Connected Car Market Size, Share & COVID-19 Impact Analysis, By Application Type (Mobility Management, Telematics, Infotainment, and Driver Assistance), By Network Type (3G, 4G, 5G, and Satellite), By Technology Type (Embedded, Tethered and Integrated), By Sales Channel Type (OEM and Aftermarket), By Communication Type (Vehicle to Vehicle and Vehicle to Infrastructure) and Regional Forecasts, 2021-2028

The global connected car market size was valued at USD 55.56 billion in 2020 and is projected to grow from USD 59.70 billion in 2021 to USD 191.83 billion in 2028, exhibiting a CAGR of 18.1% during the forecast period. The Asia-Pacific dominated the connected car market with a share of 59.21% in 2020.

The global impact of COVID-19 has been unprecedented and staggering, with the market witnessing a negative demand shock across all regions amid the pandemic. Based on our analysis, the global market exhibited a huge decline of -12.1% in 2020. The sudden rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.

Connected cars are vehicles that are connected to smartphones and tablets and are equipped with internet access, as well as have the ability to optimize their operations at regular intervals. It can share content with a series of devices inside and outside the car environment through the network connection. The vehicle's data are shared with the help of RADAR, LiDAR, and advanced sensors. In recent years, car manufacturers have developed advanced connectivity solutions such as vehicle 2 vehicle (V2V) and vehicle to infrastructure (V2I) systems. Vehicles connected to various devices help enhance their safety as the driver receives real-time data of the vehicle's surroundings. The primary aim of the adoption of connected vehicles is to avoid collisions, reduce fatalities, and make vehicle management more efficient.

COVID-19 Outbreak to Accelerate the Shift towards Connected Cars

In the short term, uncertainty in new sales will continue as lockdowns continue sporadically, leading to reduced vehicle usage. The semiconductor shortage, which has already led to several production halts for major manufacturers, will further reduce sales. However, despite funds crunch, demand for private means of mobility continues to increase, leading to a sharp rise in second-hand purchases. This will help to offset the reduced sales partially.

Companies across the automotive value chain can focus on improving connectedness across their services and products. For instance, a shared mobility provider can offer connected services in its vehicles such as contact tracing to improve customer confidence. This ensures the hygiene and cleanliness of the vehicles and makes it possible to track and stop the spread of the disease.

Additionally, by increasing collaborations with solution providers and partners, automotive OEMs are optimizing their R&D spending to prioritize connected vehicle programs. For instance, in February 2021, Ford and Google announced a unique strategic partnership to accelerate Ford's transformation and reinvent the connected vehicle experience. As part of this new, six-year partnership, beginning in 2023, Android will power millions of future Lincoln and Ford vehicles at all price points, with built-in Google apps and services.

Hence, COVID-19 will positively accelerate the shift to connected vehicles as connected experiences become the focal point in personal mobility.

LATEST TRENDS

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Installation of Cybersecurity Systems to Lead the Connected Car Market Trends

The growing adoption of cybersecurity solutions in-car safety systems is a major trend in this market. In recent years, data has become one of the vital factors in the automotive industry. In connected vehicles, the user's smartphone is synced with the car's infotainment system. The user's data might consist of bank and medical details, which face a high probability of getting hacked. Tech giants such as Google and Apple are developing vehicle cybersecurity apps in order to prevent data from getting stolen. These apps are highly user-friendly, monitor the vehicle's security, and notify the user if any stranger logs in from other devices. For example, DENSO entered into a joint development agreement with Dellfer to develop ZeroDayGaurd 1.0, a cybersecurity product for the automobile sector.

DRIVING FACTORS

Growing Inclination of Consumers towards Anti-Theft Systems to Drive the Market

An increasing number of vehicle thefts are drawing the attention of car buyers to surveillance systems that can monitor their vehicles and send timely updates about their geographic location. Once the mobile is connected to the vehicle's infotainment system, it keeps a record of the passenger's travel history or the location of the passenger's last travel spot, how many halts there have been in between, etc., which can make travel unsafe. In order to prevent data theft, car-owners have started to equip their vehicles with devices such as TravelEyes2, ProScout, and LoJack. These systems send a notification to the owners' mobile phones, enabling them to lock the car with one touch.

Additionally, regulatory bodies have imposed stringent norms to curb the rising instances of data theft. For instance, Thales has partnered with the PSA Group (makers of Citroen and Peugeot) to identify the security threats and to develop a technique to identify these risks and take the necessary precautions to keep the vehicle safe and secure. In response, automotive manufacturers recognize the exigency of the situation and are actively working with professionals in this sector.  

