Automotive Software Market To Generate $78,894.2 Million Revenue by 2030
Factors such as the burgeoning demand for connected cars, surging adoption of innovative technologies for advanced user interface, and rising research and development (R&D) activities in autonomous driving technology are expected to drive the automotive software market at a healthy CAGR, of 12.4%, during the forecast period (2020–2030). Additionally, the increasing demand for advanced automobiles will also catalyze the market growth in the forthcoming years. Owing to these factors, the market revenue will surge from $28,214.6 million in 2019 to $78,894.2 million by 2030.
The surging deployment of innovative technologies for advanced user interface is one of the major growth drivers for the market, worldwide. Various automobile manufacturers are increasingly integrating software into their offerings, as it has become essential to design automotive technologies that are more personal and human. For example, the Model S by Tesla Inc. is equipped with a few manual controls on or near the steering wheel and many automatic controls for secondary functions such as media player, rear-view mirror, cell phone, and climate control.
Currently, the increasing need for over-the-air (OTA) software updates, owing to the rising dependency of vehicles on software, is becoming a prominent trend in the automotive software market. Several automakers are deploying OTA technology in their vehicles to update the software of their offerings at regular intervals, as it offers more clearance at higher speed. For instance, Tesla Inc. uses OTA technology to modify or fix automobile systems, which include recalling charger plugs or changing the suspension settings of vehicles.
At present, the automotive software market is fragmented in nature, due to the presence of numerous players, such as SAP SE, Green Hills Software LLC, NVIDIA Corp., Ignite Ltd., Alphabet Inc., Continental AG, NORDSYS GmbH, NXP Semiconductors N.V., Connexion Telematics Ltd., Airbiquity Inc., Renesas Electronics Corp., CloudMade, Robert Bosch GmbH, Intellias Ltd., Harman International Industries Inc., and BlackBerry Ltd. In recent years, these companies have taken strategic measures, such as partnerships, to consolidate their position in the market.
The function segment of the automotive software market is categorized into development, integration, and validation and verification. Under this segment, the development category is expected to register the fastest growth during the forecast period, as comprehensive software offers improved functionality for a range of products and provides better value to customers. The increasing deployment of comprehensive software in vehicles helps in managing an array of automobile components, ranging from advanced drivetrains to infotainment systems.
According to P&S Intelligence, Asia-Pacific (APAC) accounted for the largest share in the automotive software market in 2019, due to the increase in purchasing power of customers, growth in economy, and presence of the largest automobile market, in the region. Moreover, the booming demand for advanced automobile features, owing to the economic development, will also drive the demand for automotive software in APAC. Additionally, the surging sales of electric vehicles in China, primarily on account of the growing environmental concerns, will also augment the regional market growth.
Thus, the increasing adoption of advanced technologies in vehicles and the surging need for OTA software updates will support the market growth in the forecast years.