Connected Car Market

Connected Car Market Size

Connected Car Market is projected to exhibit a Compound Annual Growth Rate (CAGR) of 16.1% during the forecast span from 2024 to 2034. In 2023, the market size was assessed at USD 64.3 billion and is projected to reach USD 333.4 billion by the completion of 2034.

Connected car is an automobile equipped with internet connectivity and several sensors that allow data to be exchanged with external networks and infrastructure. These vehicles provide various functions, such as real-time navigation updates, remote diagnostics, software updates, vehicle tracking, and interaction with smart home devices. Connected automobiles use the Internet of Things (IoT) to improve driver and passenger safety, along with convenience. They offer services such as predictive maintenance,  customized entertainment, and self-driving capabilities. However, high connectivity creates concerns about cybersecurity, data privacy, and vulnerability to hacking. Consequently, with fresh innovations in technology, connected cars are expected to transform transportation by introducing safer and interconnected mobility options. Besides, resolving security and privacy concerns remains crucial to ensure the vast acceptance and smooth integration of connected car technologies.

Market Highlights

Connected Car Market is poised for a healthy expansion, projected to achieve a compound annual growth rate (CAGR) of 16.1% between 2024 and 2034

Connected Car Market is expected to reach USD 333.4 billion during the forecast period, owing to rising consumer demand for advanced vehicle functionalities and the continuous evolution of automotive technology. This growth is attributed to several factors such as the expansion of IoT devices, combined with innovations in artificial intelligence & machine learning and the growing adoption of autonomous vehicles. The connected car market is shaped by significant trends such as the integration of 5G connectivity, the development of advanced in-vehicle infotainment systems, and the introduction of connected car platforms that offer diverse services. In addition, major industry players are strategically pursuing partnerships and acquisitions to enhance their market presence and technological capabilities. Furthermore, regulatory measures that are aimed at improving the safety and environmental sustainability of vehicles are positively influencing the market trajectory, thereby promoting innovation and investment in connected car technologies.

Source: Fatpos Global

Connected Car Market Segmentation

Driver Assistance segment will dominate due to its importance in improving the safety and convenience of users

Connected Car Market is divided based on Application into Vehicle Management, Driver Assistance, Mobility Management, Safety, Entertainment, and Others. The driver assistance segment is leading the connected car market due to its essential role in boosting safety and convenience for both drivers and passengers. In modern cars, advanced driver assistance systems (ADAS) such as automated emergency braking, adaptive cruise control, and lane departure warning are becoming increasingly desirable. These systems use a combination of sensors and radar to detect possible dangers and help drivers avoid accidents or minimize their damage. Moreover, the growing focus on regulatory measures for road safety, combined with the benefits offered by ADAS is encouraging users to adopt these technologies. Therefore, the driver assistance segment will hold a substantial market share, which highlights its crucial role in shaping automotive innovation and safety standards.

Integrated segment is projected to lead owing to easy integration into vehicles compared to other technologies

Connected Car Market is classified based on Technology into Embedded, Tethered, and Integrated. The integrated segment is anticipated to dominate the connected car market owing to its smooth integration of connectivity features directly into the vehicle, which provides a unified user experience without depending on external devices. This approach offers dependability, along with improved performance and smooth functionality. Additionally, integrated systems allow automakers to deliver multiple connected services, including navigation, infotainment, telematics, and vehicle diagnostics, without requiring any additional hardware. Moreover, integrated solutions offer flexibility for future upgrades and innovations, thereby ensuring the long-term relevance of connected cars in a rapidly changing technological environment. Thus, such preference for integrated solutions among consumers and automakers highlights their benefits and makes the integrated segment a leader in the connected car market.

Source: Fatpos Global

Market Dynamics

Growth Drivers

Standards and Regulatory Support are Anticipated to Encourage Market Expansion

Regulatory support and well-established procedures are important growth catalysts for the connected car market. Governments across the world are formulating policies that are aimed at improving the safety of connected vehicles, in addition to environmental friendliness and other features of connected cars. These policies provide accurate directives to automakers and encourage them to create advanced vehicles that are embedded with modern connectivity according to set standards. Moreover, adherence to these standards ensures the effectiveness of connected vehicles and builds consumer trust in these technologies. Besides, governments are increasingly endorsing these vehicles which creates a favorable environment for investments in research and infrastructural developments, thereby promoting growth within the connected car market.

Consumer Demand for Connected Services will Encourage the Adoption of Connected Cars

Increasing consumer demand for connected services is propelling the expansion of the connected car market. Consumers are seeking modern vehicles that are equipped with advanced connectivity features that offer better safety, combined with convenience and entertainment. Additionally, features such as real-time navigation, remote monitoring, and vehicle-to-vehicle communication, are becoming essential aspects for car buyers. This growing demand encourages automakers to invest in the development of innovative connected car technologies to meet consumer expectations and maintain a competitive edge in the market. Furthermore, the rising popularity of smart devices and digital lifestyles further increases the demand for smooth connectivity solutions in vehicles, which drives growth and shapes the future of automotive technology.

