Intelligent Transportation Systems Market

Market Overview

The global intelligent transportation system market was valued at USD 28.25 billion in 2022. It is estimated to reach USD 55.54 billion by 2031, growing at a CAGR of 7.8% during the forecast period (2023–2031). The demand for ITS systems will rise due to the restricted room for transportation network growth and increased expenses brought on by congestion.

An advanced application known as an intelligent transportation system (ITS) attempts to deliver cutting-edge services linked to various modes of transportation and traffic management and to empower users to use transportation networks in a safer, more organized, and "smarter" manner. Utilizing emergency services when an accident occurs, utilizing cameras to police traffic regulations, or employing signs to indicate speed limit changes based on the situation are some of these technologies.

The European Union's 2010/40/EU directive, issued on July 7, 2010, defined ITS as systems that apply information and communication technologies to the field of road transport, including infrastructure, vehicles, and users, as well as to traffic management and mobility management, as well as for interfaces with other modes of transportation. Although ITS may refer to all modes of transportation, it was specifically mentioned in the directive as being applied to systems that manage traffic and mobility. ITS can be utilized in various contexts, such as road transportation, traffic management, mobility, etc., to increase the effectiveness and safety of transportation. Around the world, ITS technology is being used to shorten travel times and enhance capacity on congested roadways.

Market Dynamics

Global Intelligent Transportation System Market Drivers: 

Growing Need for Road Safety

One of the main causes of the increased traffic accidents is the absence of road safety and preventive measures, which can cause infrastructure damage, increase costs, and impede overall economic growth. Several government organizations are working on various projects to educate the public about the value of road safety. For instance, the 2005-launched Global Road Safety Initiative (GRSI) brings together private-sector funding to improve road safety in low- and middle-income nations. While traffic-related deaths have increased over the past few years, the expenditures associated with these deaths have also increased and may reach close to 2% of a nation's GDP. Low- and middle-income nations are most severely affected by economic development. Government officials are therefore prioritizing implementing cutting-edge traffic technology and lowering the rate of traffic accidents.

ITS solutions can make a substantial contribution to this goal. As a result, several projects are being carried out to introduce cutting-edge traffic management technologies and to increase general knowledge of road safety. The demand for vehicle-to-vehicle (V2V) and vehicle-to-infrastructure (V2I) communication is anticipated to increase due to such activities. Driver assistance systems and Electronic Stability Control (ESC) systems are required for passenger and commercial cars in developed economies in Europe and North America. Over the projected period, these requirements are anticipated to fuel demand for ITS solutions.

Growing Need for Enhanced Transportation System

Any nation's socioeconomic progress depends on an efficient transportation system. Travel time, fuel use, and vehicle emissions can all rise due to traffic congestion. According to ITS groups, ITS solutions, including Advanced Traffic Management Systems (ATMS), effectively cut travel times by 25% and wait times at traffic signals by 20% to 30%, contributing to decreased vehicle emissions. Ramp metering systems and electronic tolling systems (ETS) also aid in maintaining the general flow of traffic and easing congestion at toll booths. Over the projected period, demand for ITS systems will rise due to the restricted room for transportation network growth and increased expenses brought on by congestion.

Global Intelligent Transportation System Market Restraint:

Expensive Installations and Lack of Finance and Well-Established Funding Models

Intelligent transportation systems' development, implementation, and maintenance come at a significant cost, potentially limiting market expansion. A sophisticated centralized Traffic Management Center (TMC) is required for effective ITS technology to manage real-time traffic data. Additionally, it must be connected to system administrators, transportation coordinators, and reaction teams. Although the overall network consists of many different parts, including CCTV cameras, advanced traveler information systems (ATIS), Highway Advisory Radio (HAR), microwave detectors, and Dynamic Message Signs (DMS), Mobile Data Terminals (MDTs) also need to be installed at various locations to function effectively. These installations could need significant investments that poor country governments cannot afford.

Initiatives for intelligent transportation in underdeveloped nations call for the pooling of public and private resources through creative financing and Public-private Partnerships (PPP). Reforms to taxation and regulatory policies are equally important to the process. Governments may struggle to address these challenges while enticing the private sector to invest in smart infrastructure. The smart city efforts pursued by many governments are intricate endeavors with a lengthy implementation period, several players, and various other dangers. All parties involved and individuals must be aware of such projects' advantages and disadvantages.

Modern technological approaches can easily be applied to raise money for creating and effectively operating such systems. For instance, integrating intelligent transportation systems while creating technology-driven financing models can result in substantial efficiency gains. A portion of the infrastructure expenses may be repaid through such advantages if these efficiency gains are commercialized using the proper business models. The resulting smart infrastructure, on the other hand, can produce vast amounts of data that governments may use to get actionable insights and monetize by selling the data to other stakeholders.

Global Intelligent Transportation System It's Market Opportunities:

Increasing Spending on the Development of Smart and Connected Vehicular Platforms

A paradigm shift in the vehicle industry has been sparked by introducing the Cooperative, Connected, and Automated Mobility (CCAM) idea. The idea enables efficient V2V and V2I communication by enabling road users to share traffic-related information with traffic planners. The C-ITS program is projected to dramatically increase road safety, traffic efficiency, and driving comfort by assisting drivers in responding to traffic conditions and making wise decisions. These benefits may help keep a sustainable transportation system in line with evolving societal needs and reduce traffic accidents. This is anticipated to be a major chance to aid the market's expansion throughout the forecast timeframe.

