Automotive Electronics Market Analysis

Automotive Electronics Market Analysis

According to the vehicle type, the market is divided into two-wheeler, three-wheeler, passenger car and commercial vehicle. The number of vehicles is rising year-on year due to increase in transport activities and people desire to have their own vehicles. The companies operating in the automotive electronics witness emerging opportunities to help equip the vehicles on road with the electronic components that provides users safety and an enhanced experience while driving.
 

• The market size of passenger cars in automotive electronics was 200 billion in 2024 and it was the fastest growing market with a CAGR of 9.4%. The passenger cars had been continuously growing as according to the International Organization of Motor Vehicle Manufactures (OICA), passenger car sales in 2023 were 65,272,367. This shows the bulk of passenger cars’ availability and thus provides a great opportunity for the automotive market to design and build components that provide the passengers with personalized experience in the cars by upgrading the driving system or the engine management system.
   
• The availability of passenger cars provides opportunities for the players in the automotive electronics market to help transform the cars by incorporating modern systems that provide safety to the vehicle and proper update on the functioning parameters of the car.
   
• The rise in users’ preferences for infotainment systems in cars has also pushed the boundaries for the automotive electronics manufacturers to come up with new developments and innovations.
   
• As the adoption of AI is increasing in every sector, the automobile sector is also embracing the change in dynamics and players in the market are leveraging AI at a rapid pace. For instance, in December 2024, UnoMinda launched a new touchscreen infotainment system, WTUNES-464DN-GPT which has in built integration of AI though Generative Pre-trained Transformer (GPT).
   
• The commercial vehicle market is expected to reach a market value of USD 65.8 billion by 2034. According to the International Organization of Motor Vehicle Manufactures (OICA) the global sales of commercial vehicles were 27,452,301 units in the year 2023. With such a high number of commercial vehicles presence there is an increase in the demand for automotive electronics due to the need for safer systems such as ABS or ADAS to protect the vehicle and people inside the vehicle.
   
• The Light Commercial Vehicle (LCV) market held a market size of USD 24.8 billion in 2024. Light commercial vehicles (LCV) market is steadily rising as stated by International Energy Agency (IEA) that the sales share of LCV in the electric section has increased to 4% in 2023 as compared to 2022 which was 3%. This suggests that the electronic components requirement will also gain momentum for new availability of LCV and existing ones on the road.
   
• Heavy commercial vehicle market is expected to grow and reach a value of USD 19.8 billion by 2034. Heavy commercial vehicles are gaining traction due to their ability for heavy duty works in the various sectors. The world is aiming towards green mobility transformation which provides path for the electronic component manufactures to innovate and provide sustainable solutions. For instance, in January 2025, Volvo launched its FH Electric truck to carry heavy duties. The truck provides a horsepower of 666 Hp and offers a range of 300 km.
   
• The three-wheeler market is projected to grow and reach a value of USD 64.4 billion by the year 2034. The adoption of three-wheelers, specifically electric, is increasing to address the demand of urban transportation which paves the way for automotive electronics to expand in this market.
   
• The two-wheeler market constituted a market size of USD 16.3 billion in 2024. The market reflects opportunities for the expansion of automotive electronics players due to the fact the bike riders require connected experience. Players in the automotive market such as Bosch are catering to the needs of two-wheeler bikes in providing platforms which offer high resolution and advanced connectivity features along with customizable interface. The Bosch TFT connect platform allows the riders to have crystal clear image in any weather.
   
• The growing number of vehicles and the changing dynamics of the sectors such as transport and industries which involve transferring heavy loads brings the attention of the automotive electronics to develop the systems of the vehicle for the smooth transition capable of addressing the sustainable needs and the aim to reduce carbon emissions. Players in the automotive market are leveraging technology advancement and integrating AI into the car and vehicles system that provides better real time analysis.
   

The automotive electronics market when divided by point of sale, encompasses original equipment manufacturer (OEM) and aftermarket. The market is developing as the new systems are being deployed during the manufacturing process. OEMs are seeking the opportunities to develop such systems that can be integrated into the automobiles during its production process. The consumer rising tendency to upgrade the existing systems also provide the stakeholders in the automotive electronics to modify the existing systems in the aftermarket.
 

