Vehicle Analytics Market Size, Share & Trends Analysis Report By Application (Dealer Performance Analysis, Driver and User Behavior Analysis, Predictive Maintenance, Safety and Security Management, Traffic Management, Usage-based Insurance, Warranty Analytics, Infotainment, Road Charging), By Deployment (On-premise, Cloud), By End-User (Original Equipment Manufacturers (OEMs), Insurers, Automotive Dealers, Regulatory Bodies, Fleet Owners, Tier 1 Suppliers, Service Providers) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2022-2030

Market Overview

The global vehicle analytics market size was worth USD 2,857 million in 2021 and is projected to reach USD 20,109 million by 2030, registering a CAGR of 24.21% during the forecast period (2022-2030). 

Vehicle analytics is a technology that tracks real-time data from the vehicle. It provides real-time insights to end-users such as the OEM, fleet owner, an insurer on the present state of the vehicle and related operating activities. Furthermore, data insights created by vehicle analytics systems serve as the foundation for autonomous mobility and vehicle-to-everything (V2X) since they provide integrated inputs for vehicle activities. Because of the increased penetration of V2X technology and the expansion of the tech-savvy population, connected mobility technology has gained significant traction in recent years, enabling the growth of the vehicle analytics industry.

The market is predicted to develop due to factors such as the rising trend of connection solutions in automotive, the increased use of cloud-based technology for smart fleet management systems, and an increased concern for vehicle safety and security. However, the market's expansion is hampered by high installation costs and data security concerns. Market participants are forming strategic collaborations with OEMs, insurers, and fleet operators to gain a competitive edge; the expanding development of semi-autonomous and autonomous cars and an increase in demand from developing countries are all projected to boost the market growth.

Market Dynamics

Drivers: The Rise in Trend of Connectivity Solutions in Automotive

Connected vehicles allow cars to communicate with other vehicles, road infrastructure, and the cloud via an advanced digital platform. This interaction with devices generates a set of data points, which are collected and combined using software solutions to conduct the needed activities. Such information is mined and put to good use to achieve the highest level of operational efficiency possible. Automotive dealers, fleet operators, and drivers can use this software and related services to optimize resource utilization, increase safety, and automate certain driving functions while collecting vital data such as vehicle performance, weather, and road conditions.

Connected vehicles collect data from their surroundings and communicate and process it to exchange data points and generate required actions, as well as intelligent transportation infrastructure that provides real-time traffic data to transportation authorities for better road management and infrastructure planning. The demand for fundamental vehicle connectivity applications such as real-time updates, performance analysis, navigation, and in-car infotainment is driving the need for connected technologies in the automotive sector.

Drivers: Rise in Use of Cloud-Based Technology for Smart Fleet Management Solutions

Smart devices and software have become the go-to tools for fleet operators as demand for connectivity, and vehicle networking solutions has grown. Cloud management-based vehicle analytics systems cover asset tracking, driver behavior analysis, predictive maintenance, fleet optimization, and other related challenges. Data generated during fleet operations are captured in cloud-based technology and transferred to the corresponding data recipient's server, providing a pain point for the difficulties mentioned above. Furthermore, the cloud offers data and application backup and recovery to secondary storage or infrastructure. Furthermore, many firms are implementing various cloud models to address the shortcomings of traditional fleet management platforms. For example, smart fleet management vehicle analytics solutions evaluate fleet information such as route planning, fuel analytics, and driving patterns to improve productivity and save fuel, in addition to tracking Softweb's cloud-based solution powered by big data analytics, AI, IoT, and other emerging technologies.

Furthermore, AI and machine learning capabilities enable autonomous dispatching and routing and empower fleet management to forecast vehicle health and driving behaviors based on the vehicle's usage, lowering maintenance costs and increasing efficiency. To execute their responsibilities, many car networking and communication solutions require software. This software aids in configuring, managing, and monitoring Internet of Things (IoT) devices in automobiles. The vehicle analytics system uses the generated data and process to get the intended result. All of these variables have a substantial impact on the market for vehicle analytics.

Restraint: High Installation Cost

In addition, vehicle analytics requires high-tech digital infrastructure, communication devices, Internet of Things (IoT) devices, GPS receivers, highly expensive LiDAR & radar systems, and pricey deals with cloud computing and telecommunication network providers, which further increase the cost of the system. Moreover, high costs of operation, troubleshooting, maintenance, and other related infrastructure are anticipated to hamper the growth of the vehicle analytics market.

