The global automotive software market size is projected to reach USD 32.3 billion by 2030 from USD 19.0 billion in 2023, at a CAGR of 7.8%, during the forecast period 2023-2030. The amount of software in vehicles has increased exponentially with the growing demand for automotive safety and convenience. This is evident from software used across various new-gen automotive applications, including ADAS/AD, advanced navigation systems, intelligent infotainment systems, and connectivity.
New and legacy OEMs are developing their future vehicle lineup using a software-first approach. They have also announced plans to develop specialized software to create new revenue streams based on add-on features for a more customized driving experience. Mercedes Benz, for instance, is targeting USD 1.06 billion from software subscription earnings in 2025 and plans to double its revenue by 2030 with software-based earnings. Similarly, Stellantis plans for USD 22.5 billion in software subscription earnings through value-added services by 2030. Thus, the overall role of automotive software is expected to continue expanding over the forecast period.
Download PDF Brochure @ https://www.marketsandmarkets.com/pdfdownloadNew.asp?id=200707066
Global automotive software market Dynamics
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 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.Further, advancements in infotainment systems with a shift to digital cockpits and intelligent AI integration are expected to drive the next generation of infotainment systems. This would be accompanied by shifting consumer demand for smart vehicles and increased comfort systems by integrating value-added services. OEMs are already developing such software for their future vehicle range. As per automotive software industry experts, the software will be the primary differentiator among vehicles in the future, while the hardware will start being similar across product ranges with the shift to a modular manufacturing approach.
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.Leading automakers are investing in developing better software for their next-generation vehicles with some degree of automated driving applications. Tesla, for instance, announced plans to invest USD 10 billion in 2024 for automated driving in the coming years. Similarly, in 2023, Mercedes Benz announced an investment of ~USD 68 billion by 2026 to develop automated driving and SDV technology. The major investment in these systems will go towards automotive software, with these companies planning to make software a secondary income source by the end of the coming decade.
ASIA PACIFIC Region Holds the Largest Share of the Automotive Software Market
Key regional manufacturers are focusing on strategic partnerships with tier 1 component providers and software providers to keep up with the changing consumer needs. Further, leading technology companies in China are developing software for ADAS systems and connected vehicles. The region is also the software development hub of global OEMs, owing to the lower cost of software outsourcing. This has resulted in competitive OEMs in this market integrating best-in-class software. In China, the largest automotive market in the region, cars with ADAS have become relatively common, with more than 50% of vehicles coming with ADAS features. Further, domestic automakers such as XPENG, Li Auto, ZEEKR, and NIO are also leading the SDV shift. Similarly, Hyundai from South Korea has also integrated automotive software for ADAS, Connectivity, and other features with OTA updates through its 42.dot subsidiary in the region.
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.
Request Free Sample Report @ https://www.marketsandmarkets.com/requestsampleNew.asp?id=200707066