• OEM market held a market share of 77.7% in 2024. OEMs are set to gain advantage by focusing on the vehicle systems which are autonomous in nature such as antilock braking system (ABS), automatic and others as modern cars have more electronic devices than ever and with the technological advancement increasing in automotive sector the OEMs have wider scope to produce automotive parts that can be used
   
• With the advent of connected cars concepts there has been an increase in the OEMs that have started launching their own mobile phone apps. The purpose of these apps is to enhance the experience of the users by providing several functions such as remote vehicle check and vehicle control. This progress in the automotive market is providing gateways for OEMs to flourish in the market.
   
• For OEMs to progress in the automotive electronics market there is a requirement to follow standards such as ISO 26262, VW 8000 and other related norms.
   
• By 2034, the aftermarket is anticipated to reach USD 114.8 billion in value. Increasing shift towards electrification and the goal of meeting sustainability needs is leading to the growth of market and acting as a promoter for the aftermarket. The companies are marking the opportunities with the millions of commercial cars available to be equipped with telematics devices for the collection of data about vehicles which meet the Automotive Industry Standards (AIS) providing opportunities for the aftermarket.
   
• The growing ergonomics of the car and increasing interest of OEMs to develop electronics systems that caters to the uprising needs of the consumers has led to the development of automotive electronics market. The support from the aftermarket has added a benefit to expansion of the market with new innovative system upgradation for vehicles. Thus, helping the market to progress at a faster rate.
   

Segmentation of automotive electronics market by application consist of Advanced Driver Assistance System (ADAS), body electronics, infotainment & communication, powertrain, and safety systems. The application revolves around the automotive systems that can be implemented in the vehicles to help transform the vehicles which will have better human-machine interface and increase safety systems. The passengers desire to have infotainment systems that is well connected is also featuring the progress of the market.
 

• The ADAS market is projected to be the fastest growing market with a CAGR of 9.9% for the forecast period from 2025 – 2034. The rising inclination towards fast image processing and precise object recognition has prompted the segment to grow rapidly. The organizations are expanding in this field to captivate the growing need of ADAS. For instance, in September 2024, Renesas Electronics Corporation expanded its popular R-Car family of system-on-chips (SoCs) for ADAS application. The device delivers robust AI processing and CPU performance capabilities.
   
• The market size of Adaptive Cruise Control market was USD 3.1 billion in 2024. Adaptive Cruise Control (ACC) forms the basis of preventing major accidents by taking control of the vehicle. The technology uses radar sensors and activates sensing the within the detection range. ACC operates well even in heavy traffic. This is due to the integration of automotive electronics into vehicles and the rising concern of road safety increases its presence in the market. Companies are leveraging technology and penetrating in the automotive market. For instance, in December 2023, Valeo produced its 20 millionth front camera system containing Mobileye technology. This camera helps with safety features such as adaptive cruise control, lane keep assistance and autonomous emergency braking.
   
• Blind spot detection market is anticipated to reach a market value of USD 5.5 billion by 2034. Blind spot detection is gaining popularity due to the increased number of accidents on roads. The technology is becoming useful to prevent plane crashes as according to the Insurance Institute for Highway Safety (IIHS), vehicles equipped with blind spot monitoring reduce lane change crashes by 14%. The National Highway Traffic Administration (NHTSA) mentioned that the combination of blind spot monitoring and rear cross-traffic alert can help reduce rear crashes by 78%.
   
• The Parking Assistance market is projected to grow at a CAGR of 9.2% in the forecast period. The development across the automotive market for automatic parking and assistance to drivers is forming a vital part of automotive electronics as it includes technologies to facilitate parking manoeuvres. The parking assistance helps in minimizing the collision risk, improves the convivence of parking at confined space and also saves time. This kind of technology present in the market expands the market even more.
   
• Automated emergency braking market held a market size of USD 5 billion in 2024. The demand for this type of automated solution is growing as it prevents major accidents and with the regulation and norms the market sees growth opportunities. The National Highway Traffic Safety Administration (NHTSA) highlights the Federal Motor Vehicle Safety Standard that requires Automatic Emergency Braking (AEB) and Pedestrian Automatic Emergency Braking (PAEB) system on light vehicles. As the AEB systems use sensor technologies and sub-systems it is going to help the automotive electronics market to excel.
   