Increasing Adoption of Advanced Driver Assistance System (ADAS) to Fuel the Market

The rising adoption of ADAS is expected to drive the connected car market growth over the forecast period. The rapid adoption of software algorithms, sensors, cameras, processors, and advanced technologies in mapping road obstacles has improved the applicability of ADAS in vehicles, which is also expected to reduce road fatalities. For example, according to the Road Safety report launched by the World Health Organization in 2018, the number of road fatalities has reached 1.35 million across the world.

Governments have also imposed stringent safety norms on automotive manufacturers to develop vehicles equipped with ADAS features amid growing concerns regarding the safety and security of passengers. For example, in 2013, under the Federal Motor Vehicle Safety Standard (FMVSS), the National Highway Traffic Safety Administration (NHTSA) of the US made it mandatory to equip Anti-lock Braking System (ABS) in all vehicle segments. Similarly, in 2015, the European Commission (EC) made it mandatory to install an e-call system from April 2018 in all new vehicles, which is one of the most vital features of connected vehicles.

RESTRAINING FACTORS

Lack of Connectivity Infrastructure to Restrain Growth

As network connections on highways are restricted, vehicles cannot connect to the cloud. Compared to developed countries, the development of connected vehicles infrastructures in developing economies is lower. Uninterrupted 3G and 4G networks are available mostly in urban areas. This is a major factor that is expected to restrain the market's growth over the forecast period. For example, there are more than a million mobile users in India, but there is a huge lack of 4G data networks in rural areas.

SEGMENTATION

By Application Type Analysis

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Driver Assistance Segment to Dominate the Market

As per the market forecast, the driver assistance segment is anticipated to dominate the market during the forecast period. Advanced driver assistance system consists of technologically advanced features such as adaptive cruise control, lane keep assist, 360 view camera, park assist, etc., that enhance the vehicle's safety. Various governments across the globe have imposed stringent safety norms on automotive manufacturers. For example, in April 2020, the Indian automotive industry adopted the BS-VI specification, which includes reverse parking sensors in all vehicle segments.

The mobility management segment holds the second-largest position in the market. This system enables the driver to reach the destination safely in the shortest time and with the most efficient fuel consumption. It also offers vital information such as extreme weather and road conditions and real-time alternative routes to avoid external hazards, ensuring a superior driving experience.

The vehicle telematics segment is anticipated to achieve considerable growth in the market. The increasing IT infrastructure along highways that can seamlessly connect to mobile networks is expected to drive the demand for connected telematics solutions during the forecast period.

The infotainment system segment is also anticipated to show good growth over the forecast period. In recent years, infotainment systems have become one of the most vital components of vehicles. As a result, automakers are increasingly installing infotainment features such as Wi-Fi hotspots, social media access, smartphone interfaces, and advanced mobile office platforms in their products.

By Technology Type Analysis

Integrated Segment to Hold the Largest Market Share

Based on technology type, the market is segmented into embedded, tethered, and integrated systems. The integrated segment is expected to dominate the market over the forecast period. These systems provide unlimited data sharing possibilities and are cost-effective compared to embedded and tethered systems. Key OEMs across the globe have partnered with various key players to develop advanced integrated systems for connected vehicles that provide seamless connectivity to consumers. For example, Ford partnered with Geotab to develop a telematics solution for Ford vehicles.

The embedded segment is expected to occupy the second-largest position in the market. Factors such as cost optimization of service plans, cloud services, and governmental regulations are expected to help its leading position in the market. In addition, key features such as remote diagnostics and eCall systems cannot function without an embedded system. Hence, the rising adoption of embedded systems is expected to fuel the adoption of connected vehicles over the forecast period.

By Network Type Analysis

5G Segment to Lead Market Share

Based on network type, the market is segmented into 3G, 4G, 5G, and satellite. The 5G segment is anticipated to dominate the market during the forecast period. Several telecommunication companies are developing advanced 5G networks for better communication between connected vehicles and external devices. According to the 5G Automotive Association, more than 60% of road accidents can be avoided with the help of a seamless 5G network. For instance, South Korea and the EU have partnered to develop a 5G network for local projects by investing more than USD 1.5 billion. This is expected to curb the rising number of road accidents.

The satellite segment is expected to be the fastest-growing segment over the forecast period. Cellular and Wi-Fi networks support connected vehicles only in areas where mobile towers are present, only in urban areas. Once the vehicle leaves the boundary of the mobile tower, the network gets completely cut off, which may cause serious problems for the occupants in the connected vehicles. Various automotive OEMs, satellite operators, and mobile operators focus on developing hybrid satellite-terrestrial networks to overcome this problem, which would offer uninterrupted connectivity. Hence, the increasing demand for satellite and 5G networks is expected to drive the connected car industry.   

