Automotive Software Market Trends [2023-2030]

The global automotive software market [274 Pages Report], study involved four major activities to estimate the current size of the automotive software market. Exhaustive secondary research was done to collect information on the market, the peer market, and model mapping. The next step was to validate these findings, assumptions, and sizing with the industry experts across value chains through primary research. The bottom-up and top-down approaches were employed to estimate the total market size. After that, market breakdown and data triangulation were used for determining the market size of segments and subsegments.

The global automotive software market size is projected to grow from USD 19.0 billion in 2023 to USD 32.3 billion by 2030, at a CAGR of 7.8%. The rise in focus towards software-defined vehicles paired with increasing penetration of ADAS features in vehicles are expected to increase the demand for automotive software solutions. Also, the strong government support for vehicle safety paired with rising adoption of software-over-the-air (SOTA) updates are anticipated to promote the revenue growth of automotive software market.

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Operating system segment is expected to have significant share in the global automotive software market

The operating system is expected to be a noticeable segment in the automotive software market, as it controls the core capabilities of the vehicle while keeping passengers and the driving environment safe, which makes it the most important part of the software. Additionally, the automotive operating system market is expected to grow significantly with the growing adoption of connected car technologies. As such, operating system (OS) plays a critical role in connected vehicles. The OS provides the platform for the telematics system to run on and provides the features and functionality that allow the vehicle to communicate with other devices and services.

ADAS & safety systems segment is expected to witness significant growth rate in the global automotive software market during the forecast period

The ADAS & safety systems segment is anticipated to have lucrative growth opportunities during the forecast period. Government mandates and increasing awareness about vehicle safety are expected to fuel the demand for ADAS & safety systems. In July 2023, the US federal government’s National Highway Traffic Safety Administration (NHTSA) proposed mandatory regulation that could significantly impact road safety. The autonomous driving segment is also expected to show significant market growth during the forecast period. Automotive OEMs are taking the initiative to develop and bring advancements in autonomous driving. For example, in July 2023, Volkswagen Group (Germany) launched its first autonomous driving test program in the US. Such developments and government initiatives will boost the automotive software market.

Automotive Software Market:

Driver: Advancements in infotainment systems

There is strong competition among automotive manufacturers to deploy cutting-edge infotainment systems for their upcoming vehicle models. For example, Mitsubishi Motors Corporation (Japan), Nissan Motor Co., Ltd. (Japan), and Renault (France) have adopted Google’s Android operating system for their next-generation infotainment systems. In November 2022, Hyundai Motor (South Korea) also selected NVIDIA drive infotainment and AI platform for all future Hyundai, Kia, and Genesis models.

The changing consumer preference pertaining to wireless technology, along with the steady increase in demand for seamless connectivity of phones with passenger cars, is expected to drive the in-vehicle infotainment segment. This, in turn, will increase the demand for in-vehicle infotainment systems, thereby supporting the revenue growth of the automotive software market during the forecast period. As such, automotive software (operating systems such as Android, Linux, and QNX) are integral parts of the in-vehicle infotainment systems.

Opportunity:Developments in semi-autonomous and autonomous vehicles

Autonomous vehicles have become a decisive focal point for automotive stakeholders. They have invested billions of dollars and best resources into completing the task of making autonomous vehicles a reality. Currently, vehicles are equipped with various electronic components to sense their environment and exchange signals with external entities. Behind the whole communication process, a vast amount of data is generated for implementing machine learning with algorithms in the vehicle’s computer system. This would help OEMs, automotive Tier I suppliers, and non-automotive players to make autonomous vehicles a reality. Hence, reliable automotive software is the key to implementing AI and developing semi-autonomous and autonomous cars.

The Asia pacific automotive software market is projected to hold the largest share by 2030

Asia Pacific is projected to be the largest automotive software market by 2030. Countries such as China, Japan, and South Korea are expected to take the lead in autonomous driving technology in the coming years. Leading automotive manufacturers in this region, including Honda Motor Co., Ltd. (Japan), Toyota Motor Corporation (Japan), and Hyundai Motor Company (South Korea), leverage the advantages of safety systems and have made essential safety features a standard across their models. Toyota Motor Corporation (Japan) designed its Toyota Safety Sense ADAS package, which comprises a pre-collision system with pedestrian detection, dynamic radar cruise control, lane departure alert, automatic high beam, lane tracing assist, and road sign assist. This will increase the demand for passenger vehicles in the region with advanced safety features by end users,? boosting the market for automotive software as these features require automotive software for efficient functioning.

Key Market Players

The global automotive software market is dominated by major players such as Robert Bosch GmbH (Germany), BlackBerry Limited (Canada), Continental AG (Germany), NXP Semiconductors (Netherlands), and NVIDIA Corporation (US), among others.

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