• By 2034, the night vision market is expected to grow and reach a value of USD 2.2 billion. The market highlights the growing importance of night vison systems in vehicles and creates scope of development for automotive manufacturers. During the nighttime the risk is higher with the low visibility which could result in some major accidents. Players in the automotive market are developing infrared and thermal technologies which is increasing the demand for it in the current market. For instance, Thermal Master’s NV300 MAX system helps to detect heat sources under 300-meter range.
   
• Lane department warning market is anticipated to grow at a CAGR of 9.7% in the forecast period. With the growing risk of lane accidents, the lane department warning system is witnessing growth. Engineers in the automobile industry are focusing on developing ways to reduce such misshapen on the roads which is leading to involvement of electronics components development and deployment into the existing vehicles.
   
• The body electronics market is expected to reach a value of USD 129.7 billion by 2034. The body electronics segment is gaining momentum since the system involved in this is the modules that enhance the security, comfort and functionality of vehicles.
   
• Infotainment and communication market had a market size of USD 34.6 billion in 2024. The rising trend of connected cars and growing IoT is helping the market to progress in the implementation of infotainment and communication systems in vehicles.
   
• Audio market is anticipated to reach a value of USD 21.1 billion by 2034. The enhancement of car cabin experience is growing with the use of technology such as AI enabled audio processors and radar sensors. Thus, it is acting as a catalyst for the automotive electronics manufacturers to develop by integrating new audio system for the purpose of enhancing the consumer personalized experience inside the car.
   
• Display market constitute a market size of USD 6.2 billion in 2024 and it is anticipated to grow at a CAGR of 7.1%. The increase in interest in display for cars is highlighting the trends that automotive electronics manufacturers are working towards improving automotive display within the cars. For instance, in November 2024, LG display showcased its 57-inch Pillar to Pillar (P2P) LCD for cars at Consumer Electronic Show (CES) 2024.
   
• The navigation market is projected to grow and reach a market value of 22.6 billion by 2034. Navigation is another important part of modern vehicles. As navigation is required in vehicles, the automotive electronics market is set to grow and provide the system that helps the user navigate easily.
   
• It’s expected that the dead-up display will see a market value of more than USD 7.3 billion by 2034. The companies are incorporating new head-up display technologies which serve the purpose of making cars safe to drive. For instance, the maker of car technology, Harman stated that this technology with low halo effect ensures readability in all conditions inside the car.
   
• Communication market held a market value of USD 5 billion in 2024. The changing preferences of the passengers in cars to have proper communication is acting as a catalyst for automotive electronics market to develop systems which not only provide communication system in the car but also add personalization to the same.
   
• The powertrain market dominated the market in the application segment of automotive electronics, accounting for market size of USD 112.5 billion in 2024. This is since there is growing innovation in powertrain solutions for addressing the need for low emissions and high fuel efficiency without compromising the dynamics of vehicle’s performance.
   
• With the rising requirement of automotive powertrains ICs, manufacturers are working to develop automotive conventional powertrain ICs for engine management systems, transmission control systems and alternator electronics. The products are being designed to meet the standards to be implemented in electric and hybrid vehicles.
   
• The engine controllers market is expected to grow at a CAGR of 9.5% for the forecast period. Engine controllers are becoming a requirement for the management of the vehicle system. This is creating demand for a rise in production of the controllers which can be incorporated into the vehicle system.
   
• Transmission drivetrains market constituted a market size of USD 53.4 billion in 2024. Transmission drivetrains are another important part which provides the traction power from the engine to the wheels. Companies are joining hands to build and integrate these systems into new hybrid electric vehicles. For instance, in September 2024, Allison Transmission partnered with Cummins Inc. to build a hybrid electric propulsion system. They aim to meet the Environment Protection Agency (EPA) greenhouse gas emission standards for heavy duty vehicles- Phase 3 and provide low emissions propulsion solutions.
   
