Automotive Embedded System Market Size, Share & Trends Analysis Report By Type (Embedded Software, Embedded Hardware), By Vehicle Type (Passenger Cars, Two-Wheelers, Commercial Vehicles), By Component (Transceivers, Sensors, Memory Devices, Microcontrollers), By Application (Infotainment & Telematics, Body Electronics, Safety & Security, Powertrain & Chassis Control, Others) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2024-2032

Market Overview

The global automotive embedded system market size was valued at USD 5.32 billion in 2017 and is expected to grow at a CAGR of 8.1% over the forecast period 2019–2026.

An automatic embedded vehicle management system can monitor vehicle maintenance, theft, location, and condition data. Due to locality restrictions for sensors and actuators and the growing complexity of the electronic architectures embedded in vehicles, the automotive industry is forced to use a distributed approach to implement a set of functions. The approach taken by the vehicle manufacturer and the system supplier will determine the design process for an electronically embedded system. The development of infotainment systems that offer better safety features, entertainment options, and additional functionality has been made possible by the evolving mobility industries. A safe, enjoyable, and helpful driving experience is made possible by car infotainment systems, which are the focus of the future of in-car entertainment.

An electronic or computer system specifically created to control and access data of an electronic-based system installed in vehicles is known as an automotive embedded system. This system includes an application-specific integrated circuit, a single-chip microcontroller like the cortex, advanced RISC machines (ARM), microprocessors, field programmable gate arrays (FPGAs), and digital signal processors (DSPs) (ASICs). These embedded systems are used in various functions, including audio, security, and ignition systems. Over the past two decades, the automotive industry has adopted more sophisticated embedded systems than ever.

Market Dynamics

What Are the Key Factors Driving Industry Growth?

Increasing Demand for Comfort and Safety

Stringent regulations regarding airbags have fueled the deployment of embedded systems in the automotive industry, electronic brake force distribution (EBD), tire pressure monitoring systems (TPMS), antilock braking systems (ABS), and other safety features around the world. To increase driver and passenger safety through dashboard warning systems, the Transportation Recall Enhancement, Accountability, and Documentation (TREAD) Act of 2008 mandated the deployment of suitable tire pressure monitoring system (TPMS) technology in all passenger vehicles. The TREAD Act states that the European Union has mandated TPMS in all passenger car models since November 1, 2012. All passenger cars must now have airbags and an ABS, thanks to the U.S. Highway Safety Act of 1991. The automotive embedded systems market is anticipated to grow due to the need for embedded technology in these systems for effective operation.

The Rise in Demand for Power-Efficient and Smarter Automobile

The auto industry requires these systems due to the rising demand for smarter cars and power-saving automotive technology. During the anticipated period, this demand will support the growth of the automotive embedded market. Reliability, adaptability, power, speed, accuracy, and efficiency are qualities that automotive embedded systems possess. A vital role for embedded systems in smart products. Therefore, the increasing demand for these devices drives the market for automotive embedded systems. Additionally, the market growth has been aided by increased demand for portable computing devices and multimedia products like parking sensors and GPS in the automotive industry. The automotive embedded market has been boosted in recent years by an increase in the adoption of electric vehicles, a shift in the focus on the safety features of vehicles, and the growing electrical hybridization of vehicles. Over the anticipated period, these factors are anticipated to drive the market.

What Are the Challenges for the Automotive Embedded System Market?

Rise in Security Concerns with Connected Technology

Several presumptions are made regarding the security of embedded devices, including that they are not susceptible to cyberattacks, that they are not desirable targets for hackers, and that encryption and authentication provide sufficient security. In contrast to standard PCs, embedded systems are created to carry out specific tasks. Due to the lack of additional processing resources, these devices typically use less memory and fewer processing cycles. Because of this, PC-specific security solutions cannot resolve the security issues faced by embedded devices. In actuality, most embedded devices won't work with PC security programs. Most embedded systems do not receive routine security updates. Once the embedded device is in use, it continues to operate for years or even decades using the software that came with it. Since the embedded operating system might not have automated capabilities to allow simple firmware updates that ensure embedded security, a capability to allow security updates needs to be built into the device if the device needs a remote software update.

What Are the Future Opportunities for Automotive Embedded Systems?

Rise In Demand for Electric Vehicles

The global market for automotive embedded systems is expected to grow faster than other markets due to rising demand for electric vehicles and embedded system adoption in hybrid and electric vehicles due to their ability to increase efficiency and lower emissions. The demand for E.V.s is expected to increase globally, and the adoption of embedded systems in electric and hybrid vehicles is expected to increase due to these vehicles' capacity to cut pollution and increase efficiency. These factors are anticipated to fuel growth in the global automotive embedded systems market over the forecast period. Increasing consumer focus on vehicle safety features, rising automation in the automotive industry, and government initiatives to reduce emissions and improve fuel efficiency are anticipated to support the expansion of the automotive embedded system market over the forecast period. Additionally, the market is expected to grow in the coming years due to rising demand for connected cars and increased demand for sensors and engineering systems in vehicles.

Regional Analysis

The global automotive embedded system market is bifurcated into four regions: North America, Europe, Asia-Pacific, and LAMEA.

