Connected Car Market Size, Share & Industry Analysis, By Application Type (Mobility Management, Telematics, Infotainment, and Driver Assistance), By Network Type (3G, 4G, 5G, and Satellite), By Technology Type (Embedded, Tethered and Integrated), By Sales Channel Type (OEM and Aftermarket), By Communication Type (Vehicle to Vehicle and Vehicle to Infrastructure) and Regional Forecast, 2024-2032

The global connected car market size was valued at USD 80.87 billion in 2023 and is projected to grow from USD 95.14 billion in 2024 to USD 386.82 billion by 2032, exhibiting a CAGR of 19.2% during the forecast period. Asia-Pacific dominated the connected car industry with a market share of 42.92% in 2023.

Connected cars are vehicles that are connected to smartphones and tablets and are equipped with internet access, as well as have the ability to optimize their operations at regular intervals. It can share content with a series of devices inside and outside the car environment through the network connection. The vehicle's data are shared with the help of RADAR, LiDAR, and advanced sensors. In recent years, car manufacturers have developed advanced connectivity solutions such as vehicle 2 vehicle (V2V) and vehicle to infrastructure (V2I) systems. Vehicles connected to various devices help enhance their safety as the driver receives real-time data of the vehicle's surroundings. The primary aim of the adoption of connected vehicles is to avoid collisions, reduce fatalities, and make vehicle management more efficient.

The COVID-19 pandemic disrupted the connected cars market with supply chain interruptions and reduced vehicle sales. However, it accelerated the adoption of remote services and digital transformation within the automotive industry. Consumer demand shifted toward safety and convenience features, including touchless interfaces and Advanced Driver-Assistance Systems (ADAS). Automakers responded by enhancing remote diagnostic capabilities. Interest in mobility-as-a-service (MaaS) solutions grew despite declining traditional car sales, leveraging connected car technologies for fleet management.

Connected Car Market Trends

Installation of Cybersecurity Systems to Lead the Connected Car Market Trends

The growing adoption of cybersecurity solutions in-car safety systems is a major trend in this market. In recent years, data has become one of the vital factors in the automotive industry. In connected vehicles, the user's smartphone is synced with the car's infotainment system. The user's data might consist of bank and medical details, which face a high probability of getting hacked. Tech giants such as Google and Apple are developing vehicle cybersecurity apps in order to prevent data from getting stolen. These apps are highly user-friendly, monitor the vehicle's security, and notify the user if any stranger logs in from other devices. For example, DENSO entered into a joint development agreement with Dellfer to develop ZeroDayGaurd 1.0, a cybersecurity product for the automobile sector.

Connected Car Market Growth Factors

Growing Inclination of Consumers towards Anti-Theft Systems to Drive the Market

An increasing number of vehicle thefts are drawing the attention of car buyers to surveillance systems that can monitor their vehicles and send timely updates about their geographic location. Once the mobile is connected to the vehicle's infotainment system, it keeps a record of the passenger's travel history or the location of the passenger's last travel spot, how many halts there have been in between, etc., which can make travel unsafe. In order to prevent data theft, car-owners have started to equip their vehicles with devices such as TravelEyes2, ProScout, and LoJack. These systems send a notification to the owners' mobile phones, enabling them to lock the car with one touch.

Additionally, regulatory bodies have imposed stringent norms to curb the rising instances of data theft. For instance, Thales has partnered with the PSA Group (makers of Citroen and Peugeot) to identify the security threats and to develop a technique to identify these risks and take the necessary precautions to keep the vehicle safe and secure. In response, automotive manufacturers recognize the exigency of the situation and are actively working with professionals in this sector. 

Increasing Adoption of Advanced Driver Assistance System (ADAS) to Fuel the Market

The rising adoption of ADAS is expected to drive the connected car market growth over the forecast period. The rapid adoption of software algorithms, sensors, cameras, processors, and advanced technologies in mapping road obstacles has improved the applicability of ADAS in vehicles, which is also expected to reduce road fatalities. For instance, In December 2023, the Global Status Report on Road Safety 2023 published by the World Health Organization indicates a slight decrease in the annual number of road traffic fatalities to 1.19 million, suggesting that initiatives aimed at enhancing road safety are yielding results.

Governments have also imposed stringent safety norms on automotive manufacturers to develop vehicles equipped with ADAS features amid growing concerns regarding the safety and security of passengers. For example, in 2013, under the Federal Motor Vehicle Safety Standard (FMVSS), the National Highway Traffic Safety Administration (NHTSA) of the US made it mandatory to equip Anti-lock Braking System (ABS) in all vehicle segments. Similarly, in 2015, the European Commission (EC) made it mandatory to install an e-call system from April 2018 in all new vehicles, which is one of the most vital features of connected vehicles.