• By 2034, the exhaust market is anticipated to reach a value of USD 82.4 billion. There is development in the exhaust system for the aim of reducing pollution into the environment. There are facilities centers being formed specifically developing the exhaust system for the automobile market. For instance, in October 2023 a joint venture by Eberspaecher and AAPICO Hitech opened a plant in Thailand to deliver exhaust system for pickup trucks.
   
• xEV market is expected to grow at a CAGR of 14.8% for the forecast period. The increase in technology adoption has made the xEV market expand as different types of electric vehicle such as fully electric, hybrid electric or plug-in hybrid electric are shaping the future of the automotive market.
   
• The market value of safety systems was USD 58.8 billion in 2024. To reduce the risk of accidents automotive components are in demand that can protect the vehicles from getting damaged. The safety system such ABS, AEB and anti-locking of braking systems are needed for the rising modern vehicles.
   
• The application of automotive technology encircles the growing trends of vehicles dependency on systems that provide safety features, and the infotainment features desired by the users. The opportunities are rising for the automotive market to captivate on the needs of the vehicle and cars system.
   

The Asia Pacific region in the automotive electronics market is projected to grow significantly, reaching USD 301.8 billion by 2034. The region has high preference for the automotive electronic components due to some major countries focus on producing electric mobility solutions. The region has been progressively adopting sustainable practices to reduce the carbon emissions which gives a boost to the automotive sectors across the Asia Pacific region. With the presence of companies such as Aisin Corporation and Denso Corporation the region is poised to excel in the automotive market.
 

• China automotive electronics constituted a market share of 51% in 2024. In China, there is growing adoption of electric vehicles which brings opportunities for manufacturers producing automotive electronics to excel in this country as the number of new electric car registration touched 8.1 million in 2023. China also exported 4 million cars in 2023, out of which 1.2 million were EVs. Companies are developing solutions to assist the changing preferences of users and provide automotive solutions such as ADAS.
   
• China is also rapidly adopting AI into the automotive market which is also the reason for this country to grow in market. For instance, in November IC distributor Zenitron expanded its AI product offering leading to the strengthening of the country’s presence in automotive.
   
• India is projected to grow in the automotive electronics market and is expected to register a CAGR of 9.1% in the forecast period. The growing electric production of passenger vehicles reflects the strong growth of India in automobile industry. This provides opportunities for the manufacturers dealing in automotive component manufacturers to develop with the rising trend. In September 2024, total production of passenger vehicles, three-wheeler, two-wheeler and quadricycles was 27,73,039 units. Also, according to NITI Ayog and Rocky Mountain Institute (RMI) the India’s EV finance is likely to reach USD 50 billion by 2030. India is aiming to increase the automobile exports as the number of exports was 47,61,487 units in 2023. This is creating a path for Indian manufacturers to develop the components that can be fitted into these vehicles and ensure the safety as well as enhanced experience of the users.
   
• Japan automotive electronics market was valued at USD 22.1 billion in 2024. Japan is bringing its expertise from auto manufacturers, electrical component manufacturers and semiconductor companies to develop automotive systems in the automobiles using chiplets technology. The country is competing in the automotive electronics industry with the focus on developing solutions that are sustainable and environmentally friendly.
   
• South Korea automotive electronics is growing and is estimated to reach a value of USD 18.9 billion by 2034. The country is progressing in the market through partnership and collaboration. For instance, in April 2024, Sterling Tools Limited signed a MoU with South Korea’s Yongin Electronics Co, Ltd. for EV component production facility. The country is providing expertise to the India’s EV sector.
   
• Australia held a market size of USD 1.6 billion in 2024. The country is focusing on advanced connected vehicles safety and is providing its technology to help other countries. For instance, in January 2024, Danlaw, Inc. acquired Australia based Cohda Wireless. Cohda will deliver its V2X technology solution and help with the safety of the vehicles.
   

The automotive electronics market in North America region is expected to experience significant and promising growth with a CAGR of 8.7% from 2025 to 2034. North America region embraces the rising shift of the automotive market, and the region is providing support to develop the electric vehicles which helps the market to gain traction within the region.
 

• The U.S. industry held a market size of USD 78.2 billion in 2024. The growing percentage of electric vehicles in U.S. reflects that the country is making efforts to shift towards electric mobility solution. For instance, according to IEA, the number of electric car registrations was 1.4 million in 2023, which increased by over 40% when compared to 2022. The adoption of new technology is one of the key trends for the market to grow.
   