Asia Pacific Dominates the Global Market.

Asia Pacific is the most significant shareholder in the global automotive embedded system market and is expected to grow at a CAGR of 6.7% during the forecast period. China, India, Japan, Australia, and the rest of Asia-Pacific are all included in the analysis of the Asia-Pacific automotive embedded system market. Because of rising income levels and increased vehicle production in developing nations like China, as well as growing electric vehicle parc in nations like Japan. With a total of 29,015,434 manufactured vehicles, China leads the world in terms of vehicle production rate, followed by Japan, India, South Korea, and then. The increasing use of electric vehicles in Japan will likely increase software adoption. Similar to China, India is anticipated to proliferate due to government support for the auto industry. The Indian government's Automotive Mission Plan seeks to triple exports and industry revenue.

North America is expected to grow at a CAGR of 8.1% during the forecast period. North America's automotive embedded system market analysis includes the U.S. and Canada. Due to the nation's automotive industry's rapid technological advancement, the U.S. is anticipated to reap the most significant financial benefits. The country's tightening safety laws and regulations may also increase demand for the software. The automotive industry in Europe is experiencing rapid technological advancements. The region's automakers are also very interested in the market for electric vehicles. This will probably increase consumer interest in the market for vehicle-embedded software due to the advanced technologies and strategies by major players and the dynamic growth of the automotive and manufacturing sectors in developed nations like the U.S. and Canada.

Segmental Analysis

The market is segmented by type, vehicle type, component, and application

Based on type, the global market is bifurcated into embedded software and hardware.

The embedded software segment is the highest contributor to the market and is expected to grow at a CAGR of 7.22% during the forecast period. Drivers can record scalable data using embedded software in their cars to gain valuable insights into how well their vehicles are performing and how they are behaving. Automotive software solutions embedded in vehicles aid in predicting maintenance needs and preventing collisions. Additionally, the rise of connected cars is pressuring automakers to enhance their embedded automotive software development skills to bridge the gap between a vehicle and a mobility ecosystem, further enhancing vehicle performance based on in-vehicle and beyond-vehicle data.

Based on vehicle type, the global market is bifurcated into passenger cars, two-wheelers, and commercial vehicles.

The passenger cars segment is the highest contributor to the market and is expected to grow at a CAGR of 7.56% during the forecast period. The factors are related to the worldwide increase in the demand for passenger vehicles. The demand for passenger vehicles is particularly rising in developing countries like China and India, which has accelerated the segment's growth over the anticipated period. The causes range from simple driver inattention to fatigue, callousness, and drunk driving. Simple sensors integrated with features like automatic collision notification, vehicle security, and speed control can be installed inside vehicles, providing the impetus for an effective road safety system.

Based on components, the global market is bifurcated into transceivers, sensors, memory devices, and microcontrollers.

The sensors segment is the highest contributor to the market and is expected to grow at a CAGR of 7.82% during the forecast period. A combination of hardware and software called automotive multimedia and integrated systems (MIDS) provides audio or visual entertainment. The central in-car entertainment systems compatible with radio players and cassette or CD players include automobile navigation systems, video players, USB, Bluetooth connectivity, carputers, in-car internet, and Wi-Fi. In addition to standard dashboard knobs and dials, the ICE systems can now include steering wheel audio controls, hands-free voice control, touch-sensitive pre-set buttons, and touch displays on higher-end devices.

Based on application, the global market is bifurcated into infotainment & telematics, body electronics, safety & security, powertrain & chassis control, and others.

The safety & security segment is the highest contributor to the market and is expected to grow at a CAGR of 7.63% during the forecast period. During the forecast period, the Safety & Security segment is anticipated to have the highest CAGR. The factors that have fueled the market's expansion include the requirements for installing safety features like airbags and anti-lock braking systems (ABS) in vehicles. During the forecast period, the infotainment & telematics segment is expected to grow at a significant CAGR.

Impact of covid-19

The pandemic led to a temporary lockdown of the nations, which on a wide scale hindered the verticals of businesses and the industry. The automobile industry, which primarily involves outdoor jobs, has been poorly exposed to the challenges that have contributed to a dramatic decrease in car sales. Furthermore, the instability of the supply chain market mainly due to the closing of national and foreign borders and the adherence to the decision not to use Chinese produced products hampered the growth of the market. However, the considerable spike seen in the sale of the automotive vehicle to limit the usage of public and crowded places may positively affect the growth of the market in the upcoming years.

Recent Developments

• October 2022, For the AURIX TC4x microcontroller from Infineon Technologies, Elektrobit has announced the first automotive grade, embedded, real-time operating system and hypervisor. OEMs and tier 1 companies can more easily develop and deploy automotive E/E architectures based on the AUTOSAR Classic standard thanks to the EB tresos AutoCare OS and new EB tresos embedded hypervisor.
• October 2022, According to the National Highway Transportation Safety Administration, there were over 38,000 car accidents in the US in 2015; roughly 95% of those accidents resulted from human error. Longtime proponents of automated driving systems have argued that eliminating human error and improving driving safety will be made possible by automated driving technology.