The Automotive Software Market Size is poised for significant growth, with projections estimating its value to reach $32.3 billion by 2030. This growth is fueled by the rapid advancement of vehicle technologies, particularly in areas such as autonomous driving, vehicle connectivity, and electrification. Modern vehicles are increasingly reliant on sophisticated software to manage and optimize various functions, from advanced driver-assistance systems (ADAS) to in-car infotainment and powertrain control. Additionally, the rise of electric vehicles (EVs) has led to greater demand for software solutions that can efficiently manage battery usage, energy recovery, and charging processes. As automotive OEMs and tech companies collaborate more closely, the software component of vehicles is expected to account for an ever-larger share of total production value.
Moreover, the growing emphasis on vehicle safety and cybersecurity is further driving the demand for robust automotive software solutions. With regulations becoming stricter across major markets, OEMs are investing heavily in software that enhances vehicle security and meets compliance requirements. The shift toward connected and autonomous vehicles is also contributing to the expansion of the market, as these technologies require complex software systems to operate effectively. Key players in the automotive software industry are focusing on developing scalable and flexible solutions to cater to evolving consumer demands and regulatory standards, supporting the market’s expected growth trajectory through 2030.
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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.
Market Driver: Advancements in infotainment systems
Increasing competition among automotive OEMs for best-in-class infotainment systems in their latest vehicles is a major driving factor for the evolution of automotive software market. Apart from music and basic navigation, the OEMs have also been working with leading mapping & localization providers (such as TomTom Harman), navigation providers (Android Auto and Apple Carplay), and infotainment system providers to provide best-in-class in-vehicle experience. Modern automobiles have infotainment systems with complex interfaces, smart navigation, larger touchscreen displays, voice assist, smartphone integration, and driver assist systems.
Opportunity: Developments in automated driving and software-defined vehicles
Automakers have started providing automated driving and vehicle safety systems in their vehicles in recent years. This is mainly led by regulations for vehicle safety systems and increasing demand for safer vehicles. This trend has led to over 60% of newly sold vehicles in the US having Level 2 ADAS systems and over 80% coming with at least basic ADAS features in 2023. A similar trend is seen across China, South Korea, Japan, and most European countries. These systems’ function based on inputs from various vehicle sensors, combining their inputs for vehicle and pedestrian safety. During the process, a vast amount of data is generated for implementing such decisions with algorithms in the vehicle’s computer system. Hence, automotive software is the key to implementing advanced driver assistance systems in vehicles.
“Germany to lead the automotive software market in Europe”
Germany is expected to have a sizeable market for automotive software among all the European countries. The most significant factors supporting the growth of the automotive software market in Germany are the penetration of premium passenger car brands with high-end software applications and government mandates regarding safety. The high sales of premium vehicles, such as the Mercedes-Benz S-Class, BMW 7 Series, Mercedes-Benz G-Class Audi A8, and Audi S8, are expected to drive the automotive software market in Germany during the forecast period.
Key Players
The automotive software market is dominated by global players such as Robert Bosch GmbH (Germany), NXP Semiconductors (Netherlands), NVIDIA Corporation (US), BlackBerry Limited (Canada), and Continental AG (Germany), among others. These companies adopted new product development strategies, expansion, partnerships & collaborations, and mergers & acquisitions to gain traction in the market.
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