Automotive Software Market size is set to grow by USD 30.88 billion from 2024-2028, Growing demand for differentiated in-car experiences boost the market, Technavio

NEW YORK, June 12, 2024 /PRNewswire/ -- The global automotive software market size is estimated to grow by USD 30.88 billion from 2024-2028, according to Technavio. The market is estimated to grow at a CAGR of over 14.4%  during the forecast period. Growing demand for differentiated in-car experiences is driving market growth, with a trend towards over-the-air (OTA) updates for software components. However, rising complexity in automotive software architecture leads to higher production costs for oems and suppliers  poses a challenge. Key market players include Access Co. Ltd., Alphabet Inc., Bittium Corp., BlackBerry Ltd., BorgWarner Inc., Elinext IT Solutions Ltd., Green Hills Software LLC, Hitachi Ltd., Information Technologies Institute Intellias LLC, Intel Corp., KPIT Technologies Ltd., Microsoft Corp., Net Solutions, NVIDIA Corp., NXP Semiconductors NV, Renesas Electronics Corp., Robert Bosch GmbH, Samsung Electronics Co. Ltd., Schaeffler AG, Siemens AG, and Sigma Software.

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Market Driver

The automotive software market has experienced significant growth due to the increasing installation of electronics and driver assistance features in vehicles. OEMs are focusing on remote Over-The-Air (OTA) updates to reduce costs and enhance customer experience. Benefits include savings on equipment, labor, and training costs, optimized testing cycles, and faster time-to-market for automobiles. Major OEMs like BMW, Daimler, and Tesla have already implemented OTA updates, making it a valuable product differentiator. This trend is expected to continue driving market growth during the forecast period. 

The Automotive Software Market is experiencing significant growth with key technologies such as connectivity, automation, and electrification driving innovation. Autonomous vehicles are a major trend, with companies focusing on developing software for vehicle control, sensor fusion, and machine learning. Telematics is another area of interest, with solutions providing real-time vehicle monitoring, diagnostics, and infotainment services.

Additionally, vehicle electrification is leading to the development of software for battery management systems, charging infrastructure, and energy management. The market is competitive with players like Tesla, Google, and Apple making significant strides. The future of the automotive software market lies in the integration of various technologies to create a seamless and connected driving experience. 

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Market Challenges

•         The automotive software market faces significant challenges due to the increasing complexity in vehicle architecture. OEMs and suppliers must invest heavily in research, development, and testing to ensure reliability, safety, and regulatory compliance. These investments lead to increased production costs for advanced software solutions, straining OEM profit margins and limiting innovation for smaller suppliers. Suppliers also face pressure to develop and support intricate software architectures, which requires substantial resources and extensive testing. These factors will continue to impact the growth of the automotive software market.

•         The automotive software market faces several challenges in the implementation and integration of various technologies. These include adaptive and autonomous driving technologies, connectivity and telematics, cybersecurity, and electric and hybrid vehicle systems.

•         The complexity of these systems requires a high level of collaboration between automotive manufacturers, software developers, and technology providers. Additionally, the rapid pace of technological advancements and increasing customer expectations for advanced features add to the challenges. The convergence of these technologies necessitates a comprehensive approach to software development and implementation in the automotive industry.

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Segment Overview 

1. Application 
• 1.1 Safety system
• 1.2 Infotainment and telematics
• 1.3 Powertrain
• 1.4 Chassis
2. Product 
• 2.1 Application software
• 2.2 Middleware
• 2.3 Operating system
3. Geography 
• 3.1 APAC
• 3.2 Europe
• 3.3 North America
• 3.4 South America
• 3.5 Middle East and Africa

1.1 Safety system-  The automotive software market is experiencing significant growth due to the increasing demand for connected and autonomous vehicles. Automakers and tech companies are investing heavily in developing advanced software solutions for improved vehicle performance, safety features, and enhanced user experiences. This trend is expected to continue, with the market projected to reach substantial revenue by 2025. Key players in the market include Bosch, Continental AG, and Autodesk, among others. These companies are focusing on innovation and collaboration to meet the evolving needs of consumers and regulatory bodies.

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Research Analysis

The automotive software market is experiencing significant growth due to the integration of advanced technologies such as 5G, autonomous vehicles, and electric vehicles (EVs). These innovations are revolutionizing the automotive industry by enhancing in-vehicle applications, including body control, comfort, infotainment, and telematics.

5G technology enables car-to-car communication, ensuring seamless data exchange and improving safety features like lane-keeping assistance, adaptive cruise control, and collision avoidance. Commercial vehicles also benefit from these advancements, leading to the development of embedded systems tailored to their specific needs. The market for automotive software is expected to expand as these technologies become more prevalent in passenger cars and other vehicle segments.

The Autonomous Vehicle market is experiencing significant growth due to the increasing demand for advanced driving technologies. The market encompasses various software solutions such as ADAS (Advanced Driver Assistance Systems), V2X (Vehicle-to-Everything) communication, and autonomous driving software. These technologies enable vehicles to sense their environment, make decisions, and interact with other vehicles and infrastructure.

The market is driven by factors such as government regulations, consumer preferences, and technological advancements. The future of the Autonomous Vehicle software market lies in the development of more sophisticated and reliable systems that can ensure safe and efficient transportation. The market is expected to grow at a steady pace in the coming years, with a focus on improving safety, reducing emissions, and enhancing the overall driving experience.

Table of Contents:

1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation

• Application
• Safety System
• Infotainment And Telematics
• Powertrain
• Chassis
• Product
• Application Software
• Middleware
• Operating System
• Geography
• APAC
• Europe
• North America
• South America
• Middle East And Africa

7 Customer Landscape
8 Geographic Landscape
9 Drivers, Challenges, and Trends
10 Company Landscape
11 Company Analysis
12 Appendix

About Technavio

Technavio is a leading global technology research and advisory company. Their research and analysis focuses on emerging market trends and provides actionable insights to help businesses identify market opportunities and develop effective strategies to optimize their market positions.

With over 500 specialized analysts, Technavio's report library consists of more than 17,000 reports and counting, covering 800 technologies, spanning across 50 countries. Their client base consists of enterprises of all sizes, including more than 100 Fortune 500 companies. This growing client base relies on Technavio's comprehensive coverage, extensive research, and actionable market insights to identify opportunities in existing and potential markets and assess their competitive positions within changing market scenarios.

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SOURCE Technavio