Predictive Automobile Technology Market Size, Share & COVID-19 Impact Analysis, By Vehicle Type (Passenger Cars and Commercial Vehicles), By End-User (Fleet Owners, Insurers, and Other End-Users), By Component (Software and Hardware), By Application (ADAS, OBD, Predictive Maintenance, and UBI), and Regional Forecasts, 2023-2030

The global predictive automobile technology market size was valued at USD 60.96 billion in 2022. The market is projected to grow from USD 64.26 billion in 2023 to USD 118.10 billion by 2030, exhibiting a CAGR of 9.1% during the forecast period.

Predictive technology utilizes various sensors in the vehicle to track real-time and historical data on vehicle & driver behavior by leveraging Artificial Intelligence (AI) & Machine Learning (ML). Furthermore, it utilizes predictive analytics to predict and correct future behavior, faults, and activities that may hamper the vehicle if not updated in real-time.

Therefore, the rising demand for safe, comfortable, and efficient transportation is expected to influence the demand for predictive automobile technology. For instance, according to the National Highway Traffic Safety Administration (NHTSA) estimates, in 2021, 42,915 fatalities occurred in motor vehicle traffic crashes in the U.S., a 10.5% increase over the fatalities that occurred in 2020. Human error is one of the crucial factors in these fatalities. Almost 94% to 96% of accidents in the U.S. are caused due to human error. Therefore, the rising demand for safe transportation will likely boost the predictive automobile technology market growth in the upcoming years.

COVID-19 IMPACT

Drop in Vehicle Sales & Production Activities During COVID-19 Pandemic Hampered Market Growth

The COVID-19 pandemic negatively impacted the sale and production of automobiles. Moreover, disruption in supply chains caused due to government restrictions and halt in transportation & manufacturing activities significantly hampered the market growth. For instance, as per the International Organization of Motor Vehicle Manufacturers (OICA), vehicle production in 2020 witnessed a yearly drop of 15.7%; this significant drop in sales also affected the demand for predictive vehicle technology globally.

Moreover, the semiconductor chip shortage induced by the COVID-19 pandemic also reduced the production of hardware components necessary for predictive vehicle technology. This drop in the supply of hardware components, such as various sensors and electronic devices, has negatively impacted market growth. Furthermore, due to government guidelines, a halt in transportation and mobility activities worldwide also resulted in a decreased number of on-road vehicles. Therefore, the reduced use of predictive technology for various applications, such as predictive maintenance, predictive ADAS features, and others, significantly hampered the market growth.

LATEST TRENDS

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Growing Trend for Adoption of Predictive Analytics to Accelerate Market Growth

The ongoing trend for the adoption of predictive analytics in the automotive sector to enhance the drive experience is likely to accelerate the market growth. Predictive analytics utilizes various sensors such as temperature, acoustic, infrared, sound, and battery level sensors to monitor the vehicle condition continuously. The data collected using these sensors is further utilized to determine the vehicle's servicing requirements through predictive maintenance. Moreover, this data can be shared with the Internet of Things (IoT) cloud and accessed by analytics and visualization tools for future decision-making. Therefore, increasing demand for predictive analytics among fleet managers for timely vehicle servicing and avoiding vehicle breakdown is likely to boost market growth.

DRIVING FACTORS

Penetration of Advanced Technologies in the Automotive Industry to Drive Market Growth

The growing penetration of advanced technologies, such as Advanced Driver Assistance Systems (ADAS), AI, Machine Learning (ML), and others, in the automotive industry for enhanced vehicle performance is driving the market. Additionally, the development of connected and autonomous cars that leverage IoT devices for data transfer and vehicle-to-everything (V2X) interactions will influence the adoption of predictive automobile technology in vehicles.

Governments worldwide are supporting the adoption of these advanced automotive technologies to enhance road safety. Therefore, increasing stringent government regulations to enhance road safety are anticipated to boost market growth during the forecast period. For instance, according to the European Commission, the new Vehicle General Safety Regulation from the European Union (EU), effective from July 2022, introduced mandatory ADAS systems for safe transportation. Moreover, the EU also established a new legal framework for the approval of driverless vehicles in the EU. Similarly, other governments are focused on introducing new regulations on the adoption of these advanced technologies in the automotive sector, further accelerating the market expansion in the coming years.

