Augmented Reality (AR) in Automotive Market Size, Share & COVID-19 Impact Analysis, By Function (Standard AR HUD, AR HUD Based Navigation), By Sensor Technology (Radar, LiDAR, CCD/CMOS Image Sensor), By Display Technology (TFT-LCD and Other Advanced Technologies), By Electric Vehicle (Battery Electric Vehicle and Others), By Level of Autonomous Driving (Conventional and Semi-Autonomous), By Vehicle Type, and Regional Forecasts, 2021-2028

The global augmented reality (AR) in automotive market size was USD 3.97 billion in 2020. The global impact of COVID-19 has been unprecedented and staggering, with augmented reality in automotive witnessing a positive demand shock across all regions amid the pandemic. Based on our analysis, the global market exhibited stellar growth of 12.5% in 2020 as compared to the average year-on-year growth during 2017-2019. The market is projected to grow from USD 4.51 billion in 2021 to USD 14.44 billion in 2028 at a CAGR of 18.1% in the 2021-2028 period. The gradual growth in CAGR is attributable to the rise in the market’s demand and growth post-pandemic.

Augmented Reality has witnessed significant growth in the automotive industry over the past few years due to its potential to generate innovative solutions. AR is a tool for Human-Machine Interaction (HMI). In this technology, virtual components are superimposed on the real world to create an illusion of augmented reality or enriched reality.

AR technology is utilized in the industry through various tools and devices. For instance, AR Heads Up Displays (HUD) and AR smartphone applications for repair guidance, and safe driving are AR’s benefits in automotive. In addition to this, the increasing use of advanced driving assistance systems in new generation automotive and their growing preference in OEMs is expected to drive this market during the forecast period.

The rising consumer demand for enhanced driving experience and safety concerns among the populace accelerates the augmented reality in automotive industry. Additionally, the increasing interest of OEMs in implementing AR in their automobiles to gain a competitive edge is expected to propel the market growth during the forecast period. Moreover, augmented reality in this industry also assists in other aspects of the sector, such as training, maintenance, repair, inspection, and diagnostics.

AR-based Remote Assistance Accelerates Market Growth amid COVID-19 Pandemic

The COVID-19 pandemic continues to create an impact on the industry. Additionally, the spread of the virus and regulations enforced by the government to control the pandemic has negatively affected automotive sales. However, the augmented reality automotive market continues to grow despite the challenges faced by this industry. The demand for augmented reality increased for the AR-based remote assistance and dealership for a safe buying experience. Additionally, AR-based maintenance assistance enabled customers to perform maintenance activities without visiting repair shops. Hence, the market witnessed significant growth amid the pandemic.

LATEST TRENDS

Development of Self Driving And Semi-autonomous Vehicles is a Prominent Trend

The continuous evolution of the industry is driving the development of semi-autonomous and self-driving vehicles. According to the Institute of Electrical and Electronics Engineers (IEEE), by 2040, almost 75% of the cars running on roads will be autonomous.AR devices in these autonomous and semi-autonomous vehicles are expected to reduce the safety concerns among passengers. In addition to this, various manufacturers are investing in developing these autonomous vehicles, which further drives the demand for augmented reality in automotive sector.

DRIVING FACTORS

Increasing Adoption of Connected Automotive to Propel Market Growth

With the evolution of advanced communication technology, the demand for connected vehicles has increased rapidly in the transportation system. These connected vehicles use augmented reality-based Advanced Driver Assistance System (ADAS), which visualizes the crucial guidance information calculated by multiple connected vehicles. In addition to this, the AR system also superimposes the information on the driver’s field of vision with the assistance of the AR HUD display and further enhances safety. Moreover, increasing AR applications in new generation connected vehicles are expected to boost the market growth in years to come.

Technological Advancements in Automotive Industry to Boost Market Growth

This sector is going through rapid technological development, such as growing electrification and the utilization of advanced technology. For instance, the penetration of IoT in automotive has enhanced the potential for visualization and connectivity. In addition to this, the development and adoption of 5G technology for fast internet connectivity are further expected to enhance the functioning of augmented reality in automobiles. Moreover, the growing investment of OEMs in R&D and increasing electric vehicle sales are some of the major factors expected to influence the augmented reality in automotive market.

For instance, many OEMs, such as BMW, Ford, Mercedes, Volkswagen, and others, utilize augmented reality and virtual reality to improve the driving experience with more informatics and safe driving.

RESTRAINING FACTORS

The Threat of Cyberattacks and Data Theft May Hinder Market Growth

The use of AR in automotive sector further creates concerns regarding cybersecurity due to vehicle telematics and internet connectivity. Moreover, being a newly developed technology, AR is only available in luxury vehicles of premium brands, which further affects the availability and affordability of the cars and creates a negative impact on the augmented reality automotive market.

