Published: April 20, 2016
The global connected car market size is expected to reach USD 180.30 billion by 2022, according to a new study by Grand View Research, Inc. Surging consumer demand, constant need for connectivity, increased dependency on technology and the growing number of tech-savvy people are some of the factors expected to boost global connected car market growth.
Connected cars offer connectivity on wheels providing comfort, performance along with safety and security. Such an advanced technology enables the driver and passengers to connect with various online platforms that facilitate real-time communication on the go.
The connected car market has the potential to significantly boost revenues of automobile manufacturers over the next five to seven years. Car manufacturers are expected to deliver the right mix of application and product packages for the right customers, and must systematically invest in R&D if they are willing to maintain their technological leadership.
The industry is expected to get a major push from the governments across the nations. The United States Department of Transportation in association with the National Highway Traffic Safety Administration has announced plans for a regulatory proposal that would make it mandatory for auto manufacturers for the installation of vehicle-to-vehicle communication devices in every automobile they produce in the coming years.
Issues pertaining to safety and security such as unauthorized access to multiple automobile applications or breaking into the in vehicle connectivity system can act as a restraint for the connected car market. Moreover, unavailability of seamless internet connectivity across regions may pose a challenge to connected car industry growth.
Driver assistance includes a number of advanced technologies that help improve the actual performance of the vehicle. Systems such as parking assists and cruise control that autonomously steer the vehicle are being increasing being introduced across all car segments thus ensuring driver comfort and convenience.
Mobility management is comprised of systems that enable drivers to reach their destination in the least possible time, safely, at reasonable cost, and with optimal fuel consumption. Safety technologies include external danger warnings for drivers regarding severe weather and road conditions along with the vehicle’s own internal autonomous collision protection and emergency functions. The safety systems segment accounted for over 35% of the revenue share in 2014 and is projected for growth owing to increasing government and transport authority mandates across the globe in recent times.
Asia Pacific connected car market accounted for over 23% of the global share in 2014 and is projected to grow at a CAGR close to 29% from 2015 to 2022. Increasing smartphone penetration, deployment of high speed internet services, and declining average selling price in the region are expected to push the sales for such smart vehicles.
Backward integration and technology licensing are expected to be commonly adopted strategies by industry participants. With the high production capabilities, it becomes easier and profitable for automobile manufacturers to perform backward integration and produce their own connected vehicle devices and applications. Manufacturers resort to mergers, acquisitions and strategic alliances with technology providers as their key growth strategy to make their presence felt in the industry.
Source: Grand View Research