Connected car market expected to hit $212.7 billion by 2027

The global connected car market size is expected to reach USD 212.7 billion by 2027 (compared to USD 42.6 billion in 2019) at a CAGR of 22.3%, according to a recent report from global research company, MarketsandMarkets.

Connected cars are vehicles that can share internet access and transfer data with other devices both inside the car and remotely.

The report “Connected Car Market by Service,” which is forecasted to 2027, analyzed several factors, including the end market, network, in-vehicle connectivity trends, government investments and incentives, and smart transportation methods.

Autonomous technology is also advancing, with many manufacturers planning for autonomous vehicle options within the next five years. There are five different levels of autonomous automation, including:

Level one – zero automation; the driver performs all vehicle operations
Level two – partial automation; the vehicle assists with certain operations such as steering
Level three – conditional automation; the vehicle controls several critical functions such as braking
Level four – high automation; the vehicle is capable of monitoring and responding to road events, including when to change lanes
Level five – complete automation

One example of an early-stage level three is the upcoming Cadillac CT6 model, which will offer a semi-autonomous “super cruise” feature that allows hands-free driving assistance on compatible highways.

Similarly, Audi will also be incorporating its high-end level three, semi-autonomous technology in its next A8 model. It will include the automaker’s AI-based traffic jam pilot that can take over steering (at speeds of up to 65 km/h | 40.4 mph) on specific routes when traffic is congested.

Other key manufacturers in the connected market include Bosch, Continental, HARMAN, Airbiquity, and Visteon, and others.

Markets
One of the main reasons to expect growth in the connected car market is the increased demand for infotainment (a type of media in vehicles that combines information and entertainment) and navigation services. This is particularly in China, India, Japan, and South Korea.

The industry is also affected by several other factors including population growth, urbanization, the economy, and new safety regulations in many regions, such as Japan and South Korea.

In 2017, the Chinese Ministry of Industry and Information Technology (MIIT) and the Standardization Administration of China (SAC) published a draft to establish national standards for China’s Intelligent & Connected Vehicles (ICV). As a result, China will likely soon introduce vehicle and road safety management. Baidu and Alibaba, which are the biggest technology corporations in China, are pushing to develop platforms for connected cars.

Japanese automotive businesses are also developing and implementing connected car assistance features. In 2019, Airbiquity announced that it became a part of the Japan Automotive Software Platform and Architecture (JASPAR) — an organization committed to advancing the standardization of in-vehicle software and networks to improve development efficiency and reliability.

In India, the auto industry has had great potential but there have also been challenges.

“The backbone of the auto business is its blue-collar category. Due to its emergence and survival as an unorganized belt, it has not scaled sufficiently,” said Munira Loliwala, Business Head – EMPI, TeamLease Services, in a recent press statement. This may affect the connected car market.

“Lack of experiences related to drawings and projects, gaps in programming abilities, insufficient interpersonal growth, and inadequate training department within the component industry remains a challenge,” Loliwala added.

However, Indian manufacturers provide several auto-related components including engine parts, drive transmission and steering parts, frame and chassis, equipment and electrical parts, etc. It is estimated that the auto components business is a $57 billion industry with many job opportunities. With the right strategy, the connected car industry could provide even more.

“The Indian auto industry plans to create nearly 65 million additional jobs by 2026 — about 32 million personalities are employed directly and second-hand by the sector, out of which at least 65% are contract workforce,” said Loliwala. That means there are great opportunities in India for auto manufacturers and engineers.