SEGMENTATION

By Function Analysis

Growing Consumer Preference for AR HUD-based Navigation Systems to Drive the Segment

Based on function, the market is segmented into standard AR HUD, HUD-based navigation, HUD-based adaptive cruise control, and HUD-based lane departure warning. The HUD-based navigation segment is anticipated to register the fastest CAGR of 19.6% over the forecast period. The rising consumer preference for AR for navigation is expected to drive the segment’s growth. Additionally, the standard AR HUD system units segment dominated the market in 2020, owing to their growing adoption by OEMs.

By Sensor Technology Analysis

Increasing Demand for High Accuracy to Spur the Sensor Fusion Segment Growth

The market is segmented into radar, LiDAR, CCD/CMOS image sensor, and sensor fusion based on the sensor technology. The sensor fusion segment is expected to hold the largest market share by 2028. Sensor fusion merges the data from various sensors, such as radar, LiDAR, CMOS, and others, resulting in more accuracy than individual sensors. The increasing demand for high data accuracy for AR devices in automotive is expected to drive the segment’s growth during the forecast period. In addition to this, sensor fusion works precisely on various roads and weather conditions; hence they are highly preferred in this industry. The segment is expected to witness a CAGR of 20.2% over the forecast period.

By Display Technology Analysis

Suitability of TFT-LCD Display for Challenging Automotive Environments to Bolster the Segmental Growth

Based on the display technology, the market is segmented into TFT-LCD and other advanced technologies. The TFT-LCD segment held the largest market share in 2020. Moreover, LCD is the most commonly used display technology in the automotive sector. It meets all temperature and durability standards. In addition to this, TFT-LCD provides high resolution, brightness, reliability, and reasonable cost compared to other displays. Hence, they are highly preferred in automotive applications.

Other advanced displays, such as OLED, are also expected to register a significant growth rate, owing to the inclination of automakers towards the development and deployment of these advanced displays in their upcoming automotive models.

By Electric Vehicle Type Analysis

Varying Fuel Prices to Drive Battery Electric Vehicle Segment Growth

The market is segmented into battery electric and others (hybrid) based on the electric vehicle type. The battery electric segment dominated the market in 2020 and is anticipated to continue its dominance in years to come. Stringent government regulations regarding emission control to ensure clean mobility and variation in fuel prices are the major factors driving the segment’s growth. In addition to this, the surging consumer preference for battery electric vehicles is anticipated to propel the segment’s growth in the near future.

By Level of Autonomous Driving Analysis

Enhanced Driving Experience to Propel the Semi-autonomous Segment

Based on the level of autonomous driving, the market is segmented into conventional and semi-autonomous. The semi-autonomous segment held the largest market share in 2020 and is expected to continue its dominance over the forecast period. The rising consumer preference for semi-autonomous vehicles due to enhanced driving and safety experience is expected to drive the segment’s growth during the forecast period. In addition to this, increasing manufacturers’ focus on the deployment of this technology in semi-autonomous vehicles is the supporting factor for the segmental growth.

By Vehicle Type Analysis

Increasing Deployment of AR Technology in Passenger Cars to Accelerate This Segment

Based on the vehicle type, the market is segmented into passenger cars and commercial vehicles. The passenger cars segment accounted for the largest market share of 91.0% in 2020. This technology is currently in the developing stage, and OEMs prefer to deploy the technology in passenger cars. For instance, the integration of AR HUD with the passenger car is easier than a commercial vehicle owing to the curvature of the former’s windshield. In addition to this, passenger cars with a high level of autonomous driving are more suitable for AR applications.  

All these factors are expected to drive market growth over the forecast period.

REGIONAL INSIGHTS

North America dominated the global augmented reality automotive market in 2020 with market size of USD 1.53 billion, owing to technological advancements in the region. Additionally, well-established key players are also anticipated to support the market growth during the forecast period. Moreover, the increasing passenger vehicle sales and the adoption of electric vehicles would further positively influence market growth.

According to the Edison Electric Institute (eei.org), electric vehicle sales in the U.S. in 2018 were up by 81% compared to 2017. Additionally, the manufacturer’s preference for deploying augmented reality in an electric vehicle is expected to drive the augmented reality in automotive market growth in the upcoming years.

Asia Pacific is expected to witness the fastest growth of CAGR 20.7% over the forecast period. China is expected to contribute to this growth in the region. In addition, the rising government and private investments for the development of startups based on AR are expected to boost the market growth in the region. Moreover, the increasing adoption of electric vehicles in emerging APAC countries, including China, Japan, South Korea, India, and others, is expected to support the market growth in the region.

Key players in APAC, such as Panasonic Corporation, Kia, Hyundai, and other automakers, support the market growth. Moreover, the increasing research and development on AR-based connected vehicles and autonomous vehicles are expected to create lucrative opportunities for the market in the forthcoming years. Additionally, the growing passenger vehicle sales due to improved living standards and surging disposable income are factors responsible for market growth.