By Sales Channel Type Analysis

OEM Segment to Hold the Largest Market Share

Based on the sales channel, the market is segmented into OEM and aftermarket. The OEM segment holds the largest share of the global market. Increasing technological developments such as uninterrupted connectivity, cybersecurity, and the development of driverless vehicles integrated with highly secure software are anticipated to aid the dominance of OEMs during the forecast period. In addition, increasing partnerships with key players to develop high-quality and cost-effective components is another reason that is fueling the growth of the OEM segment.

By Communication Type Analysis

Vehicle 2 Vehicle (V2V) Segment to Hold the Largest Market Share

The market is categorized into Vehicle to Vehicle (V2V) and Vehicle to Infrastructure (V2I) based on communication type. The V2V segment is expected to dominate the market over the forecast period. Vehicle-to-vehicle communication helps reduce traffic congestion in large cities, enhances road safety, and augments the comfort of the occupants. Developments in wireless technologies and the increasing usage of advanced equipment such as sensors and GPS in V2V systems are anticipated to maintain the segment's dominance over the forecast period. For example, in June 2017, Cadillac equipped the world's first vehicle to vehicle communication (V2V) in its CTS sedan along with the development of vehicle-to-infrastructure communication in Michigan.

The Vehicle to Infrastructure segment is expected to show good growth during the forecast period. Increasing government initiatives to develop a V2I framework ensures the stable growth of the segment in the market.

REGIONAL INSIGHTS 

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Based on region, the market is segmented into North America, Europe, Asia Pacific, and the Rest of the World. The Asia Pacific region is expected to dominate the connected car market share owing to the increasing adoption of high-end and cost-efficient connectivity solutions. In addition, consumer demand for in-vehicle embedded connectivity systems and the increasing shift towards connected cars has propelled the growth of connected vehicles in this region.

Europe is expected to be the second-largest region in this market due to the numerous development projects undertaken by governments across the continent and major key players in this region. Growing partnerships and collaborations among the key market players have led to the early adoption of advanced technologies. For example, in January 2017, Parkopedia and Volkswagen launched high-definition autonomous driving (HAD) Parking Maps to provide their customers with detailed information about parking spaces.

North America is expected to grow steadily in the connected cars market over the forecast period. The growing adoption of advanced technologies such as 5G connectivity will help North America showcase healthy growth.

KEY INDUSTRY PLAYERS

TomTom International is a Key Player in the Market

TomTom International is a major player in the global market. Deployment of a wide range of advanced connectivity solutions, development of self-driving vehicles for intelligent transportation, and safe mobility management are the company's key aims. Also, the constant R&D efforts by the company are leading to the creation of innovative technologies, which are some of the prominent factors responsible for the dominance of the company.

LIST OF KEY PLAYERS PROFILED:

• Harman International (Connecticut, United States)


• Continental AG (Hanover, Germany)


• AT&T (Texas, United States)


• Robert Bosch GmbH (Gerlingen, Germany)


• Daimler AG  (Stuttgart, Germany)


• Audi (Ingolstadt, Germany)


• TomTom Inc. (Amsterdam, Netherlands)


• General Motors (Michigan, United States)


• Ford Motor Company (Michigan, United States)


• HYUNDAI MOTOR GROUP (Seoul, South Korea)


• Volvo (Gothenburg, Sweden)

KEY INDUSTRY DEVELOPMENTS:

• June 2021 - Payment24 launched ‘vehicle biometrics’ for smart and faster refueling Payment24, leading Fuel management and payment solutions provider launched a smart refueling solution with biometric features for connected cars. The module enables automated fuel approval and payment deduction as the registered vehicle enters the fuel station. The service is anticipated to considerably reduce fueling frauds and wastage.


• June 2021 – Garrett Motion Inc. Collaborates with Hyundai Motor Company  Differentiated technology provider Garrett Motion Inc. launched Model-based Predictive Control (MPC) software in collaboration with Hyundai Motor Company, the software shall provide innovative vehicle health management solutions.


• September 2019 – Harman Partnered with Spotify to Develop Advanced Connected Technologies Harman International partnered with Spotify to develop advanced connected technologies for the automotive and consumer electronics industries. This partnership represents the next phase of Harman's long-term partnership with Spotify, which enables Spotify to extend its consumer electronics affiliation into the fast-expanding automotive market.


• February 2018 – TomTom Launched TomTom Audio Traffic TomTom Company launched "TomTom Audio Traffic"- a personalized traffic information system that conveys traffic-related information to the driver through a voice tool. This feature provides the driver with accurate and personalized traffic information about the route ahead.

REPORT COVERAGE

An Infographic Representation of Connected Car Market

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The global connected car market report provides a detailed analysis of the market and focuses on key aspects such as leading companies, product types, and leading product applications. Besides this, the report offers insights into the current market trends and highlights key industry developments. In addition to the factors above, the report encompasses several factors that have contributed to the growth of the market over recent years.

Report Scope & Segmentation