Development of 5G Connectivity for Automotive to Create Lucrative Opportunities

The development and adoption of 5G connectivity are integral to the automotive industry transformation. 5G connectivity will enhance the performance and data transfer associated with connected vehicles. Therefore, the adoption of 5G connectivity in new-generation advanced vehicles is expected to generate lucrative opportunities for predictive vehicle technology adoption.

RESTRAINING FACTORS

Cyber Security Threats Associated with Predictive Technology May Restrain Market Growth

Slow adoption of connected cars across some developing and underdeveloped economies is likely to slow down the growth of the global predictive vehicle technology market. Additionally, cybersecurity-related threats associated with data transfer from connected vehicles may restrain the market growth in the ensuing years. Predictive technology installed in connected vehicles stores and shares real-time vehicle and driver behavior-related data with the software platform through the internet connection. This stored real-time data may be prone to data leaks and other cybersecurity-related issues. For instance, in April 2023, Tesla, one of the leading automakers, was sued over fraud, negligence, and privacy invasion.

SEGMENTATION

By Vehicle Type Analysis

Rising Popularity of New Generation Vehicles with Advanced Safety Technologies to Drive the Passenger Cars Segment Growth

By vehicle type, the market is segmented into passenger cars and commercial vehicles.

The passenger cars segment held the largest market share in 2022. The increasing popularity and demand for new-generation automobiles with advanced safety technologies are anticipated to boost the market growth. The new generation passenger cars consist of sensors, telematics devices, stable connectivity, advanced safety features such as ADAS, predictive maintenance analysis, and predictive smart parking. Therefore, demand for predictive automobile technology in these vehicles is expected to influence market growth.

The commercial vehicles segment is anticipated to witness the fastest growth rate over the forecast period. Predictive technology in commercial vehicles assists fleet managers in reducing the cost of operations in the logistics and transportation industry. Additionally, the real-time data on driver behavior and vehicle parameters tracked by sensors further assist fleet managers in improving fleet efficiency.

By End-User Analysis

Surging Demand for Predictive Technology to Accelerate the Other End-Users Segment Growth

By end-user, the market is classified into fleet owners, insurers, and other end-users. 

The other end-users segment held the largest market share in 2022. The surging demand for predictive technology in private passenger cars for safe, efficient, and comfortable driving is boosting the segment growth. Various ADAS functions, such as cruise control, utilize predictive technology to amend a vehicle's speed and other parameters accordingly. Moreover, the development of autonomous vehicles is also supporting the surging demand for predictive automobile technology across private users.

The insurers segment is anticipated to witness the fastest growth rate over the forecast period. The rising popularity of UBI auto insurance in developed and emerging economies supports segment growth. UBI is a type of automotive insurance that tracks driving behavior and mileage by leveraging in-vehicle telematics devices and sensors that are either self-installed or already integrated into the vehicle.

The driver's behavior is monitored through real-time and historical data, which is further utilized in predictive analytics to estimate the future behavior of the driver and the insurance premium quoted accordingly. Therefore, the rising adoption of UBI for reduced insurance premiums among the younger generation will accelerate the predictive automobile market growth. The fleet owners segment is also expected to witness significant growth in the coming years. Increasing adoption of predictive automobile technology to reduce the cost of operation and predict driver behavior for effective fleet management is likely to propel the segment growth in the coming years.

By Component Analysis

Increasing Demand for Reliable Predictive Analytics Software to Drive the Software Segment Growth

By component, the market is categorized into hardware and software.

The software segment dominated the market in 2022 and is likely to witness the fastest growth during the forecast period. Predictive automobile technology incorporates predictive analytics software to predict and correct future behavior, faults, and activities that may hamper the vehicle performance if not updated in real time. Therefore, increasing demand for reliable predictive analytics software for various applications, including UBI, commercial fleet management, and safe driving is anticipated to drive the segment growth.

The hardware segment is anticipated to grow substantially in the upcoming years. The factors driving the segment growth include semiconductor shortage and the rising cost of sensors and automotive electronic components such as LiDAR, telematics devices, and others.

By Application Analysis

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Increasing ADAS Equipped Vehicle Production to Propel the Segment Growth

By application, the market is segmented into ADAS, OBD, predictive maintenance, and UBI.