RESTRAINING FACTORS

Lack of Connectivity Infrastructure to Restrain Growth

As network connections on highways are restricted, vehicles cannot connect to the cloud. Compared to developed countries, the development of connected vehicles infrastructures in developing economies is lower. Uninterrupted 3G and 4G networks are available mostly in urban areas. This is a major factor that is expected to restrain the market's growth over the forecast period. For example, there are more than a million mobile users in India, but there is a huge lack of 4G data networks in rural areas.

Connected Car Market Segmentation Analysis

By Application Type Analysis

Driver Assistance Segment to Dominate the Market

As per the market forecast, the driver assistance segment is anticipated to dominate the market during the forecast period. Advanced driver assistance system consists of technologically advanced features such as adaptive cruise control, lane keep assist, 360 view camera, park assist, etc., that enhance the vehicle's safety. Various governments across the globe have imposed stringent safety norms on automotive manufacturers. In May 2023, the National Highway Traffic Safety Administration (NHTSA) announced that it had added both AEB and pedestrian AEB (PAEB) to its two main programs for increasing vehicle safety: The New Car Assessment Program (NCAP) and a Federal Motor Vehicle Safety Standard (FMVSS) regulation. The government agency did so due to AEB’s potential to prevent many fatalities and mitigate a large number of non-fatal injuries.

The mobility management segment holds the second-largest position in the market. This system enables the driver to reach the destination safely in the shortest time and with the most efficient fuel consumption. It also offers vital information such as extreme weather and road conditions and real-time alternative routes to avoid external hazards, ensuring a superior driving experience.

The vehicle telematics segment is anticipated to achieve considerable growth in the market. The increasing IT infrastructure along highways that can seamlessly connect to mobile networks is expected to drive the demand for connected telematics solutions during the forecast period.

The infotainment system segment is also anticipated to show good growth over the forecast period. In recent years, infotainment systems have become one of the most vital components of vehicles. As a result, automakers are increasingly installing infotainment features such as Wi-Fi hotspots, social media access, smartphone interfaces, and advanced mobile office platforms in their products.

By Technology Type Analysis

Integrated Segment to Hold the Largest Market Share

Based on technology type, the market is segmented into embedded, tethered, and integrated systems. The integrated segment is expected to dominate the market over the forecast period. These systems provide unlimited data sharing possibilities and are cost-effective compared to embedded and tethered systems. Key OEMs across the globe have partnered with various key players to develop advanced integrated systems for connected vehicles that provide seamless connectivity to consumers. For example, Ford partnered with Geotab to develop a telematics solution for Ford vehicles.

The embedded segment is expected to occupy the second-largest position in the market. Factors such as cost optimization of service plans, cloud services, and governmental regulations are expected to help its leading position in the market. In addition, key features such as remote diagnostics and eCall systems cannot function without an embedded system. Hence, the rising adoption of embedded systems is expected to fuel the adoption of connected vehicles over the forecast period.

By Network Type Analysis

5G Segment to Lead Market Share

Based on network type, the market is segmented into 3G, 4G, 5G, and satellite. The 5G segment is anticipated to dominate the market during the forecast period. Several telecommunication companies are developing advanced 5G networks for better communication between connected vehicles and external devices. According to the 5G Automotive Association, more than 60% of road accidents can be avoided with the help of a seamless 5G network. In February 2024, Cisco and TELUS introduced 5G capabilities in North America, focusing on IoT for connected cars. TELUS planned to onboard 1.5 million 5G standalone cars onto Cisco's IoT Control Center, starting in 2024, enhancing driver experience and enabling new revenue streams for car manufacturers.

The satellite segment is expected to be the fastest-growing segment over the forecast period. Cellular and Wi-Fi networks support connected vehicles only in areas where mobile towers are present, only in urban areas. Once the vehicle leaves the boundary of the mobile tower, the network gets completely cut off, which may cause serious problems for the occupants in the connected vehicles. Various automotive OEMs, satellite operators, and mobile operators focus on developing hybrid satellite-terrestrial networks to overcome this problem, which would offer uninterrupted connectivity. Hence, the increasing demand for satellite and 5G networks is expected to drive the connected car industry.   