Future Growth Opportunities in the Global Market

• Growing Developments in Semi-Autonomous and Autonomous Vehicles

Semi-autonomous and autonomous vehicles primarily depend on software, and the increasing effort to deploy independent driving features is positively impacting the vehicle analytics market growth. Several vehicle manufacturers, such as BMW, Volvo, Ford, and others, are integrating Level 1 and Level 2 autonomous technology; some models with Level 3 autonomy were also launched in 2019. These launches are equipped with several automotive software and high-end technological systems that enable real-time data collection and analytics of vehicle operations.

Furthermore, many leading automotive OEM companies are engaged in R&D and testing activities for Level 4 and Level 5 autonomous vehicles in different cities worldwide. For instance, in 2017, Germany became the first country across the world to legalize the use of level 4 and 5 autonomous driving systems. In addition, some cities have also approved the operation of pilot fleets on private properties that offer suitable normal road traffic conditions. Therefore, such growing developments in semi-autonomous and autonomous vehicles are expected to provide opportunities for market growth in vehicle analytics. For instance, microchip maker NVidia, and car manufacturer Mercedes, are planning to roll out software-defined autonomous vehicles by 2024. Increasing penetration of these systems is expected to support the growth of the market in vehicle analytics shortly.

Regional Analysis

Region-wise, the global vehicle analytics market share is studied across North America, Europe, Asia-Pacific, and LAMEA.

The European vehicle market is projected to grow at a CAGR of 23.8% during the forecast period. The European market in vehicle analytics is anticipated to hold the largest share and expand significantly during the forecast period, owing to the growing penetration of autonomous mobility and the adoption of high-end technologies by most manufacturers to attain the changing consumer sentiments toward vehicle safety in the era of digitalization. For instance, in May 2017, the EC (European Commission) adopted the strategy paper on automated driving. The automated driving paper was published as a part of the EC's third mobility package that includes the updated rules on road infrastructure safety management, new vehicle safety standards, and a strategic action plan on road safety. Such initiatives are expected to demand data-driven technologies for automotive and nearby digital infrastructure, thereby creating a lucrative opportunity in European countries. 

The Asia-Pacific market in vehicle analytics is the fastest-growing and second-largest region. It is projected to reach USD 4615 million by 2030 growing at a CAGR of 27% during the forecast period. The changing mobility outlook in Asia-Pacific and changing consumer sentiments are expected to witness sky-rocketing growth of high-end technology-enabled automotive systems in the region. The regional growth is driven by India, China, and ASEAN countries, which are emerging countries in the global market. The market of vehicle analytics is anticipated to experience exponential growth, owing to the collaboration of leading connected car companies and the adoption of the 5G network for connected cars. These technologies need data-driven technologies to perform the operations. In addition, wireless service providers are working to provide advanced wireless platforms for connected cars, which are expected to supplement the growth of the Asia-Pacific market in vehicle analytics.

North America is the third largest region. The North American market in vehicle analytics is anticipated to experience significant growth due to the expansion of connected car networks and the growing penetration of data-driven technologies. In addition, leading telecommunication companies are investing in building the capabilities of connected cars. The North American market in vehicle analytics is expected to grow considerably during the forecast period, owing to the need for gathering and processing data mainly for managing the fleet more efficiently, technological advancements, and increasing concerns over the safety of vehicles & drivers. 

Segmental Analysis

The global vehicle analytics market share is segmented by application, deployment, end-user, and region.

• On the Basis of Application

Depending on the application, the global market is classified into dealer performance analysis, driver and user behavior analysis, predictive maintenance, safety and security management, traffic management, and usage-based insurance. The safety and security management segment was the highest contributor to the market and is estimated to grow at a CAGR of 24.8% during the forecast period. Big Data IoT technologies are equipped with technology systems that gather real-time data and suggest preventive action to avoid upcoming predictive issues on the road. For instance, connected IoT sensors collect real-time vehicle data, including crash insights and real-time traffic, alerting drivers about traffic conditions and road hazards and suggesting alternative routes. Increasing concern for safety and security for automobiles in the era of connected vehicles is expected to support the growth of the safety and security management segment.

The predictive maintenance segment is the fastest-growing segment. Predictive maintenance is crucial for most vehicle owners, especially fleet owners, to maintain operational efficiency and reduce unexpected vehicle breakdowns. Vehicle manufacturers and fleet owners have adopted the data-driven high-end technology to track data points, take preventive actions for automotive operational effectiveness, and cut additional expenses. Vehicle analytics for predictive maintenance is a host of potential benefits for vehicle manufacturers. Therefore, fleet owners have increased the adoption of vehicle analytics in the automotive industry. 