Europe held the second-largest market share of 31.20% in 2020, owing to the strong presence of the auto sector in Germany, the U.K., and France. In addition to this, the ongoing technological advancement in the region would further drive market growth. The presence of well-established key players, such as BMW, Volkswagen, Mercedes, and others, is the supporting factor for the market in the region. Moreover, these players are developing new passenger vehicle models with augmented reality. For instance, BMW uses AR in its vehicles, which monitors and provides real-time data of the engine and other parts on a mobile app.

KEY INDUSTRY PLAYERS

The Presence of Major Players has Consolidated the Market Structure

The market is consolidated with strong key players such as Continental AG., Volkswagen AG, Daimler AG, BMW Group, and others. Additionally, these players are utilizing this technology in car dealerships and maintenance activities to attract customers’ attention and enhance the user experience. For instance, Hyundai rolled out an augmented car dealership app in September 2017 across Australia to demonstrate the latest features of its new “Reinvented i30” hatchback.

Continental AG is one of the Top Players in the Market Backed by its Possession of Affordable Solutions

Continental AG is a leading technology company headquartered in Hanover, Germany. It develops technologies and services for sustainable and connected mobility solutions. It also offers efficient, safe, affordable solutions for vehicles, machines, and transportation. Continental AG offers ultra-thin Augmented Reality Head-Up Display (AR-HUD) for passenger vehicles. In December 2016, It entered into a strategic partnership with DigiLens Inc. to develop the ultra-thin AR-HUD Display. DigiLens Inc. is a leader in holographic projection technology.

LIST OF KEY COMPANIES PROFILED:

• Continental AG (Germany)


• Volkswagen AG (Germany)


• Daimler AG (Germany)


• BMW Group (Germany)


• Panasonic Corporation (Japan)


• Visteon Corporation (U.S.)


• Hyundai Motor Company (South Korea)


• Jaguar Cars (England)


• WayRay (Switzerland)


• Audi AG (Germany)

KEY INDUSTRY DEVELOPMENTS:

March 2021: German Automaker Audi Introduced the Fully Electric Vehicle Model Q4 e-Tron, which comes with a dynamic Augmented Reality Windshield display.

Audi Q4 e-Tron comes with a spacious cockpit. Audi has added advanced features in this all-electric vehicle, including an AR HUD display. The company initially developed it as a concept car, first revealed at the 2019 Geneva International Motor Show.

January 2021: Panasonic Introduced New Augmented Reality HUD at CES 2021

Panasonic Automotive introduced its new AR HUD in CES 2021. The company used its optics, imaging technology, and volume optimization advancements combined with AI from its SPYDR cockpit domain controller to render far-field and near-field content for vehicle information. The information includes speed, pedestrian, or object detection route/mapping guidance, for an informed and enhanced driving experience.

REPORT COVERAGE

The Augmented Reality in automotive market report provides a detailed analysis of the industry and focuses on key aspects, such as leading companies, product types, and leading product applications. Besides this, it offers insights into the 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

ATTRIBUTE	DETAILS
Study Period	2017-2028
Base Year	2020
Estimated Year	2021
Forecast Period	2021-2028
Historical Period	2017-2019
Unit	Value (USD Billion)
By Function	Standard AR HUD AR HUD Based Navigation AR HUD Based Adaptive Cruise Control AR HUD Based Lane Departure Warning
By Sensor Technology	Radar LiDAR CCD/CMOS Image Sensor Sensor Fusion
By Display Technology	TFT-LCD Other Advanced Technologies
By Electric Vehicle	Battery Electric Vehicle Others (Hybrid)
By Level of Autonomous Driving	Conventional Semi-autonomous
By Vehicle Type	Passenger Cars Commercial Vehicles
By Geography	North America (By Function; By Sensor Technology;  By Display Technology; By Electric Vehicle; By Level of Autonomous Driving; By Vehicle Type) U.S.  (By Vehicle Type) Canada (By Vehicle Type) Mexico (By Vehicle Type) Europe (By Function; By Sensor Technology;  By Display Technology; By Electric Vehicle; By Level of Autonomous Driving; By Vehicle Type) U.K. (By Vehicle Type) Germany (By Vehicle Type) France (By Vehicle Type) Rest of Europe (By Vehicle Type) Asia-Pacific (By Function; By Sensor Technology;  By Display Technology; By Electric Vehicle; By Level of Autonomous Driving; By Vehicle Type) China (By Vehicle Type) Japan (By Vehicle Type) India (By Vehicle Type) Rest of Asia-Pacific (By Vehicle Type) Rest of the World (By Function; By Sensor Technology;  By Display Technology; By Electric Vehicle; By Level of Autonomous Driving; By Vehicle Type)