By Sales Channel Type Analysis

OEM Segment to Hold the Largest Market Share

Based on the sales channel, the market is segmented into OEM and aftermarket. The OEM segment holds the largest share of the global market. Increasing technological developments such as uninterrupted connectivity, cybersecurity, and the development of driverless vehicles integrated with highly secure software are anticipated to aid the dominance of OEMs during the forecast period. In addition, increasing partnerships with key players to develop high-quality and cost-effective components is another reason that is fueling the growth of the OEM segment.

By Communication Type Analysis

Vehicle 2 Vehicle (V2V) Segment to Hold the Largest Market Share

The market is categorized into Vehicle to Vehicle (V2V) and Vehicle to Infrastructure (V2I) based on communication type. The V2V segment is expected to dominate the market over the forecast period. Vehicle-to-vehicle communication helps reduce traffic congestion in large cities, enhances road safety, and augments the comfort of the occupants. Developments in wireless technologies and the increasing usage of advanced equipment such as sensors and GPS in V2V systems are anticipated to maintain the segment's dominance over the forecast period.

The Vehicle to Infrastructure segment is expected to show good growth during the forecast period. Increasing government initiatives to develop a V2I framework ensures the stable growth of the segment in the market.

REGIONAL INSIGHTS

Based on region, the market is segmented into North America, Europe, Asia Pacific, and the Rest of the World. The Asia Pacific region is expected to dominate the connected car market share owing to the increasing adoption of high-end and cost-efficient connectivity solutions. In addition, consumer demand for in-vehicle embedded connectivity systems and the increasing shift towards connected cars has propelled the growth of connected vehicles in this region.

Europe is expected to be the second-largest region in this market. Consumers in Europe increasingly demand vehicles equipped with advanced connectivity features for enhanced safety, convenience, and entertainment. Features like in-car Wi-Fi, real-time traffic updates, remote diagnostics, and smartphone integration are becoming more popular among European drivers. In October 2023, Yahoo partners with Xperi to deliver in-car video to BMW drivers, featuring Yahoo Finance, Yahoo Sports, and in the Know, through Xperi’s TiVo-powered DTS AutoStage service. This follows BMW's earlier collaboration on the connected car initiative with Meta on AR and VR integration in vehicles.

North America is expected to grow steadily in the connected cars market over the forecast period. The growing adoption of advanced technologies such as 5G connectivity will help North America showcase healthy growth.

List of Key Companies in Connected Car Market

TomTom International is a Key Player in the Market

TomTom International is a major player in the global market. Deployment of a wide range of advanced connectivity solutions, development of self-driving vehicles for intelligent transportation, and safe mobility management are the company's key aims. Also, the constant R&D efforts by the company are leading to the creation of innovative technologies, which are some of the prominent factors responsible for the dominance of the company.

LIST OF KEY COMPANIES PROFILED:

• Harman International (Connecticut, United States)


• Continental AG (Hanover, Germany)


• AT&T (Texas, United States)


• Robert Bosch GmbH (Gerlingen, Germany)


• Daimler AG  (Stuttgart, Germany)


• Audi (Ingolstadt, Germany)


• TomTom Inc. (Amsterdam, Netherlands)


• General Motors (Michigan, United States)


• Ford Motor Company (Michigan, United States)


• HYUNDAI MOTOR GROUP (Seoul, South Korea)


• Volvo (Gothenburg, Sweden)

KEY INDUSTRY DEVELOPMENTS:

• March 2024 - Vero and Privacy4Cars have joined forces to offer privacy tools and identity protection services tailored for connected car owners. Their collaborative effort introduced the Identi-FI solution, addressing data deletion from connected cars and offering recovery assistance in cases of identity theft.


• June 2023 - Cisco, Audi, CARIAD, and HARMAN partnered to offer Webex for hybrid work in select Audi models from 2024. This addresses evolving work dynamics, providing a secure mobile collaboration experience via the Audi Application Store.


• May 2023 - Nvidia Corp and MediaTek Inc. collaborated to enhance vehicle infotainment systems with AI, enabling video streaming and gaming. MediaTek integrates Nvidia's GPU chiplet and software into its system-on-chips for automakers' infotainment displays, as unveiled at Computex in Taipei.


• February 2023 - Qualcomm launched Snapdragon Auto 5G Modem-RF Gen 2, enhancing connected car tech with high performance and low-latency connectivity. It enables immersive experiences and introduces satellite communication for ubiquitous connectivity.


• November 2022 - Google and Renault expanded on their partnership, allowing the automaker to offer over-the-air software updates to its vehicles amid a boom in the connected car marketplace.

REPORT COVERAGE

The global connected car market report provides a detailed analysis of the market and focuses on key aspects such as leading companies, product types, and leading product applications. Besides this, the report offers insights into the current 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