• Canada is expected to grow in automotive electronics industry at a CAGR of 5.7% in the forecast period. Canda as a country is embracing the shift of the market towards electrical components that are used in vehicles. Canada has recently introduced zero- emission connected and autonomous vehicle in their Project Arrow designed in Ontario.
   

Europe automotive electronics market is anticipated to witness lucrative growth between 2025 – 2034 and is expected to reach a market value of USD 113.1 billion by 2034. Europe has strict regulation for the automobile sector which makes the region more favourable for the market to progress as the market has prime focus towards reduction of emission rates and develop the EV ecosystem.
 

• UK automotive electronics industry was valued at USD 8.9 billion in 2024. The UK country is increasing its investment in EV industry as it invested around USD 2.5 billion in the auto industry and EV ecosystem. The strict emission regulations in the country are a reason for such investments and thus the electronics components manufacturers find opportunities in this country to excel.
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• Germany automotive electronics market is expected to reach a value of USD 45.4 billion by 2034. The country is forming joint venture in the electric car technology development which provides a Germany a way to progress in automotive electronics. For instance, in November 2024, German car manufacturer Volkswagen launched joint venture with U.S. electrical vehicle manufacturer Rivian. This provides a base for the organization dealing in electronics to develop in the country by providing components and systems for EVs.
   
• France market was valued at USD 7.2 billion in 2024. The country is set to develop and aid the rising need of consumers for connected cars with the focus on reducing emissions as well. This provides a way for the automotive manufacturers to penetrate in this country with new technological innovation in the automotive system.
   
• Italy automotive electronics is projected to grow at a CAGR of 5.8% in the forecast period. The shift towards systems that have high safety features such ADAS is a reason for the country to adopt new technology in the cars.
   
• Spain automotive electronics had a market size of USD 5.2 billion in 2024. The country is moving forwards with the goal to reduce emission. This provides wide opportunities for manufacturers in the country to develop electronic components that are used in the automotive market.
   

The Latin America automotive electronics market is expected to grow at a CAGR of 4.6% for the forecast period. This region has been shifting towards e-mobility solution as according to IEA, electric car sales reached to 90,000 units in 2023 in Latin America region. The countries within this region are developing solution that will help the market to grow.
 

• Brazil automotive electronics held a market size of USD 4.2 billion in 2024. In 2023, Brazil the electric car registration tripled as compared to its previous year. This reflects the rising consumer demand for electric cars which depicts the increasing need for electric systems for cars.
   
• Mexico automotive electronics market is anticipated to grow at a CAGR of 4.5% for the forecast period. Mexico automotive market is well integrated with North American partners which helps in leveraging the new technology. This shows that the country is developing automotive electronics through partnership and collaboration.
   
• Argentina market is expected to reach a market value of USD 1.1 billion by 2034. Argentina is embracing the EV components manufacturers and focus on advanced vehicle safety and comfort system is leading to the growth of automotive components market.
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The MEA automotive electronics market is expected to grow at a CAGR of 6%. The region has the growing popularity of automotive solution which provides a path for the automotive sector to increase their presence within the region by bringing solutions that are safer, environment friendly and provide an enhanced experience to the users in the MEA region.
 

• Saudi Arabia automotive electronics market is projected to grow at a CAGR of 7% in the forecast period. The vison 2030 of this country solemnly focuses on sustainable transportation and clean energy. With the transformation of automotive market in Saudi Arabia the country has launched recently EVs and manufacturing plant which shows that the country is developing its car models for electric solutions. The country aims to develop e-mobility solutions, connectivity and autonomous system. Thus, providing an opportunity for the automotive electronic market to grow in this country.
   
• South Africa automotive electronics held a market size of USD 1.2 billion in 2024. The country has launched recently EVs, which shows that the country is developing its existing car models for electric solutions.
   
• UAE automotive electronics is expected to grow and reach a market value of 3.4 billion by 2034. The country is focusing on sustainable transportation which provides opportunities for the automotive market to help achieve the net zero emissions goal by 2050.