Global Statistics Representing Connected Car Market Scenario
A connected car consists of devices that communicate with other devices within and outside the car. It allows the driver to keep the car connected with the online platform, thereby promoting real-time communication with the outside world. Increasing technological advancements in connected devices are pervasive across numerous industries with the evolution of Internet of Things, artificial intelligence, machine learning, data analytics, and communication technology. Rise in the demand for connectivity solutions, awareness, and adaptability of embedded solutions for a safer, comfortable, and convenient lifestyle drives the connected car market.
As per IoT Analytics, a market insight provider for IoT, the number of connected devices worldwide was about 17 billion in 2018, and it is estimated to reach 34 billion by 2025. The automobile segment with connected devices comprises around 10% of the market, which will subsequently foster the growth of connected cars in the near future. However, the high cost of hardware for connected cars limits market growth to an extent. Nevertheless, the growing demand for services and products that enrich driving experience and strengthen security is creating potential opportunities for market growth.
The global connected car market was valued at USD 72.8 billion in 2017 and is expected to grow at a CAGR of 12.9% during the forecast period, 2019–2026.
The global connected car market is segmented by service, technology, and connectivity solution. Based on service, the connected car market is segmented into navigation, telematics, infotainment, and others. Telematics technology holds the largest share of the global connected car market. Telematics combines telecommunication and vehicle informatics, allowing the vehicle to share data with the outside world.
Based on technology, the connected car market is segmented into 2G, 3G, 4G, and others. The 4G/LTE technology holds the largest share of the connected car market, with the growing demand for fast and advanced technologies. 4G technology allows the driver to connect and share critical information as well as update the emergency service provider faster as compared to the other commercial technologies in the market. Therefore, the demand for 4G technology is increasing in the connected cars market.
Based on connectivity solution, the connected car market is segmented into integrated, embedded, and tethered. The embedded connectivity solution segment is experiencing positive market growth. European and North American luxury brands are opting for embedded SIM cards, which are embedded along with the cars’ communication module. Embedded technology provides OEMs the flexibility to differentiate from their competitors, thereby boosting market growth.
Geographically, the connected car market is segmented into North America, Europe, Asia Pacific, and LAMEA.
North America is in the initial phase, with connected and autonomous vehicles gradually gaining popularity to overcome the problems of increasing pollution, depletion of natural oil and fossil fuel reserves, and rising crude oil prices. Being an early adopter of systems with huge technological investments, North America has achieved its early prominence in vehicle automation and internet of things market. Smartphone penetration in the region is above 90%. Additionally, many automotive manufacturers are increasing convenience to make the driving experience safer, secure, and more comfortable. For instance, connected cars were deliberately included in Cisco’s well-known “50 billion by 2020” prediction, which means that 50 billion devices will be connected to the internet by the year 2020. Additionally, various government organizations have already started collaborating with connected car manufacturers for replacing conventional transport vehicles with electric transport vehicles in the future to reduce the emission of greenhouse gases and overcome the dependency on traditional fuels.
Currently, Europe is the second largest market for connected cars and is estimated to outpace North America during the forecast period. The pace of this progress indicates the presence of favorable government regulations, targetting public interest, and innovation. However, the dispute between car manufacturers and telecoms operators is heating up. Before long, the European Commission is set to conclude the legislation regarding the manufacturing of connected cars, whether automakers will need to rely on Wifi or wireless 5G technology to build internet-connected vehicles. The policy will be the roadmap for the connected car market in Europe.
Asia-Pacific is experiencing positive growth in the connected car market. The regional market is driven by the increasing efforts of Chinese players regarding the development of connected car technology. The Japanese government is also working vigorously towards gaining a competitive edge in the connecting car market. According to Atkins Corporate, more than 700,000 road accidents fatalities occur in Asia each year, representing approximately 60% of the global fatalities. The vehicle population of Asia is forecast to reach 1 billion by 2035. All these factors are contributing to the growing need for connected cars in the region. Additionally, owing to the widespread deployment of connected cars in China, the APAC region is anticipated to witness promising growth in the region during the forecast period. LAMEA holds the smallest share in the global connected car market.
Some of the prominent players in the market are Alpine Electronics (Japan), Bosch (Germany), BMW (Germany), Continental (Germany), Delphi Automotive (Japan), Ford Motor (U.S.), NXP Semiconductors (Netherlands), Audi (Germany), Google (U.S.), and Mercedes-Benz (Germany).
Connected Car Market Segmentation
By Connectivity Solution
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