The ADAS segment held the largest market share in 2022. The increasing number of ADAS-equipped vehicle production and sales worldwide will fuel market growth. Additionally, the growing popularity of ADAS features among the populace for safe, efficient, and comfortable drive is expected to support the segment growth. Moreover, governments worldwide are taking initiatives to mandate ADAS systems to enhance road safety, which is expected to generate lucrative opportunities for the segment growth.

The UBI segment is expected to grow at the fastest pace over the projected years. UBI offers insurance premiums based on vehicle use, and driver behavior data tracked and analyzed by predictive automobile technology provides a low premium. Therefore, consumer preference to opt for UBIs for low auto insurance premiums will likely accelerate the market growth over the forecast period. OBD and predictive maintenance segments are also anticipated to witness significant growth as they minimize the vehicle's maintenance cost by predicting system maintenance requirements, further reducing the chances of critical system failure.

REGIONAL INSIGHTS

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Increasing Advanced Safety Feature-Equipped Vehicle Sales in Asia Pacific to Drive Market Growth

Regionally, the global market is studied across North America, Europe, Asia Pacific, and the rest of the world.

Asia Pacific held the largest predictive automobile technology market share in 2022. Increasing new-generation vehicle sales in China and Japan are anticipated to boost the market growth in the region. For instance, new energy vehicle sales in China are higher than in any other country worldwide. Additionally, supportive government regulations in China, coupled with the government's focus on banning outdated vehicles, will further influence the sales of new-generation vehicles, accelerating the market growth in the region.

Europe is expected to witness a substantial growth rate over the projected years. The growth is majorly driven by the growing adoption of electric vehicles equipped with advanced technologies owing to government support and the inclining preference of the populace toward green mobility. Additionally, government initiatives to mandate the essential safety features of ADAS will further support the market growth in the region.

North America held a significant market share in 2022. Technological advancement in the region, coupled with the surging advanced automotive sales, such as new generation electric vehicles, connected cars, and others, is anticipated to fuel the market growth. Additionally, increasing demand for road safety and the presence of major automotive technology players in the region are expected to support the market growth during the forecast period.

The rest of the world comprises Latin America and the Middle East & Africa. The expanding automotive industry in these regions is expected to fuel market growth.

KEY INDUSTRY PLAYERS

Key Players Focus on the Development of Advanced AI & ML-Based Technologies to Drive Market Growth

The market is significantly fragmented as several small & major predictive automobile technology players are operating. Almost all the leading/major players are focused on developing AI & ML-based technologies for automotive to support autonomous mobility. Additionally, the rising focus of automakers on launching vehicles with reliable connectivity and advanced safety features is anticipated to accelerate the market growth in the coming years.  

LIST OF KEY COMPANIES PROFILED:

• Continental AG (Germany)


• ZF Friedrichshafen (Germany)


• Valeo S.A (France)


• Aptiv (Ireland)


• Robert Bosch GmbH (Germany)


• Aisin Seiki (Japan)


• Garrett Motion (Switzerland)


• HARMAN INTERNATIONAL (U.S.)


• Visteon Corporation (U.S.)


• NXP (Netherlands)

KEY INDUSTRY DEVELOPMENTS:

• January 2022 – Chinese technology giant Baidu in a joint venture with Zhejiang Geely Holding Group announced its plan to mass-produce its first EV with level 2 autonomous driving technologies in 2023.


• November 2021 – Valeo launched its first multitask fisheye camera open-source dataset, WoodScape. With the launch of this new product, the company expects to level up the automated driving technology.


• July 2021 – One of the Indian startups known as Minus Zero has successfully developed an autonomous system based on machine learning and AI. The company stated that the system was designed for work in Indian traffic conditions.


• June 2021 – In partnership with Hyundai Motor Company, Garrett Motion launched new Predictive Control Software. The newly launched software solution focuses on Model-based Predictive Control (MPC) technology with Hyundai Motor Company.


• April 2021 – Volvo expanded its partnership with NVIDIA to use NVIDIA DRIVE Orin System-on-a-Chip (SoC) technology to power up the autonomous driving computer, which will be a part of next-generation Volvo models.

REPORT COVERAGE

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The report provides a detailed market analysis and focuses on key aspects such as leading companies, product types, vehicle types, design, and technology. Besides this, the report offers insights into the market trends and highlights key industry developments. In addition to the factors mentioned above, the report encompasses several factors that have contributed to the growth of the market in recent years.

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