Restraints

Data Privacy and Security Concerns Can Hamper the Growth of Connected Car Market

Despite the benefits offered by connected car technologies, concerns regarding data privacy and cybersecurity present major obstacles to market growth. The collection, retention, and transmission of sensitive information from connected vehicles creates privacy worries among consumers. In addition, the interlinked nature of connected car systems makes them susceptible to cyber threats and unauthorized breaches, which can jeopardize vehicle safety and personal data security. Thus, there’s a need to effectively tackle these concerns by implementing strict security protocols and measures. Moreover, by addressing these issues, trust can be built among consumers, which will facilitate more acceptance and integration of connected car technologies in society.

Recent Developments

• In January 2023, Bosch partnered with Cariad, the software development arm of Volkswagen Group, to develop a software platform for connected and automated vehicles. Bosch additionally launched its "Vehicle Security as a Service" (VSaaS) solution, offering cloud-based cybersecurity measures for connected cars.
• In September 2022, Continental AG acquired Elektrobit, a Finnish software company specializing in automotive software solutions, strengthening its connected car technology portfolio.
• In October 2022, Harman International Industries unveiled its next-generation "Ready for" connected car platform, offering deeper integration with Samsung Galaxy devices and advanced in-vehicle personalization features.
• In October 2023, Mobileye announced the integration of Delphi's OTP Plus technology into its self-driving car platform, highlighting its importance in connected car software updates. A year ago, Delphi Technologies launched its "OTP (Over-the-Air Programming) Plus" solution, enabling secure remote updates for connected car software.
• In April 2022, Denso partnered with Microsoft to develop a new connected car platform leveraging Azure cloud services, focusing on data management and security.

Connected Car Market

Key Players:

• Bosch
• Continental AG
• Harman International Industries, Inc.
• Denso Corporation
• Aptiv PLC
• TomTom NV
• Panasonic Corporation
• Delphi Technologies
• Visteon Corporation
• NVIDIA Corporation
• Intel Corporation
• Qualcomm Technologies, Inc.
• Verizon Communications Inc.
• Ford Motor Company
• General Motors Company
• Other Prominent Players (Company Overview, Business Strategy, Key Product Offerings, Financial Performance, Key Performance Indicators, Risk Analysis, Recent Development, Regional Presence, SWOT Analysis)

Regional Analysis

Connected Car Market is segmented based on regional analysis into five key regions: North America, Latin America, Europe, Asia Pacific, and the Middle East and Africa.  The Asia Pacific region will lead the Connected Car Market due to its expansive and fast-moving automotive sector, which is fueled by urbanization and expanding middle-class populations. Governments across countries like China, Japan, and South Korea are actively promoting smart transportation initiatives, including connected cars, as part of their digitalization goals. Moreover, Asia Pacific has world-renowned technology firms in the telecommunications and software development sector, which are responsible for innovating exceptional connected car solutions and encouraging innovations in the automotive sector.

Concurrently, North America is expected to closely follow the Asia Pacific region due to its strong automotive market and a culture of embracing innovations. Besides, major players like Tesla, General Motors, and Google's Waymo are heavily investing in connected car technologies, which is evident in their products like Tesla's Autopilot and General Motors' OnStar service. Therefore, with growing consumer demand and progress in technological capabilities, North America will emerge as a major contender in the global connected car market during the forecasted period.

Source: Fatpos Global

Impact of Covid-19 on Connected Car Market

COVID-19 pandemic had a notable impact on the connected car market as it presented a blend of challenges and opportunities. Initially, the market experienced a downturn as lockdown measures and economic uncertainties resulted in low consumer spending and disrupted supply chains. This caused a slowdown in automotive production and sales, which impacted the integration of connected car technologies into new vehicles. Moreover, travel and mobility restrictions had an immediate impact on the demand for certain connected car features like navigation and in-car entertainment. However, the pandemic also accelerated certain trends within the industry. For instance, with the surge in remote work and online activities, there was high interest in connected car features that provide remote diagnostics and in-car connectivity for virtual meetings and entertainment. Consequently, while COVID-19 initially presented challenges, it also served as a catalyst for innovation and adaptation within the connected car market.

Connected Car Market is further segmented by region into:

• North America Market Size, Share, Trends, Opportunities, Y-o-Y Growth, CAGR – United States and Canada
• Latin America Market Size, Share, Trends, Opportunities, Y-o-Y Growth, CAGR – Mexico, Argentina, Brazil, and Rest of Latin America
• Europe Market Size, Share, Trends, Opportunities, Y-o-Y Growth, CAGR – United Kingdom, France, Germany, Italy, Spain, Belgium, Hungary, Luxembourg, Netherlands, Poland, NORDIC, Russia, Turkey, and Rest of Europe
• Asia Pacific Market Size, Share, Trends, Opportunities, Y-o-Y Growth, CAGR – India, China, South Korea, Japan, Malaysia, Indonesia, New Zealand, Australia, and Rest of APAC
• Middle East and Africa Market Size, Share, Trends, Opportunities, Y-o-Y Growth, CAGR – North Africa, Israel, GCC, South Africa, and Rest of MENA

Connected Car Market Scope and Segments:

Frequently Asked Questions (FAQ):