Why is Introduction of Connected Cars Driving Automotive Software Market?

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Automotive Software Market Overview

The global automotive software market is predicted to reach a value of $78,894.2 million by 2030. Increasing from $28,214.6 million in 2016 advancing at a 12.4% CAGR during the forecast period (2020–2030). On the basis of software, the market is divided into OS and middleware, ADAS and autonomous driving (AD), body & energy, infotainment, connectivity, security, & connected services, and powertrain & chassis. Out of these, the ADAS and AD division accounted for the largest share of the market in the past.

Owing to urbanization the demand for connected cars has increased significantly over the past few years. Take for instance the connected car market, which reached a value of about $72.5 billion in 2019. The demand for these cars is major increasing because of the surging concerns regarding security and safety, introduction of IoT in the automotive industry, and need for improved driving experience. IoT provides a number of advanced connectivity solutions and infotainment services for drivers.

Ascribed to this rising demand for connected cars, the automotive software market is registering significant growth as well. Automotive software include a number of requirements, such as cyber security, safety, performance, usability, and adaptability. It cover a wide array of applications from embedded real-time firmware to secured cloud solutions. The introduction of advanced technologies for improved user interface is also a major factor that is leading to the growing need for automotive software.

Automotive Software Market Size

In addition to making vehicles more technically capable, it is important to design technologies in such a way that they are more human and personal. For example Model S by Tesla Inc. has some physical controls near or on the steering wheel, while majority of secondary function do not have any designated physical control. These functions can be accessed via a 17 inch touchscreen display that is placed on the dashboard of the vehicle. Interfaces like these need software for technology integration, which is leading to the growth of the market.

Technologies such as automatic braking, lane assist, and ADAS considerably improve the driving experience, thereby making it safer than ever. These technologies further aid in decreasing traffic rule violations, which, in turn, leads to decline in the road accidents and improvement of the driver experience. Moreover, various companies are taking up R&D activities for deploying autonomous car that are majorly dependent on this software. These efforts for deploying ADAS and AD is positively impacting the market.

Geographically the Asia-Pacific region held the major share of the automotive software market during the historical period (2014–2019), according to a P&S Intelligence report. The region is the major market for vehicles, along with which, the advancing economy. Increasing purchasing power of customers is leading to growing need for advanced features in vehicles. The rising integration of advanced application, including auto-park assist, human-machine interface. Keyless entry, are creating need for automotive software in the region.

Hence, the market is growing due to the rising deployment of connected cars and technological advancements for enhancing user interface.

Automotive Software Market Share

According to a report by P&S Intelligence, the global automotive software market is predicted to reach a value of $78,894.2 million by 2030. Progressing at a 12.4% CAGR during the time period 2020–2030. The market is registering growth due to the rising research and development for autonomous driving. Increasing requirement for connected cars, and emergence of innovative user interface technologies. The current COVID-19 outbreak through, is projected to have negative impact on the market, as various manufacturing facilities have been shut down.

When vehicle type is taken into consideration, the automotive software market is divided into commercial vehicle and passenger car. Between these two, the commercial vehicle division is expected to register the higher CAGR in the coming years, which can be attributed to the increasing requirement for telematics solutions and enhanced infotainment features for commercial vehicles.

In terms of software, the automotive software market is categorized into powertrain & chassis, operating system & middleware, body & energy, advanced driver-assistance systems (ADAS) & AD, and infotainment, connectivity, security, & connected services. Out of these, the ADAS & AD category is expected to witness the fastest growth in the years to come, which is owing to the increasing awareness regarding road and traffic safety among individuals and government bodies alike. Technologies including automatic braking and lane assist enhance driving experience and aid in preventing the violation of traffic rules.

Automotive Software Market Trends

Geographically Asia-Pacific is predicted to dominate the automotive software market in 2030. The demand for autonomous and electric vehicles in the region has been growing significantly, and these vehicles depend largely upon software. The region accounts for the largest share of the global electric vehicles market, with China leading the regional market. About 1.1 million plug-in electric cars were sold in China in 2019.

The companies operating in the automotive software market are engaging in partnerships for improving their standing in the market. For example, Arrival Ltd. signed an agreement with Blackberry Ltd. in November 2019. With the aim of using Blackberry Ltd.’s QNX technology in Arrival Ltd’s autonomous-ready commercial vehicles. Blackberry Ltd is licensing its technology to serve as a safe and secure foundation for the ADAS features within the other company’s autonomous commercial vehicle platform.

Automotive Software Market Key Players

The major players in the automotive software market include Robert Bosch GmbH, Airbiquity Inc., NXP Semiconductors N.V., Renesas Electronics Corp., Microsoft Corp., BlackBerry Ltd., NVIDIA Corp., Green Hills Software LLC, Continental AG, Alphabet Inc., Intellias Ltd., CloudMade, Connexion Telematics Ltd., Harman International Industries Inc., GlobalLogic Inc., KaaIoT Technologies LLC, NORDSYS GmbH, SAP SE, Ignite Ltd., Elektrobit Automotive GmbH, Vector Informatik, Wind River Systems Inc., Apple Inc., Sigma Software Group, Rightware Oy, Luxoft Holding Inc., AImotive Ltd., Autonet Mobile Inc., KPIT Technologies Ltd., and Saferide Technologies Ltd.

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

Market Segmentation by Software

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

Function

  • Development
  • Validation and Verification
  • Integration

Vehicle Type

  • Passenger Car
  • Commercial Vehicle

Region

  • North America
    • By software
    • By function
    • By vehicle type
    • By country – U.S. and Canada
  • Europe
    • By software
    • By function
    • By vehicle type
    • By country – Germany, U.K., France, Italy, and Rest of Europe
  • APAC
    • By software
    • By function
    • By vehicle type
    • By country – China, Japan, India, South Korea, and Rest of APAC
  • LAMEA
    • By software
    • By function
    • By vehicle type
    • By country –Mexico, Brazil, and Rest of LAMEA

This study covers

  • Major factors driving the market and their impact during the short, medium, and long terms
  • Market restraints and their impact during the short, medium, and long terms
  • Recent trends and evolving opportunities for the market participants
  • Historical and the present size of the market segments and understand their comparative future potential
  • Potential of on-demand logistics services, so the market players make informed decisions on the sales of their offerings
  • Competitive scenario of various market segments across key countries in several regions for uncovering market opportunities for the stakeholders
  • Major players operating in the market and their service offerings

P&S Intelligence

P&S Intelligence provides market research and consulting services to a vast array of industries across the world. As an enterprising research and consulting company, P&S believes in providing thorough insights on the ever-changing market scenario, to empower companies to make informed decisions and base their business strategies with astuteness. P&S keeps the interest of its clients at heart, which is why the insights we provide are both honest and accurate. Our long list of satisfied clients includes entry-level firms as well as multi million-dollar businesses and government agencies.

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