Global Connected Car Market Size By Technology Type, By Connectivity, By Application, By End-User (Original Equipment Manufacturer, Aftermarket), By Communication Type, By Geographic Scope And Forecast

Connected Car Market Size And Forecast

Connected Car Market size was valued at USD 65676.32 Million in 2023 and is projected to reach USD 170816.48 Million by 2031, growing at a CAGR of 14% from 2024 to 2031.

Connected cars offer seamless on-the-go connectivity by integrating comfort, performance, convenience, security, safety, and advanced network technologies, enabling drivers to stay connected to web networks and communicate in real time.

Connected cars offer real-time navigation with live traffic updates, remote diagnostics for proactive vehicle maintenance, and advanced safety features like collision detection and emergency assistance.

Additionally, they provide enhanced entertainment options such as music and video streaming. Through vehicle-to-vehicle (V2V) and vehicle-to-infrastructure (V2I) communication, connected cars also contribute to smoother traffic flow and accident prevention, promoting safer and more efficient driving environments.

Over time, automobile manufacturers and service providers have developed various connectivity options, including machine-to-machine (M2M) communication platforms, to enhance connectivity capabilities

Global Connected Car Market Dynamics

The key market dynamics that are shaping the global Connected Car Market include:

Key Market Drivers

Increasing Consumer Demand for Connectivity: Consumers' desire to stay connected while on the move has been a major driver for the Connected Car Market. 55% of consumers consider connectivity features as an important purchasing criterion when buying a new vehicle. Additionally, a report by Deloitte indicated that 59% of global consumers are willing to pay more for connected car features. This growing consumer preference for in-vehicle connectivity has prompted automakers to integrate advanced technologies to meet this demand.

Advancements in Autonomous Driving and Safety Features: The development of autonomous driving capabilities and advanced safety features has been a significant driver for the Connected Car Market. Connected car technologies, such as vehicle-to-vehicle (V2V) and vehicle-to-infrastructure (V2I) communication, are essential for the successful deployment of autonomous driving features, further fueling market growth.

The Emergence of 5G Technology and Internet of Things (IoT): The rollout of 5G technology and the growing adoption of the Internet of Things (IoT) have been key drivers for the Connected Car Market. The enhanced connectivity, lower latency, and greater bandwidth provided by 5G networks enable advanced in-vehicle features and real-time data exchange, driving the adoption of connected car technologies.

Key Challenges

Concerns over Cybersecurity and Data Privacy The threat of cyberattacks on connected cars is a major restraint for market growth. According to a study by Upstream Security, the number of reported cybersecurity incidents in the automotive industry increased by 99% from 2018 to 2019. Consumers' growing apprehension about the vulnerability of connected car systems to hacking and data breaches can slow down market adoption.

High Initial Deployment Costs: The high initial costs associated with the integration of connected car technologies can be a restraint for market growth, especially for price-sensitive consumers. A study by Strategy Analytics found that the average cost of embedded connectivity in new vehicles is around $500 per car. These costs, which include hardware, software, and installation, is a significant barrier to mass-market adoption, particularly in developing regions. Automakers need to find ways to reduce these expenses to make connected car features more affordable for a wider customer base.

Lack of Standardization and Interoperability: The absence of unified standards and protocols for connected car technologies is another restraint for the market. A report by the European Commission noted that the lack of interoperability between different connected car systems and platforms hinders the widespread adoption of these technologies. Without a common framework, automakers and technology providers face challenges in ensuring seamless integration and data exchange, which slow down the pace of connected car deployments.

Key Trends

Increasing Integration of Advanced Driver Assistance Systems (ADAS) The integration of ADAS features, such as adaptive cruise control, lane-keeping assist, and collision avoidance systems, is a growing trend in the Connected Car Market. These advanced safety systems leverage connected car technologies, including sensors, cameras, and vehicle-to-vehicle (V2V) communication, to enhance vehicle safety and improve the overall driving experience.

Emergence of Vehicle-to-Everything (V2X) Communication The development of V2X communication, which enables vehicles to exchange data with other vehicles, infrastructure, and mobile devices, is a significant trend in the Connected Car Market. A report by the European Commission estimates that the global V2X market will grow at a CAGR of 33.7% from 2020 to 2027. V2X technology allows for improved traffic management, enhanced safety, and increased efficiency, as vehicles can communicate and coordinate with their surroundings in real time.

The Transition towards Electric and Autonomous Vehicles The rise of electric vehicles (EVs) and the advancement of autonomous driving technologies are shaping the Connected Car Market. According to the International Energy Agency, global EV sales reached a record 6.6 million units in 2021, a 108% increase from 2020. Connected car technologies play a crucial role in enabling the seamless integration of these emerging vehicle technologies, enhancing functionality and user experiences.

Global Connected Car Market Regional Analysis

Here is a more detailed regional analysis of the global Connected Car Market:

Asia Pacific

Asia Pacific substantially dominates the global Connected Car Market driven by the rising adoption of advanced connectivity solutions.

The Asia Pacific region has seen a rapid increase in the adoption of high-end and cost-effective connectivity solutions for connected cars. This growth is driven by factors such as the availability of affordable 5G networks, the expanding Internet of Things (IoT) infrastructure, and the increasing penetration of smartphones in the region.

Consumers in the Asia Pacific region are increasingly demanding advanced in-vehicle connectivity features, such as real-time traffic updates, voice-controlled infotainment systems, and remote vehicle monitoring. This strong consumer preference is a key driver for the Connected Car Market in the region.