Regional Analysis

North America Dominates the Global Market

The global intelligent transportation system market is bifurcated based on region into North America, Europe, Asia-Pacific, Latin America, the Middle East and Africa.

North America is the most significant global intelligent transportation system market shareholder and is estimated to exhibit a CAGR of 3% over the forecast period. Due to the government's increased attention to enhancing the transportation infrastructure in response to increasing highway accident and fatality rates and growing traffic congestion, North America is the region that has adopted intelligent transportation technologies the fastest. The transportation sector in North America now has new opportunities to incubate and implement intelligent transportation systems more successfully thanks to advancements in technologies like big data, machine learning, the Internet of Things, and cloud computing.

Moreover, some of the region's largest companies, including ITS America and the U.S. Department of Transportation Research and Innovative Technology Administration (RITA), have launched research and development programs in intelligent transportation systems. Major international players are present, which helps the local market expand. Due to the growing traffic and congestion in the city, there have been numerous public-private partnership attempts to develop intelligent transportation systems at various locations throughout the North American region.

Europe is anticipated to exhibit a CAGR of 7.3% over the forecast period. Transportation services are crucial prospects from area GDP and total employment creation across the region, making the transportation sector an important sector in the European economy. Sustainable and properly connected transportation infrastructures have emerged as a fundamental requirement for the European Union to function effectively. The European Commission is establishing a standard solution for successfully integrating intelligent transportation systems into the current infrastructure in collaboration with its member states, industry participants, and public bodies. For instance, it aims to promote the use of ITS to manage the transport network for passengers and businesses effectively as part of the European Commission's Digital Single Market Strategy. Cooperative ITS deployment, which will lead to further automation in the transportation industry, has also begun work on the next generation of ITS technologies.

Asia-Pacific has emerged as one of the fastest-growing regions in the global market. According to the UN's 2017 World Broad Prospects, Asia's population is projected to grow to 5.2 billion people by 2050, with 64% living in cities. Govt. programs aim to lessen the impact of declining land carrying capacity in the area, concentrating on enhancing the general physical. The market for intelligent transportation systems would see significant growth since transportation is a key component of the physical infrastructure region in the future.

In Latin America, the market is expected to grow faster over the projected period due to rising government awareness of the advantages of intelligent transportation systems. The market for intelligent transportation systems in Argentina is anticipated to expand due to high demand potential, rising smart device use, rising vehicle traffic, and rising investments in the digitalization of transportation infrastructure.

In the Middle East and Africa, the market for intelligent transportation systems is anticipated to develop due to the expanding presence of foreign players and future smart cities. Middle Eastern nations like Saudi Arabia and the United Arab Emirates are leading the way in modernizing and implementing innovations in the transportation sector. Modern Bus Company (Saudi Arabia) awarded a contract to NEC Corporation (Japan) in 2019 for an Intelligent Transportation System (ITS) to boost the efficiency of the city's bus traffic. UAE's economy and population have grown quickly in recent years, and as a result, the nation is eager to implement an intelligent transportation system to provide appropriate transit.

Segmental Analysis

The global intelligent transportation system market is bifurcated into type and application.

Based on the product, the global intelligent transportation system market is bifurcated into ATIS, ATMS, ATPS, APTS, and EMS. 

The ATMS segment dominates the global market and is projected to exhibit a CAGR of 5.6% over the forecast period. To enable real-time control of the operations of transportation networks, market participants' ATMS solutions combine data processing, sensor, and communication technologies. The information acquired and processed benefits both drivers and passengers. Congestion and a significant increase in travel time are mostly caused by poor signal regulation. ATMS develops a comprehensive, integrated view of the whole traffic flow and assists in detecting accidents, road hazards, and hazardous weather conditions. It can be combined with the current traffic management systems, which primarily aid in easing traffic and guaranteeing effective use of the available road space.

Based on application, the global intelligent transportation system market is bifurcated into Traffic Management, Road Safety and Security, Freight Management, Public Transport, Environment Protection, Automotive Telematics, Parking Management, and Road Tolling Systems. 

The traffic management segment owns the highest market share and is predicted to exhibit a CAGR of 5.7% over the forecast period. Systems for traffic management improve the efficiency and dependability of transportation networks. They consist of things like ramp metering systems, vehicle detecting systems, and bridge traffic control systems. Fuel is wasted, more time is spent in traffic, and more money is lost due to the rising traffic congestion. They also hurt a nation's development and socioeconomic advancement. Therefore, traffic management systems are implemented to reduce the financial strain on governments and transportation agencies.

Recent Developments

• April 2023- India and Russia to implement sophisticated transport and logistics. The working group was established under the Memorandum of Understanding (MoU) signed between the Ministry of Road Transport and Highways (MoRTH) and the Ministry of Transport of the Russian Federation on Bilateral Cooperation in the Road Transport and Road Industry in September 2021 to establish a long-term and effective bilateral relationship of communication and cooperation in road transportation, logistics, ITS, and green mobility.

• May 2023- Kura posts a tender for an intelligent transport system for Sh8.4 billion. Everything is set to go as the Nairobi Intelligent Transport System (ITS) phase one project tender for Sh8.4 billion is opened by the Kenya Urban Roads Authority (KURA).