status, from January 2020 onward. The companies are developing the solution in order to create resilient security solutions for connected cars.
• In December 2019, Infineon Technologies AG entered into a partnership with Oculii Corp. for the development of an imaging radar software technology for automotive applications. The new radar technology would improve the reliability, safety, and efficiency of connected cars and autonomous vehicles, at an optimized cost.
• In October 2019, ON Semiconductor Corp. entered into a partnership with Almotive GmbH to develop prototype sensor fusion platforms for automotive applications. Further, the partnership aimed at developing a series of hardware platform demonstrators, combining ON Semiconductor’s high-definition (HD) camera, radar sensor, and pre-processor chipset technologies with Almotive’s advanced AI-based perception algorithm, hardware acceleration, and simulation capabilities.

Some of the Key Players in Connected Car Market Include

Connected Car Market Size Breakdown by Segment

The connected car market report offers comprehensive market segmentation analysis along with market estimation for the period 2014–2025.

Based on Service

• Driver Assistance
• Entertainment
• Vehicle Safety
• Mobility Management
• Fleet Management

Based on Technology

• 2 generation (G)/3G
• 4G/ long-term evolution (LTE)
• 5G

Based on Application

• Navigation
• Infotainment
• Telematics

Based on Connectivity

• Embedded
• Integrated
• Tethered

Based on End Use

• Original Equipment Manufacturer (OEM)
• Aftermarket

Geographical Analysis

• North America
  • U.S.
  •  Canada
• Europe
  • Germany
  • Spain
  • France
  • U.K.
  •  Italy
  • Netherlands
• APAC
  • China
  • Japan
  • South Korea
• LAMEA
  • Brazil
  •  Mexico
  • U.A.E.