Governments across the Asia Pacific region have introduced various initiatives and policies to support the development of smart mobility solutions, including connected cars. For example, the Chinese government's "Made in China 2025" initiative includes a focus on promoting the integration of information technology and the automotive industry.

In addition, the Indian government's "National Electric Mobility Mission Plan" aims to increase the adoption of electric and connected vehicles.

These government-backed programs are driving the growth of the Connected Car Market in the Asia Pacific region.

Europe

Europe is anticipated to witness the fastest growth in the global connected cars market during the forecast period owing to the stringent regulations promoting connected and autonomous vehicles.

The European Union has introduced various regulations and initiatives to accelerate the adoption of connected and autonomous vehicle technologies. For instance, the EU's eCall regulation mandates that all new passenger cars and light commercial vehicles be equipped with an automatic emergency call system starting in 2018.

Additionally, the European Commission's Cooperative Intelligent Transport Systems (C-ITS) strategy aims to enable the deployment of vehicle-to-vehicle (V2V) and vehicle-to-infrastructure (V2I) communication systems. These regulatory measures have been a significant driver for the Connected Car Market in Europe.

Consumers in Europe are increasingly demanding vehicles equipped with a wide range of advanced connectivity features, such as in-car Wi-Fi, real-time traffic updates, remote diagnostics, and seamless smartphone integration. This strong consumer preference for connected car technologies has been a key driver for market growth in the region.

Global Connected Car Market: Segmentation Analysis

The Global Connected Car Market is Segmented based on Technology Type, Connectivity, Application, End-User, Communication Type, And Geography.

Connected Car Market, By Technology Type

2G

3G

4G

5G

• Satellite

Based on the Technology Type, the Global Connected Cars Market is bifurcated into 2G, 3 G, 4G, 5G, and Satellite. The 4G segment is dominant in the global connected cars market, driven by collaborations between leading technology producers and automotive manufacturers to develop advanced vehicle tracking solutions. The adoption of 4G/LTE in connected cars enables real-time applications, offering significant growth opportunities for key market players as they focus on producing vehicles with fast, reliable connectivity features.

Connected Car Market, By Connectivity

• Integrated
• Embedded
• Tethered

Based on the Connectivity, the Global Connected Cars Market is bifurcated into Integrated, Embedded, and Tethered. The integrated segment leads the global connected cars market, offering unlimited data-sharing capabilities and cost advantages over embedded and tethered systems. Major OEMs worldwide are partnering with key players to develop advanced integrated systems that ensure seamless connectivity for consumers.

Connected Car Market, By Application

• Driver Assistance
• Telematics
• Infotainment
• Mobility Management

Based on the Application, the Global Connected Cars Market is bifurcated into Driver Assistance, Telematics, Infotainment, and Mobility Management. The driver assistance segment dominates the global connected cars market, driven by advanced features like voice assistance, internet-based location searches, distance notifications, multiple map views, real-time traffic updates, and alternate route suggestions. The growth of autonomous taxis further supports this segment, offering passengers a guided, efficient travel experience and opening significant growth opportunities for key market players.

Connected Car Market, By End-User

• Original Equipment Manufacturer (OEM)
• Aftermarket

Based on the End-User, the Global Connected Cars Market is bifurcated into Original Equipment Manufacturer (OEM) and Aftermarket. The OEM segment dominates the global connected cars market, driven by advancements in uninterrupted connectivity, cybersecurity, and the integration of secure software for autonomous vehicles. OEMs are expected to maintain their market dominance as they increasingly collaborate with key players to develop high-quality, cost-effective components, further fueling growth in this segment.

Connected Car Market, By Communication Type

• Vehicle to Vehicle
• Vehicle to Infrastructure

Based on the Communication Type, the Global Connected Cars Market is bifurcated from Vehicle to Vehicle to Vehicle to Infrastructure. The vehicle-to-vehicle segment dominates in the global connected cars market, as V2V communication helps reduce traffic congestion in urban areas, enhances road safety, and improves passenger comfort. Advances in wireless technology and the growing adoption of sophisticated equipment like sensors and GPS in V2V systems are expected to support the segment's continued dominance throughout the forecast period.

Key Players

The "Global Connected Car Market" study report will provide valuable insight with an emphasis on the global market. The major players in the market are Continental AG, Robert Bosch GmbH, Denso Corporation, Harman International, Lear Corporation, Tesla, Inc., General Motors Company, Ford Motor Company, Stellantis N.V., Toyota Motor Corporation, Qualcomm Incorporated, NVIDIA Corporation, NXP Semiconductors N.V.

• This section offers in-depth analysis through a company overview, position analysis, the regional and industrial footprint of the company, and the ACE matrix for insightful competitive analysis. The section also provides an exhaustive analysis of the financial performances of mentioned players in the given market.

Our market analysis also entails a section solely dedicated to such major players wherein our analysts provide an insight into the financial statements of all the major players, along with product benchmarking and SWOT analysis. The competitive landscape section also includes key development strategies, market share, and market ranking analysis of the above-mentioned players globally.

Global Connected Car Market Key Developments

• In July 2024, Wind River, a global leader in intelligent edge software delivery, announced that Tata Elxsi, a global leader in technology and design services, will use Wind River Studio Developer to speed up its DevSecOps process.
• In July 2024, The BMW Group announced strategic collaboration with Eclipse Foundation's Software Defined Vehicle (SDV) Working Group beginning. The Eclipse SDV Working Group promotes global collaboration on open-source software technology for modern cars.