Driver and user behavior analysis is the second largest segment. Vehicle driver/user behavior analysis plays a crucial role in the regulatory framework as it tracks the speed limit of the vehicle, vehicle turn angle ranges, frequent acceleration and deceleration of vehicle speed, and harsh acceleration and deceleration. Increasing digitalization on the automotive front and growing utilization of high-end technology by regulatory bodies support the growth of vehicle analytics for driver/user behavior analysis by the end of the forecast period.

• On the Basis of Deployment

By deployment, the global market is divided into on-premise and cloud. The on-premise segment was the highest contributor to the market and is estimated to grow at a CAGR of 22.8% during the forecast period. In the era of digitalization, the on-premises segment is expected to witness considerable growth in the vehicle analytics market by the end of the forecast period. Vehicle analytics for on-premise is associated with a vehicle analytics program operated and maintained through the end-users at their premises or area of operation. Changing consumer sentiment and continuous requirements for product development are the crucial driving factors supporting the growth of the on-premise segment in the near future.

The cloud segment is the fastest-growing segment. Consumer sentiment shifted to cloud-based vehicle analytics technology solutions from on-premises vehicle technology in recent years, owing to several advantages, such cost-effective solution at the time of installation and no need for a dedicated workforce for maintaining and operating the technology. In the near future, cloud-based vehicle analytics solution is expected to propel market growth.

• On the Basis of End-User

Based on end-user, the global market is categorized into original equipment manufacturers (OEMs), insurers, automotive dealers, regulatory bodies, and fleet owners. The original equipment manufacturers (OEMs) segment was the highest contributor to the market and is estimated to grow at a CAGR of 26.4% during the forecast period. Vehicle analytics is utilized for quality improvement, logistics, and customer services, which enable the collection of crucial data points important for future pathways. Original equipment manufacturer deals with various vehicle analytics systems for the application of dealer performance analysis, driver and user behavior analysis, predictive maintenance, safety and security management, and usage-based insurance. Such factors drive Vehicle Analytics Market growth. 

Fleet owners is the fastest-growing segment. Growing requirements for effective fleet management and increasing penetration of smart fleet management solutions are expected to support the growth of vehicle analytics for fleet owners.

Regulatory bodies are the third-largest segment. Increasing penetration of connected technology in automotive and changing urban transportation outlook are expected to bolster the demand for vehicle analytics for the regulatory bodies segment in the near future.

Impact of covid-19

As per the WHO, the number of reported COVID-19 cases jumped from 87,137 on March 01, 2020, to 102,083,344 as of February 01, 2021, with approximately 2,209,195 deaths globally. The rapid rise in the number of confirmed COVID-19 cases globally resulted in the governments of various countries resorting to stringent containment measures to slow down the spread of the pandemic. However, complete lockdowns across countries also resulted in a short-term decline in the GDPs of their respective economies.

The COVID-19 pandemic had e a dual effect on the electronics industry, wherein the manufacturing of electronics components was halted due to lockdowns imposed in various countries, coupled with slower logistical processes and supply interruptions. Furthermore, the unavailability of labor globally has also contributed negatively to the manufacturing of electronic components.

The discontinuation in the delivery of electronics products by e-commerce companies during the lockdown, as they were considered non-essentials, negatively impacted the electronics industry. However, increased demand for laptops, computers, and mobile phones due to work-from-home situations positively affected the electronics industry.

The Chinese economy was hit tremendously as it was the epicenter of the COVID-19 pandemic, disrupting the supply chain for major electronic brands. As China is the major exporter and manufacturer of raw materials required to produce electronic products, this has led to the halting of the ongoing production of electronics in the U.S. and Europe, thereby creating a demand-supply gap.

Recent Developments

• May 2022 - Automotive services business Holman (formerly ARI Fleet UK) and FATEC Group, the largest independent fleet management company in France, have entered a new partnership to support fleet operators globally. The two firms can offer multi-national fleet operators a global fleet leasing and management solution, providing "the consistency and transparency organizations need to control operating costs better."
• May 2022 - Samsung Electronics, the world leader in advanced memory technology, and Red Hat, Inc., the world's leading provider of open source solutions, today announced a broad collaboration on software technologies for next-generation memory solutions. The partnership will focus on the development and validation of open source software for existing and emerging memory and storage products, including NVMe SSDs; CXL memory; computational memory/storage (HBM-PIM, Smart SSDs), and fabrics — in building an expansive ecosystem for closely integrated memory hardware and software.